Bottled water brands face point-of-use pressure

Tag : Mineral Water Equipment
Over the past five years, the market for POU systems , used to purify and chill mains-fed or plumbed-in tap water, hasgrown five-fold to €210m by the end of 2007, says beverageindustry analyst Zenith International in its latest report on themarket.

Industry criticism

Concerns over the perceived environmental impacts of transportingand bottling mineral water have led to increasing attacks fromenvironmental organisations and some politicians over the lastyear, with some restaurants in the US serving only tap water as aresult.

While the industry has moved to attack such claims as exaggeratedand misplaced, the latest figures are likely to add to industryconcerns over the criticisms.

Cost concerns

Although perceived cost benefits in particular has been a keydriver of the growth in recent years, a spokesperson for Zenithtold BeverageDaily.com that the environment had become an increasingly important area for drinking watersuppliers to tackle in recent years.

"Bottled water groups and POU suppliers have been directlycompeting even without the recent environmental pressures," she stated. "However, both industries are now really working to leverage thepotential comparative green benefits."

Although POU water is unlikely to overtake the dominant bottled water market in the next few years, the spokesperson claims that theemergence of the systems has damaged the growth prospects forpackaged mineral water.

Sales growth

Gary Roethenbaugh, market intelligence director for Zenith, saidthat POU suppliers were seemingly reaping the rewards of playing upthe perceived cost, environment and convenience benefits of theirproduct.

Roethenbaugh added that improved customer awareness of the productand 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 toimprove it.

According to the Zenith spokesperson, some manufacturers wereensuring that they now offer both bottled and POU water products totheir customers to ensure that they are not favouring one conceptover the other.

In terms of adopting both products, Zenith said that it was mucheasier in general for bottled water producers to offer POU waterthat the other way around, due to the overheads of entering intobottled water production.

Market trends

Despite the potential of POU, Roethenbaugh says that market iscurrently dominated by two markets in Italy and the UK, which holda 56 per cent share of the segment in the bloc, despite differentcultures 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 theworkplace for refreshment have led to more emphasis on provision inbars, restaurants and homes."