China’s bottled water sales decline as market reaches saturation point

ASIA – China’s bottle water growth is hindered by market saturation while retail volume sales continue to decline, according to the London-based market research firm, Mintel.

According to the research, China’s bottled water sales volume growth fell from 5% in 2015 to 4.2% in 2017, and is predicted to fall further to 2.8% by 2021.

This is despite the fact that China’s bottled water market was expected to expand at an annual rate of 7.42% and lead the global market with 57,903.90 million litres expected to be consumed in 2021 alone, report Global Data.

On the other hand, China remains one of the biggest bottled water markets globally due to an ever increasing thirst for quality water and health-conscious drinking habits.

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In terms of volume, China is said to lead the global bottled market ahead of US, India, Indonesia and Germany.

A surge in the consumption rate was attributed to preference for bottled water over water barrels or tap water especially in the urban areas even as quality of life keeps on improving every day.

Mintel research shows that half (50%) of Chinese consumers aged 20-49 drank unflavoured sparkling water in 2016, up from 29% in 2015 while 60% drank flavoured sparkling water in 2016.

“Due to trends in premiumisation, China’s bottled water industry has seen rapid growth over the past decade.

However, it was only a matter of time before market saturation started inhibiting growth potential for bottled water brands, especially amidst intensified competition in the wider beverage market.

With more Chinese consumers drinking bottled water, brands are under pressure to differentiate themselves from rivals.

Despite a saturated market, innovation opportunities still exist, and premiumisation remains key for value market growth,” said Loris Li, Associate Director, Food and Drink, at Mintel.

Bottled water tops the list on global non-alcohol drinks market with retail sales volume in key global markets climbing by 6.5% between 2016 and 2017 to reach an estimated 203 billion litres.

The largest bottled water market is US, with volumes forecast to reach 39 billion litres in 2017 followed by Mexico, China, Indonesia and Germany, closing the top five list at 12 billion litres.

The US water bottling industry is dominated by Nestle Waters, CG Roxane, LLC., Suntory Beverage & Food Ltd., Groupe Danone, Mountain Valley Spring Company, LLC., The Coca-Cola Company, and PepsiCo, Inc., says Persistence Market Research (PMR).

With the US bottled water market predicted to reach a valuation of US$6 billion by 2024, manufacturers are focusing on launching advanced water products, healthy and environmentally friendly.

Vietnam, Philippines, South Korea and India are categorized as the fastest growing bottled water markets with India’s bottled water sector outpacing growth of any of the other major global markets between 2016 and 2017, recording an impressive 19% growth.

Bottled water is gaining popularity around the globe as concerns about sugar in beverages and carbonated soft drinks increase.

According to Mintel research, 25% Americans claim to be drinking more water to reduce sugar intake, switching to bottled water from carbonated soft drinks (CSDs)

Also, there was an increase in the number and share of flavoured water launches bearing a low/no/reduced (L/N/R) sugar claim in 2017.

Consumers continue to embrace bottled water due to naturally healthy attributes over CSDs that likely contain high levels of natural and/or artificial sweeteners.

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