Korean Bottled Water Sales Sparkle

Drinking water may seem all the same -- scentless and clear -- but with more than 70 local and global makers jockeying to get their slice of the 400 billion won market, the bottled water industry is anything but dry.

Ever since the local bottled water business was legalized in 1995, sales of the spiraling brands hiked more than 10 percent each year. Now estimated at around 390 billion won, industry experts say the amount could reach 500 billion won by 2010.

Consumers’ demand rose so much that the January-June bottled water sales at the nation’s No. 1 discounter E-mart for the first time exceeded that of carbonated soft drinks (CSDs).

E-mart’s water sales stood at 15.8 billion won in 2005, falling 4.5 billion won short of CSD sales. But after the gap narrowed to 2.2 billion won in 2006, H2o caught up with soft drinks in the first half of this year, outselling them by 7 billion won.

``We’re seeing more and more consumers who want to conveniently purchase safe drinking water, instead of having to boil it at home,’’ said an E-mart food and drinks buyer Nam Seung-rok.

Another reason behind the sales shift is increasing health awareness, by which consumers prefer a healthy bottle of water to a sugar-loaded drink.

The E-Mart data showed that CSD sales dropped 12 percent compared to the same time last year, while water sales rose 21 percent, which demonstrates the changing trend.

And to match consumers’ thirst, the industry is responding with more and more brands and ``taste.’’

Competing at the top of the stack is the market’s No. 1 player Nongshim Cheju Samdasoo with runners-up Lotte Chilsung Beverages, Hite, Dongwon F&B and Pulumuone. However, the competition is expected to heat up more as the Military Mutual Aid Association (MMAA) recently announced its entry into the fluid race next year.

``The water will come from under the clean ground of the demilitarized zone,’’ said MMAA spokesman Song Kyu-myung, adding that its new product, benchmarked off of bottled water giant Evian, will jump into the game as a strong player.

To this, another industry insider said, ``Because there are already so many competitors, adding one more won’t make a big difference.’’

The win will be based on each brand’s uniqueness, source and appeal, said marketing consultant Lee Hyo-taek.

``Korea’s bottled water business is speeding up later than those of other developed countries that already have a much bigger market,’’ he said. ``So the local makers still have a long way to go.’’

The United States’ bottled water market reached new highs where sales posted past $10 billion in 2005, advancing more than 10 percent yearly. The International Bottled Water Association (IBWA) said Americans now drink more bottled water annually than any other beverage other than CSDs, but the gap is narrowing.

``After all, water is water, so strategic branding and competitive pricing is the key to growing the local bottled water market like those of the U.S. and Europe,’’ said Lee.