THE trend of drinking bottled water in Europe and the US has been steadily increasing since the 1980s. However, executive director at the Australasian Bottled Water Institute, Tony Gentile, told Food Magazine that it took the Sydney water crisis in 1998 for the category to jump ahead in Australia.
“Of course the phenomenal growth experience of 30% in the year of the crisis was unsustainable, but since then growth has consistently been in the double digits,” he said.
Gentile expects this growth to continue in the next few years. He said the current success of the category would be further developed by brand extensions in “near waters such as low carb, lightly flavoured and vitamin-ised waters”.
Carbonates are still by far the category leader in non-alcoholic beverages, holding 65.6% of the total market. However, per capita consumption has been slowly declining in the past couple of years.
Other non-alcoholic beverages have also been experiencing fluctuations, but Gentile said these have not generally been blamed on bottled water, despite its considerable growth. He believes the bottled water category is bringing new consumers to the market place that did not previously consume ready-to-drink non-alcoholic beverages.
New research by beverage industry analyst Canadean says this growth has been in the realm of 65% globally since 1997, and attributes it to an international trend towards healthier living.
Whether it is the soft drink slow-down or consumer interest in water, beverage giant Coca Cola Amatil (CCA) is fighting to cash in on this healthy lifestyle trend, with heavy investment in the bottled water sector.
The company’s recent acquisitions of Peats Ridge and Neverfail, along with the retail success of its own Mount Franklin and Pump brands, have secured its position as the country’s largest water retailer.
CCA Queensland general manager Neale Wood said that in 2003, consumer demand for bottled water increased by 20%.
In that year, Australians gulped 520 million L of water, with Mount Franklin and Pump accounting for 17% of the total bottled water market.
Wood attributes this growth to fashion, trends, health consciousness, convenience and improvements in packaging. “Australians are now following world trends and drinking more water for a number of reasons. We’re now more health conscious than ever before.”
It is still too early to say what kind of effect Coca-Cola’s recent water acquisitions will have on Australia’s many small and medium-sized water bottlers. The CCA brands also have a retail advantage when it comes to distribution.
“A few years ago, you would walk into your local corner store and there was probably no water. Now most retailers will have a fridge dedicated only to water,” Wood said.
While this observation describes the current consumer acceptance of the category, it is also a testament to Coke’s far-reaching distribution network. For example, many retail fridges are dedicated solely to the Mount Franklin and Pump brands.
Gentile also sees positive outcomes from CCA’s recent dominance of the market.
He believes the acquisitions “will bring to the market Coca-Cola’s expertise and investment, thus ensuring continued market growth”.
AusDrinks2004
For more information about AusDrinks2004, contact Melanie Eardley at the ASDA on (02) 9662 2844 or e-mail: eardley@softdrink.org.au