The bottled water market has increased from 2011 - 2012 in volume. Players in the market feel that the rise in bottled water has to do with consumers believing that bottled water is healthier than tap water. Category value growth was driven jointly by the price per litre increase as well as by the volume growth. The prices increased due to natural inflationary pressures.
In terms of packaging demand, glass usage declined during 2012, while PET demand strengthened. There has been a shift from glass into PET making this pack type dominant in the bottled water industry. Functional breakdown flavour increased in volume and in share, which shows that there has been a shift from sparkling and still product flavours as those have decreased in volume and share.
Still unflavoured water continues to dominate and the functional breakdown flavour is developing and maturing as players believe that functional waters have been enhanced with specific ingredients which deliver health and wellbeing benefits.
Category definitions
- Bottled Water/Drinking Water - water that meets all the applicable government standards sealed in a sanitary container and sold for human consumption. Bottled water cannot contain sweeteners or chemical additives (other than flavours, extracts or essences) and must be calorie and sugar free. Flavours derived from spices or fruits can be added to bottled water, but these additions must comprise <1% by weight of the final product. Beverages containing >1% by weight flavour limit are classified as soft drinks. Bottled water may be sodium free or contain very low amounts of sodium, and can contain natural or added carbonation.
- Bottled Water/Spring Water - this has become the generic term used in relation to all bottled waters. However, true bottled waters are obtained from a natural or drilled spring. The mineral salt content gives it specific properties that may be beneficial to health, containing not less than 250 parts per million total dissolved solids. These waters can have a salty, soapy or earthy taste depending on their mineral content. They are distinguished from other types of bottled water by its constant level and relative proportions of mineral and trace elements at the point of emergence from source. No minerals can be added to this product.
- Natural Water - this is regarded as spring, mineral artesian or well water and is derived from an underground formation and not from a municipal system or public water supply.
Distribution
Top-end retail channel continues to dominate in distribution. Bottom-end retail, garage forecourts, wholesale and on-consumption channel do show growth in distribution. Players believe that the consumption of bottled water continues to increase at home and away from home.
Channel distribution
All regions experienced growth in volume distribution, except for Western Cape, with a slight decline. Players believe that there is an increasing demand of bottled water. Northern Cape is growing in share and Free State increased in volume and in share. Limpopo region increased in volume and in share while the North West region decreased in volume but gained share.
Regional distribution
Bottled water industry is encountering new opportunities and challenges with health threat due to lack of recycling tap water regulations and increasing water filtration systems becoming more popular.
BMi Research specialises in consumer and industrial research in various sectors, including the retail market, www.bmi.co.za.
