Packaged water set to overtake carbonates consumption in 2 years – Canadean
Over the past few decades the demand for packaged water has rocketed exponentially. Just 10 years ago world consumption stood at 100 billion litres, reports Canadean. Since then - and despite the global downturn - volumes have actually doubled.
Print2 May 2013
Perhaps even more surprising is that, according to Canadean’s latest calculations, packaged water will actually overtake carbonates as the leading soft drinks category in just two years. This anticipated result is being bolstered by its healthy image, plus actual necessity in those areas of the world lacking alternative, safe, water supplies.
The main thrust behind this category re-positioning comes from Asia where Canadean predicts that volumes will rise by around 16% this year alone; that’s more than twice the global rate of increase. The region already absorbs one in every three litres of packaged water consumed around the world but per capita intake remains well below the international average, especially in under-developed markets like Pakistan, the Philippines and Vietnam where it’s still less than 10 litres per capita. This underlines the huge market potential still to be realised in this part of the world.
Asian growth has a strong dependency on China where major suppliers like the Blue Sword Group, China Resources Enterprises, Coca-Cola and Zhejiang Nongfushanquan Water Co are helping to drive expansion. But, as well as the Chinese market being huge, it also remains fragmented. Despite a combined volume in the order of seven billion litres, these four players are responsible for less than a third of category sales in China. Yet, whilst China represents the cornerstone of Asian packaged water consumption, Canadean reveals that India is seeing the more dynamic advances at well over 20% a year.
The North American packaged water market is also huge with sales now in excess of 30 billion liters but the pace of development is far less vibrant than in Asia.
Volumes suffered here during the recessionary years and took time to recover but the rate of annual growth is now re-accelerating. Recent progress has been partly driven by packaged water’s improved value offering, with consumers switching from other beverages where prices have risen more steeply. At the same time, the category has benefited from its intrinsic low calorie proposition relative to alternative mainstream soft drinks.
However, conditions remain very challenging as a combination of relatively low growth and wafer-thin profit margins make it hard for suppliers to commit to long-term investment in brand support but this is not seen to deter future volume expansion.
Canadean sees a positive future across all regions, even in Western Europe where demand was struggling to increase even before the start of the economic crisis. Progress is currently being held back by such negative factors as approaching category maturity in Germany. Added to this is the threat posed by competing water filters and local authority initiatives promoting tap water in Italy. Nevertheless, market positivity is slowly returning with almost 900 million litres predicted to join the regional pool by 2018. The packaged water category can look forward to a very bright future indeed, states Canadean.
For further information phone: +44(0)20 7936 6830
According to Canadean’s latest calculations, packaged water will actually overtake carbonates as the leading soft drinks category in just two years.
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