As part of two new reports, the analyst says that bottled water consumption was up by six per cent in 2007 from the previous year to 206bn litres, while consumers drank 13 per cent more milk drinks in 2007, amounting to 242bn litres.
If both markets continue to grow under these conditions, by 2012, volumes for bottled water and milk drinks are forecast to rise by 19 per cent and 32 per cent respectively, according to the analyst.
Zenith said that while both markets are expected to continue their upward momentum over the next five years, poor seasonal weather and environmental concerns over bottling, and fears over milk supply have created uncertainty for both segments respectively.
Despite these fears, the analyst said that Asian and Australian markets were a key factor in the overall growth of bottled water products during the year, holding a 26.5 per cent share of the total global market for the product between them. Zenith said that this amounted to a ten percentage point rise on the previous year, helping to offset a 0.2 per cent dip in bottled water volumes within Western Europe.
The analysts said that demand was up in all other international markets though, with Africa and Eastern Europe increasing their own market shares by 14 and 10 percentage points respectively.
However, the report conceded that the two markets currently hold the smallest market shares for the water consumption.
China and the US were the largest overall markets for bottled waters, with Indonesia, Mexico and Italy making up the rest of the top five, the report stated.
Per person consumption of the product during 2007 was found to be up by 1.4 litres to 30.8 litres over the same period the previous year, Zenith said.
Weather and eco-concerns
Gary Roethenbaugh, market intelligence director for the analyst stated that despite the growth, the year wasn’t without its difficulties for bottled water makers.
"Media debate about the environmental impact of bottled water will have had some impact in the United States and West Europe, but last year’s wet summer was of greater consequence in West Europe," he stated. "The resilience of the global bottled water market shows that consumers continue to believe in the benefits of its purity and convenience."
Of the biggest players in bottled water, Nestle, Danone, Coca-Cola and PepsiCo continued to dominate markets globally, accounting for 33 per cent of total sales volumes over the year, the report stated.
In terms of the top five water brands, Aqua from Danone, Pure Life from Nestle, PepsiCo’s Aquafina and Electropura and Poland Spring also from Nestle, made up the list, Zenith said.
In actual product categories, Zenith said that still water represented 86 per cent of all packaged sales of the product, with bulk-sizes above 10 litres holding a 36 per cent share of the market.
As with bottled water, Asia was again a major driver for milk-based drinks in 2007, according to Zenith’s dairy market intelligence director Esther Renfrew.
“Asia has seen the most consistent growth, mainly due to booming demand in China,” Renfrew stated. “Consumption in Asia/Australasia has increased from 18.3 litres per person in 2002 to 22.9 litres in 2007.”
While milk consumption was found to have increased worldwide over the period, the analyst said this has occurred at a much slower rate in developed markets.
Flavoured milk in particular held a 4.7 per cent share of global milk drink volumes over the period, with an 8.5 per cent share of the middle east market alone.
Zenith said that over the last five years, flavoured milk sales volumes were up by two per cent in Western Europe and over ten per cent in Latin America.
The analyst added that its findings showed that 2007 presented a number of challenges to milk drink makers.
Zenith said that supply and demand instability hitting the overall price of milk, and free trade impediments like subsidised production and quotas ensuring only seven per cent of milk production is traded internationally, were major issues for manufacturers over the period.
For these difficulties and their impact on milk prices, the analyst said that industry consolidation had ensured there was an emerging number of strong international leaders in the milk drink segment.
Zenith said that the impact of these companies was already apparent.
“In order to meet growing competition from other drinks, particularly in developed countries, producers have increasingly focused on adding functionality - in one year, over 2,300 new functional dairy drinks were launched,” the group stated. “Although functional milk drinks are still a niche segment, volumes are growing fast.”
In terms of flavoured milk production, the US leads global demand with 1.6bn litres consumed in 2007, according to Zenith.