Bottled Water Market Characteristics
The bottled water industry includes establishments involved in purifying and bottling water. Companies in the bottled water industry are primarily involved in purifying water, packaging, marketing and distributing it in the form of bottled or canned water. The bottled water products are further sold to either distributors or end user outlets. Distributors in the bottled water industry further charge commission on the products depending on several factors such as availability, pricing and relationship between the two entities. The end users of bottled water products include institutions and retail customers. Institutional customers cover establishments such as restaurants, offices and hotels. They purchase bottled water from wholesalers or distributors.
Bottled Water Market Competitive Landscape
The bottled water industry is very fragmented with only a few players dominating the entire market. Major companies in the bottled water industry include Nestle Waters, Danone, Hangzhou Wahaha Group Co., Ltd., The Coca-Cola Company and PepsiCo. The competitive landscape of the global bottled water market is highly fragmented with a lot of small and medium players that distribute bottled water only in their countries/regions. The four biggest companies in the market, i.e. Nestle Waters, Danone, Hangzhou Wahaha Group Co. Ltd. and the Coca Cola Company, hardly hold 10% of the market. Three of the four largest players, i.e. Nestle Waters, Danone and The Coca Cola Company, have a global presence with franchises on every world continent.
Bottled Water Market Size
The bottled water market is expected to reach $350 billion by 2021, growing at a double digit CAGR. The growth is mainly due to lack of well-developed public water infrastructure, increasing awareness on purity and safety of bottled water and contamination of drinking water as the middle-class population, which demands better living standards, is rapidly growing in countries such as China, India and Indonesia; this will also affect the growth of the bottled water market in these countries; growing demand for functional water, bottled water consumers are increasingly adopting new products with health benefits. Functional water has added functional value in the form of minerals, oxygen and vitamins. Since consumers prefer to try new tastes and follow the best of them, the availability of a range of flavors and options in functional water will boost the market growth.
However, the growth in the bottled water market is restrained by several factors which include government body regulations restricting the production of bottled water, growing concerns over improper disposal of bottled water, increasing energy consumption and high costs of bottled water when compared with tap water.
Campaigns and Restrictions against Improper Disposal of Plastic Bottles is one of the restraints faced by the bottled water market. The period 2011-2016 saw trashcans and streets all around the world overflowing with plastic water bottles, resulting in a major environmental concern. People started spreading awareness on social media pages and groups voicing their concern and organized campaigns against improper disposal of plastic water bottles. This not only led to negative publicity for the global bottled water industry but also encouraged governments to formulate several strict regulations regarding the use of recyclable packaging solutions. For instance, the impact of improper disposal of plastic bottles led San Francisco to ban plastic water bottles.
Bottled water is sometimes described as just an expensive form of tap water. It is stated that 50% all bottled water is reprocessed tap water, sold at extremely high prices. According to the New York Times, if a person drinks the required daily amount of water using bottled water, it will cost an average of $1,400 per year while drinking the same amount from the tap costs around 49 cents for the year. Thus high cost of bottled water in comparison with tap water also restraints the market.
Bottled Water Market Segmentation
The bottled water market is further segmented by product, by packaging, by pack size, by origin of product, by its premium nature, and by geography.
By Product -The bottled water industry is segmented into packaged drinking water – still, spring + mineral – still, flavored water – still, functional water, spring + mineral – sparkling, flavored water – sparkling and packaged drinking water - sparkling. The packaging drinking water – still segment is estimated to have the highest share in the market.
By product type, packaged drinking water - still was the largest segment in the global bottled water market.
By Packaging - The bottled water industry is segmented into plastic, drum, glass, can and others. Among the segments, plastic bottle is the leading the bottled water market segment.
By packaging , plastic bottle was the largest segment in the global bottled water market.
By Pack Size - The bottled water industry is segmented into 1501 ml and above, 501 ml - 1000 ml, 331 ml - 500ml, 1001 ml - 1500 ml and =330 ml. The 150 ml and above bottled water is expected to be leading the market.
By pack size, 1501 ml and above was the largest segment in the global bottled water market
By Origin Of The Product The bottled water industry is segmented into domestic and imported bottled water. Domestic bottled water is estimated to have the highest share in the segment.
By Premiumness - The bottled water industry is segmented into premium nature and non-premium bottled water. Non-premium bottled water is estimated to be leading the market.
By Geography - The bottled water industry is segmented into Asia Pacific, Americas, Europe, and Middle East and Africa. Asia Pacific accounts for the largest region in the global bottled water market.
The bottled water market in Asia-Pacific was the largest in the world by volume, accounting for more than 43% of the global bottled water market in 2018. Increasing hygiene standards along with poor public water infrastructure in various Asia Pacific countries is a key factor fueling the growth of the bottled water industry. The bottled water market in Americas was the second largest in the world by volume, accounting for almost 31% of the global bottled water market.
Bottled Water Market Trends
Major trends witnessed in the bottled water industry include consumers shifting from soda to water, growing acceptance of premium bottled water and increasing digital marketing strategies initiated by bottled water manufacturing companies to retain and acquire new consumers.
Potential Opportunities In The Bottled Water Market
With growing investments by bottled water companies in emerging economies, increasing awareness in rural areas and developed distribution network established by the companies, the scope for the bottled water industry is expected to increase significantly in the forecast period.