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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