Bottled water demand growth slips in Western Europe

By Neil Merrett

- Last updated on GMT

Related tags: Bottled water, Europe, Eastern europe, Western europe

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 inWest 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.

Related topics: Markets, Soft Drinks & Water

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