Bottled water brands face point-of-use pressure
manufacturers are coming increasingly under pressure from
point-of-use (POU) water suppliers amidst recent environmental
criticism of the industry, according to a new report.
Over the past five years, the market for POU systems, used to purify and chill mains-fed or plumbed-in tap water, has grown five-fold to €210m by the end of 2007, says beverage industry analyst Zenith International in its latest report on the market. Industry criticism Concerns over the perceived environmental impacts of transporting and bottling mineral water have led to increasing attacks from environmental organisations and some politicians over the last year, with some restaurants in the US serving only tap water as a result. While the industry has moved to attack such claims as exaggerated and misplaced, the latest figures are likely to add to industry concerns over the criticisms. Cost concerns Although perceived cost benefits in particular has been a key driver of the growth in recent years, a spokesperson for Zenith told BeverageDaily.com that the environment had become an increasingly important area for drinking water suppliers to tackle in recent years. "Bottled water groups and POU suppliers have been directly competing even without the recent environmental pressures," she stated. "However, both industries are now really working to leverage the potential comparative green benefits." Although POU water is unlikely to overtake the dominant bottled water market in the next few years, the spokesperson claims that the emergence of the systems has damaged the growth prospects for packaged mineral water. Sales growth Gary Roethenbaugh, market intelligence director for Zenith, said that POU suppliers were seemingly reaping the rewards of playing up the perceived cost, environment and convenience benefits of their product. Roethenbaugh added that improved customer awareness of the product and equipment innovation had all helped to push growth. "[About] 29 per cent all mains-fed coolers in Europe now dispense sparkling water as well," he stated. "Trust in the national water supply is vital, but also a desire to improve it. According to the Zenith spokesperson, some manufacturers were ensuring that they now offer both bottled and POU water products to their customers to ensure that they are not favouring one concept over the other. In terms of adopting both products, Zenith said that it was much easier in general for bottled water producers to offer POU water that the other way around, due to the overheads of entering into bottled water production. Market trends Despite the potential of POU, Roethenbaugh says that market is currently dominated by two markets in Italy and the UK, which hold a 56 per cent share of the segment in the bloc, despite different cultures of how they are used. "Offices dominate the UK industry, driven by interest in health and hydration," he stated. "Italian preference for sparkling water and a culture of leaving the workplace for refreshment have led to more emphasis on provision in bars, restaurants and homes."
