Growth in bottled water sales in Western
Europe has slowed down to 2.5 per cent annually, compared to the 8 per
cent increase in demand globally, according to new
findings.
With global sales
volumes of bottled
water expected to reach 150bn litres by the end of 2007, strong growth in
emerging markets for the product are becoming increasingly important for the
industry, says beverage research group Canadean.
The
findings highlight growing opportunities for bottle water manufacturers in
emerging markets like Eastern Europe, whilst also revealing some of the
challenges facing a number of brands in Western Europe.
The Western
European region is home to seven of the top ten largest per capita consumer
markets for bottled water.
According to the research, the bottled water
industry should be concerned therefore that the compound annual growth rate
(CAGR) for consumption in Western Europe will fall to 2.5 per cent between 2008
and 2010.
The region experienced a 3.5 per cent CAGR in the six
years to 2007.
As a result, the region's share of the global bottled
water market is expected to fall from about a third now to 29 per cent.
The decline is attributed primarily to a fall in growth in the four
key markets of France, Germany, Italy and Spain, which account for eight in
every ten litres of bottled sold in Western Europe, Canadean said.
In
Germany alone, currently the second biggest global market according to the
research, CAGR is expected to fall to 3.3 per cent, from 5.5 per cent between
2001 to 2007.
Similarly, over the same period the CAGR in the Spanish
market is expected to fall to 4.5 per cent to six per cent, and in Italy to 1.9
per cent to 2.5 per cent.
There were also problems in France for bottled
water consumption according the Canadean, with domestic demand failing to match
the peak consumption during the humid 2003 period.
"The rest of the
world may be drinking more French water, but the French are not," the
analyst stated.
Campaigns by local water utility campaigns between 2005
and 2006 were attributed to the decline.
There were further difficulties
outside of the region's key bottled water markets though.
In the Swedish
market, concerns over the environmental
impacts of packaged water proved to be detrimental to sales during 2007.
In Denmark, legislation is being put in place that will require deposits to be
put on plastic still water bottles during 2008.
The findings suggest that
should this focus spread through Western Europe, then bottled watered sales
could be hampered further.
Of the total regional market, only in the
Netherlands and Austria are sales expected to increase, the report
added.
Despite these difficulties, Canadean said it remained optimistic
for the overall future of the bottled water market in Western
Europe.
"It is easy to be cautious and the pace of growth may
decelerate, but long-term growth still looks to be assured and the opportunities
remain good in West Europe," the analyst stated.
The report pointed to relatively undeveloped markets for the product
like Finland to ensure strong demand in the future.
This confidence for
bottled water was reflected in the overall global market for the product, where
Eastern Europe was found to be a rising star, posting double-digit rises in
demand.
Though the region currently consumes in general 16 litres a year
each - ten less than Western Europe - the gap is expected to close in the coming
years, the report added.
The CAGR for Eastern Europe is expected to
reach eight per cent between 2008 and 2010, aided by the integration of new
member states into the European Union leading to further market development. Source: PackWire
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The Water Connoisseur
