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RESEARCH: Water cooler industry up 16% in 2002

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The UK water cooler industry continues to tread a high growth path, according to drinks consultancy Zenith International. Percentage increases have slowed as the market matures, but encouragingly the number of additional units placed in 2002 was comparable with previous years at 70,000. This represents a rise of 16% to a total of 495,000 machines installed. Consumption rose at a similar rate to reach 390m litres.

The significant development of the past year was the long awaited and long predicted advance of the two global bottled water leaders, Nestlé and Danone. Out of over 150 acquisitions and mergers across Europe since 1998, the last quarter of 2002 and first quarter of 2003 saw the biggest transactions to date. First, Danone entered the UK market with the purchases of Chateaud'eau UK and Nature Springs to challenge leader Powwow and second ranked Nestlé Watercoolers UK. Then in February 2003, Nestlé agreed to buy the entire European Powwow network, subject to regulatory approval.

Coolers continue to contribute substantially to overall UK bottled water market growth, accounting for 31% in 2002. Cooler water volumes have more than trebled during the past five years, surging to 22% of total bottled water consumption. Zenith Research Director Gary Roethenbaugh explained: "A strong service culture and growing consumer awareness of the importance of hydration are the most important factors helping to drive this market. Innovation and strong branding have also been instrumental in reinforcing the benefits in customers' minds."

With the presence of global players such as Nestlé and Danone, the UK cooler market is expected to maintain consistent high growth rates for the coming five years. According to Gary Roethenbaugh, "it remains to be seen how these two bottled water giants will incorporate their newly acquired portfolios and how they will be branded, but the total UK portfolio is forecast to hit 850,000 units by the end of 2007."


Companies: Groupe Danone

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