UK bottled water market holds up despite summer wash out
UK bottled water sales rose 0.5% to 2,080 million litres in 2004, translating into £1,200 million of retail value, according to the 14th annual UK Bottled Water report from specialist consultancy Zenith International.
This was achieved despite poor summer weather contrasting sharply with the heatwave of 2003. Still water in single serve bottles for on the go consumption provided the main impetus, gaining 4%. Including volume through water coolers, still water claimed an overall 86% share. Natural mineral water remains the preferred water type, adding 45 million litres in 2004 to account for 67% of the total.
“The merits of proper hydration and the benefits of bottled water to health and well being, especially in the context of increasing concerns about obesity, continue to gain recognition amongst consumers," commented Zenith Research Director Gary Roethenbaugh. "Bottled water offers consumers hydration on the move. It has become the most favoured zero calorie beverage for today’s obesity aware times.”
Figures from consumer research company BMRB International's TGI survey have shown a steadily rising acceptance of bottled water by the British public. The percentage of adults aged 15 and above drinking bottled water has jumped from 33% in 1999 to 53% in 2004. Thus over half of the British adult population now embraces a product that 20 years ago was seen purely as a luxury extra.
Yet challenges do remain. 2004 saw the water cooler industry restructure, prioritising profitability over volume. Following the cancellation of unprofitable accounts, water cooler throughput declined 5% to 435 million litres.
The packaged water industry also experienced some upheaval in 2004. Princes Soft Drinks, the third largest UK soft drinks producer, entered the market through the acquisition of Well Well Well’s main retail operations. Number two soft drinks company Britvic Soft Drinks purchased the bottled water portfolio of Benjamin Shaw & Sons. Meanwhile, the major brand development during 2004 was undoubtedly the launch and early withdrawal of Dasani by the top soft drinks manufacturer Coca-Cola.
World market leaders Danone and Nestlé maintained their combined 37% share of UK consumption in 2004. Highland Spring, Campsie Spring and new entrant Princes Soft Drinks are the next three largest players. The top five groups account for 64% of total volume. “The UK bottled water category has an array of smaller players,” Gary Roethenbaugh added. "But these are expected to come under increased pressure as competition intensifies. Continuing price deflation and a further squeeze on shelf space are expected in 2005.”
Heightened competition should stimulate greater volume growth in 2005 and beyond. At 35 litres per person, UK consumption remains well behind the West European average of more than 100 litres. While the weather will always be unpredictable, bottled water clearly taps into the trend towards healthier lifestyles. Over the next five years, Zenith forecasts a resurgence in UK sales – rising at an annual rate of 8% to 10% to well over 3,000 million litres by 2009.
The 2005 Zenith Report on UK Bottled Water contains 107 pages with a full market commentary, 26 detailed tables and 25 company profiles. Call Zenith International on +44 (0)1225 327900 or e-mail info@zenithinternational.com.
For further information, please contact:
Gary Roethenbaugh or Paul Tarling, Zenith International Ltd
7 Kingsmead Square w Bath BA1 2AB w United Kingdom
t +44 (0)1225 327900 w f +44 (0)1225 327901
zenithinternational.com
This was achieved despite poor summer weather contrasting sharply with the heatwave of 2003. Still water in single serve bottles for on the go consumption provided the main impetus, gaining 4%. Including volume through water coolers, still water claimed an overall 86% share. Natural mineral water remains the preferred water type, adding 45 million litres in 2004 to account for 67% of the total.
“The merits of proper hydration and the benefits of bottled water to health and well being, especially in the context of increasing concerns about obesity, continue to gain recognition amongst consumers," commented Zenith Research Director Gary Roethenbaugh. "Bottled water offers consumers hydration on the move. It has become the most favoured zero calorie beverage for today’s obesity aware times.”
Figures from consumer research company BMRB International's TGI survey have shown a steadily rising acceptance of bottled water by the British public. The percentage of adults aged 15 and above drinking bottled water has jumped from 33% in 1999 to 53% in 2004. Thus over half of the British adult population now embraces a product that 20 years ago was seen purely as a luxury extra.
Yet challenges do remain. 2004 saw the water cooler industry restructure, prioritising profitability over volume. Following the cancellation of unprofitable accounts, water cooler throughput declined 5% to 435 million litres.
The packaged water industry also experienced some upheaval in 2004. Princes Soft Drinks, the third largest UK soft drinks producer, entered the market through the acquisition of Well Well Well’s main retail operations. Number two soft drinks company Britvic Soft Drinks purchased the bottled water portfolio of Benjamin Shaw & Sons. Meanwhile, the major brand development during 2004 was undoubtedly the launch and early withdrawal of Dasani by the top soft drinks manufacturer Coca-Cola.
World market leaders Danone and Nestlé maintained their combined 37% share of UK consumption in 2004. Highland Spring, Campsie Spring and new entrant Princes Soft Drinks are the next three largest players. The top five groups account for 64% of total volume. “The UK bottled water category has an array of smaller players,” Gary Roethenbaugh added. "But these are expected to come under increased pressure as competition intensifies. Continuing price deflation and a further squeeze on shelf space are expected in 2005.”
Heightened competition should stimulate greater volume growth in 2005 and beyond. At 35 litres per person, UK consumption remains well behind the West European average of more than 100 litres. While the weather will always be unpredictable, bottled water clearly taps into the trend towards healthier lifestyles. Over the next five years, Zenith forecasts a resurgence in UK sales – rising at an annual rate of 8% to 10% to well over 3,000 million litres by 2009.
The 2005 Zenith Report on UK Bottled Water contains 107 pages with a full market commentary, 26 detailed tables and 25 company profiles. Call Zenith International on +44 (0)1225 327900 or e-mail info@zenithinternational.com.
For further information, please contact:
Gary Roethenbaugh or Paul Tarling, Zenith International Ltd
7 Kingsmead Square w Bath BA1 2AB w United Kingdom
t +44 (0)1225 327900 w f +44 (0)1225 327901
zenithinternational.com