China’s bottled water market growth slows but other emerging markets pick up the slack: Mintel

By Mary Ellen Shoup contact

- Last updated on GMT

Bottled water is one of the strongest performing sectors of the global non-alcoholic drinks market, with retail sales volume climbing by 6.5% between 2016 and 2017 to reach 203 billion liters.  ©GettyImages/scanrai
Bottled water is one of the strongest performing sectors of the global non-alcoholic drinks market, with retail sales volume climbing by 6.5% between 2016 and 2017 to reach 203 billion liters. ©GettyImages/scanrai
Despite being one of the largest bottled water markets globally with an overall consumer trend towards premiumization, the growth of bottled water’s retail sales have slowed and are projected to continue to decline due to market saturation, Mintel finds.

“Due to trends in premiumization, China’s bottled water industry has seen rapid growth over the past decade,”​ Loris Li, associate director, Food and Drink, at Mintel, said.

Chinese consumers have quadrupled their per capita water consumption from five liters in 2007 to 20 liters in 2017, according to Mintel. However, this is relatively low compared to other countries such as Mexico and the US where per capita consumption in 2017 was 222 liters and 120 liters, respectively.

“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​,” Li said.

Bottled water sales volumes in China were predicted to reach 27 billion liters in 2017, up from 25 billion liters in 2015, but growth rates dipped from 5% in 2015 to 4.2% in 2017.

“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 premiumization remains key for value market growth,”​ Li said.

Consumers between the ages of 20 and 49 have shown the most interest in trying new water products, with half of them drinking unflavored sparkling water, an increase from 29% in 2015. The amount of consumers in this age group drinking flavored sparkling water doubled in one year to 60% in 2016.

Emerging bottled water markets

The US is currently the largest bottled water market with volumes of 39 billion liters in 2017, followed by Mexico (28.7 billion liters), China (27 billion liters), Indonesia (16 billion liters), and Germany (12 billion liters).

However, emerging markets such as India, with a growth rate of 19% between 2016 and 2017, are outpacing the growth of these developed world markets, according to Mintel.

“Recognizing that India’s population is among the largest in the world, it remains a sleeping giant in the global market,”​ Alex Beckett, associate director, food and drink, at Mintel, said.

“This growth is being driven by rising incomes, consumer concerns over hygiene, and convenience needs, particularly when out of home. India has a fragmented and comparatively unregulated bottled water market, but big, global companies appear to be keen to expand their presence in the country.”

Also among the top five fastest growing bottled water markets are Indonesia (13.2%), Vietnam (11%), the Philippines (10.6%), and South Korea (9.9%), according to Mintel.

“The growth that the global water market is experiencing reflects consumers’ preference for less sugary drinks, lively levels of innovation, and uncertainty about the safety of domestic water supplies. Growth is also benefiting from an increased willingness among consumers in certain markets to pay for premium bottled water,” ​Beckett said.

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