World market of bottled water

World market of bottled water

Amelia DíazMiquel Salgot

Universitat de Barcelona

Bottling market & companies

Dynamic market where great number of companies are competing

Sector where a big part of the world market is still controlled by local firms

Three main types of companies

Types of bottling companies

Small or big companies created purposely for the commercialization of a specific brand of bottled water

Several of them are centennial and family owned. Nevertheless, most of them grouped or are controlled by big worldwide corporations like Nestlé and Danone

1

Big food and beverage corporations, like Coca-Cola and PepsiCo. For those corporations, water is a key component (raw material) for their products and entered the bottled water market to improve the efficiency of and by using their worldwide distribution network

2

Urban water supply companies (network companies), using their knowledge on water treatment and purification to enter a more profitable business

3

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PEPSICO

COCA-COLA

DANONE

NESTLÉ1

2

3

4The big four

NESTLÉ

63 brandshttp://www.nestle-

waters.com/brands/all-brands

Located in 36 countries

97 bottling factories

Distribution in 130 markets

NESTLÉ

Brands: Internationally

prestigious

Functional brands

Nestlé ‘s trademark waters

Brands portfolio:

3 main types

Natural sources’ waters

Internationally known brands

All brands coming from protected sources in France and Italy

San Pellegrino

Acqua Panna

Vittel

Perrier

NESTLÉ

Contrex

Nestlé

Functional brands

Natural source’s waters located in national territories,

well positioned in the national or regional markets

Nestlé brand waters, all having identical quality but produced in different places to minimize

transport costs

NESTLÉ

Nestlé’s brand waters

Nestlé Pure Life

NESTLÉ

Nestlé Pure Life

Commercialized in 27 countries, in emergent marketsand in North America

2008, just in 10 years, became the worldwide leader brand of bottled water

NESTLÉ

2008: more than 5 billion liters sold in the world2009: 14% increase

NESTLÉ2013: 11,7% market share.

Nestlé sales’ leader inNorth America, Europe

and Latin America

Buying local well known companies

Introduction of their own brand Nestlé water

orMain expansion strategy

Inroducción de su marca deagua Nestlé

NESTLÉSaudí Arabia (2002) Al Manhal, Springs

Nigeria and Algeria (2005)

Turkey (2006) Erikli, Alaçam

Switzerland (2007) Henniez, Cristalp

Mexico (2007): Gerber, Sta. María

Brazil (2009) Sta Bárbara, Petrópolis

China (2009) Da Shan, Waterman, Deep Spring

Introduction of Nestlé water brand

Chile (2007) Cachantun, Manantial, Porvenir

DANONE

Owns 2 of the first 5 worldwide selling

leader brands : Evian and Volvic

Sales: 18 billion liters

81 bottling factories

Market share : 8,5%

Main international brands

Local brands leaders of the market

MAIN LEVERS FOR GROWTH IN 2013

2nd bigger bottled water producer in Europe and important supplier in Asia- Pacific and Latin America

Its 2 bigger factories, both located in France, represent approximately 15% of the total bottling

capacity of the group

DANONE

Its 2 bigger factories for bottling water in large containers, both located in Indonesia, represented

nearly 8% of total production

DANONE

2009: exported to 150 countries

EVIAN

The main exported product of the group isbottled water, mainly under the brands

Evian and Volvic

Leader brand in the UK and second in Japan

DANONE

Leader brand in Germany

First imported brand in Japan

VOLVIC

COCA - COLA

Es la mayor compañía de bebidas sin alcohol y el tercerproductor de agua embotellada en el mundo

2009: 79% of the total volume of units sold worldwide were commercialized

through the associated bottling partners

The main company for non-alcoholic beverages and the third bottled water producer in the world

The beverages are produced, distributed and sold through the local associated

bottling companies, privately owned and administered

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Brands

We believe that water must be respected as well as water is respecting us

Our sources: different places, the same quality water

COCA - COLA

This water comes from the public distribution network and is then purified

DASANI

In 1999 was introduced in the States with the bigger publicity budget in the

bottled water industry

Its first brand

Mexico (2008) El Agua de los Ángeles

Colombia (2009) Brisa

Bolivia (2009) Mineragua

Bolivia (2009) Vital

Japan (2009) I Lohas

COCA - COLA

Apart, has been increasing its water business during

the precedent years through the purchase of companies

in several countries

PepsiCo

In the mid nineties entered the bottling water markets by launching the brand

Aquafina

In 1999, became the fourth bottled water supplierin the USA, with a 5,5% market share

2014: was the fourth ranked bottled still water brand of the United States with about 0.86 billion

U.S. dollars worth of sales

AQUAFINA

PepsiCo

Purified public network water

Its first brand

Rusia Minerale Acqua

Mexico Electropura

United Kingdom V Water

PepsiCo

Apart from Aquafina in the USA, PepsiCo owns other brands in several countries

Global market forecast 2011-2021

Industry future perspectives

In the next five years, as a general tendency, the main four companies will mainly center their efforts in the USA and Europe markets, mature and consolidated, but still heavily fragmented

The immediate future of the industry will be strongly related to the results of the main companies in the world water market

Will be interesting to follow the next steps of PepsiCo and Coca-Cola: in only 10 years, with Aquafina and Dasani brands, started from zero and are now the first and second selling brands in the USA

Next step: both companies will attempt to control/dominate the world market and challenge the present leaders command: Nestlé and Danone

Due to the market contraction in the last years, all the big players in the bottled water market are trying to position themselves in the quickly growing markets in developing countries

Approach to the commercial flows

The WTO (World Trade Organization) estimated that the world water trade is limited to bottled water and just represents 0,02% of the value of worldwide goods

25% of the billion bottles sold every year in the world is sold out of its country of origin

75% is produced and distributed at regional level

More than 90% of Nestlé’s Water volume is sold out in the country where it is produced

Vichy Catalán, from the three main water bottlers in Spain, exported 3% of its production to 29 countries

In the next future, the tendency seems to be an increase to the bottling water flows at the local, regional, national and international levels

The big bottling water corporations did found a market niche in the emergent countries

The strategy for growing is right now the acquisition of local, well positioned companies

To finish...

The comparatively high price and the consideration of the difficulties to recycle the water containers is generating certain rejection from the public

New York and Boston cities launched a campaign pushing the citizens to return to tap water consumption

Several USA and Australia universities banned to sold bottled water in the campus