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September 2016
2016 Premium Water Report A review of market performance and country insight
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Copyright All copyright in this document is reserved. Research Note In undertaking its research for this report, Zenith has utilised its internal data library and global databases, alongside other third party sources and interviews with the industry. Throughout its on-going research, Zenith also depends upon the goodwill and co-operation of operators active in the marketplace, and, as such, seeks to achieve a high level of accuracy. Liability This document contains information and may contain conclusions and recommendations. Every effort has been made to ensure that the information is accurate and that the opinions expressed are sound. However, Zenith International Ltd cannot be made liable for any errors or omissions or for any losses or consequential losses resulting from decisions based on the information. Important notice on distribution This report should not be quoted, referred to or transmitted to another party, in whole or in part, with out the prior written consent of Zenith International Ltd. Should you desire to release a copy of this report to another party for information purposes, we request you and the requesting party to indemnify Zenith International from any liability related2to the reportInternational distribution.Ltd Such Š Zenith 2016readers however will not be considered “users� of this report.
Contents
3
1: Methodology and definitions
4
2: Executive summary
9
3: Introduction
12
4: Global trends and developments
14
5: Country focus: China
27
6: Country focus: Germany
38
7: Country focus: Japan
48
8: Country focus: UAE
58
9: Country focus: USA
68
10: Other potential markets
79
11: Premium sub-segmentation
82
12: Industry challenges
88
13: Outlook
90
14: Brand profiles
92
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1: Methodology and definitions
4
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Methodology & definitions Premium water This report covers premium water within the scope of plain packaged water (in pack formats of up to 10 litres). In order to be able to quantify the premium water segment, Zenith’s analysis of ‘premium’ is based primarily on price and positioning. Within each individual market, Zenith has determined a ‘cut-off’ point whereby brands are classified as premium if their overall average value per litre stands above the pre-determined cut-off point. For international brands, Zenith applies its definition primarily based upon a brands’ global average value per litre. Therefore, a brand classified as premium remains so, throughout all markets where it is present. For example, Evian is considered premium in all markets, despite its more mainstream positioning in France. International brands classified as premium throughout this report include Evian, Perrier, San Pellegrino, Vittel and Volvic. From within its global bottled water database, Zenith has identified a number of key markets where premium is understood to either; a) hold a significant share of the packaged water market, b) be of significant volume in million litre terms, or c) present a growth opportunity with the packaged water market. Other considerations The methodology used in this report is primarily quantification by overall value per litre. However, it is important to note that price is influenced by many factors including channel distribution, pack format (size and type), origin (imports) and water type. In some markets, the prevalence of sparkling water impacts the size of the premium segment. Channel dynamics within the local market also play a factor, as generally packaged water sold through horeca commands a higher value per litre than sales through modern retail outlets.
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Methodology & definitions General definitions Bottled/packaged water: still and sparkling plain water in pack formats up to 10 litres. Excludes bulk water (formats over 10 litre). Trade Channels Modern trade: mainly organised retail, predominantly supermarkets and hypermarkets (Walmart, Carrefour, Metro, Tesco, Sainsbury’s), but also smaller sub-outlets of multiple grocers (for example, Tesco express, Sainsbury’s local). Discounters: Includes both hard and soft discounters. For example, Aldi, Lidl, Penny, Netto, Plus, Denner, Dia. Discount retailers usually have basic merchandising (pallets placed directly on the shop floor and limited shelf displays), a limited product range, and often a limited role of manufacturer brands (although this is now changing to some extent, with more Discounters offering a wider range of manufacturer branded goods). Every day low priced goods is the core model in this channel. Traditional: organised and non-organised retail, generally smaller outlets and traditional (independent) grocers. Includes petrol stations (for example, Shell, BP), and sales through vending machines. Also includes kiosks and street market stalls. Horeca: Out of Home (On-premise/away-from-home): comprises café’s, bars, takeaways, fast food (McDonald’s etc). HoReCa (Hotels, Restaurants, Catering), institutions (for example, hospitals, schools, government institutions, military). vpl: value per litre (consumer prices) pcc: per capita consumption pce: per capita expenditure CAGR: compound annual growth rate
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2: Executive summary
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Executive summary Premium water Commentary Commentary Commentary
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3: Introduction
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Introduction Research note In undertaking its research for this report, Zenith has utilised its internal data library and global databases, alongside other third party sources. Throughout its ongoing research, Zenith also depends upon the goodwill and co-operation of operators active in the marketplace, and, as such, seeks to achieve a high level of accuracy. Report content: This report includes a global view of premium water, plus a focus on five key premium water countries. These are Country, Germany, Japan, UAE and USA. Each has been selected due to Zenith’s belief that each one represents an opportunity for premium water. The nature of the five markets is quite different, thus seeking to present a broad range of the dynamics which may exist within a specific premium water market. Premium water definition: One of the main challenges in compiling this report has been the varying definitions of premium within the industry. This subject is covered in detail in the report, and Zenith’s methodology for quantifying premium water worldwide has been specified. Liability Whilst every effort has been made to ensure that the information presented in this document is accurate and that the opinions expressed are sound, Zenith International Ltd cannot be made liable for any errors or omissions or for any losses or consequential losses resulting from decisions based on its contents.
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4: Global trends and developments
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Global packaged water Market volume 2011-15 Million litres
Packaged water volume 2011-15
120
100
100
100
100
100
100 80 60
2011
2012
2013
2014
2015
40
Volume (mln litres) 20
% change 0 2011
2012
2013
2014
2015
Per capita consumption (litres)
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Global packaged water Market value 2011-15
2011
2012
2013
2014
2015
Value (million US$) % change Per capita expenditure (US$)
Commentary. Commentary. Commentary.
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Global packaged water Market value per litre 2011-15
2011
2012
2013
2014
2015
Value per litre (US$) % change
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Global premium water Market volume 2013-15 Volume % share, 2015 Volume (mln litres)
2013
2014
2015
Premium (mln litres) Rest (mln litres) 50.0%
Total
50.0%
Premium (% share) Premium (% share)
Rest (% share)
Rest (% share)
Total
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Global premium water Market value 2013-15 Value % share, 2015 Value (mln US$)
2013
2014
2015
Premium (mln US$) Rest (mln US$) 50.0%
Total
50.0%
Premium (% share) Premium (% share)
Rest (% share)
Rest (% share)
Total
Commentary. Commentary. Commentary.
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Global premium water Market value per litre 2013-15 US$ 1.60 1.55 1.50 1.45 1.40 1.35 1.30 1.25 1.20 1.15 1.10 1.05 1.00
Premium water vpl 2013-15
1.25
1.25
1.25
2013
2014
2015
Value per litre (US$) 2013
2014
2015
% change
Commentary. Commentary. Commentary.
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Global premium water Leading countries in 2014-15, volume and market share Country
Volume, mln litres 2014
% volume share 2014
Volume, mln litres 2015
% volume share 2015
Country Country Country Country Country Others Total Premium (million litres)
Commentary. Commentary. Commentary.
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Global premium water Leading brands in 2014-15, volume and market share Company
Brand
Company
Brand
Company
Brand
Company
Brand
Company
Brand
Company
Brand
Others
Others
Volume, mln litres 2014
% volume share 2014
Volume, mln litres 2015
% volume share 2015
Total Premium (million litres)
Commentary. Commentary. Commentary.
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Global premium water Premium water market share
Market Share by region
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%
CAGR (2010-15)
North America
Asia Pacific
West Europe
Africa
East Europe
North America
C & L America
Middle East
Asia Pacific
C & L America
Middle East
East Europe
Africa
West Europe
% Growth
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5: Country focus: China
27
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Country packaged water Market volume 2011-15 Million litres
Packaged water volume 2011-15
120
100
100
100
100
100
100 80 60
2011
2012
2013
2014
2015
40
Volume (mln litres) 20
% change 0 2011
2012
2013
2014
2015
Per capita consumption (litres)
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Country packaged water Market value 2011-15 2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Value (local currency) % change Per capita expenditure (local)
Value (million US$) % change Per capita expenditure (US$)
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Country packaged water Market value per litre 2011-15
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Value per litre (local currency) % change
Value per litre (US$) % change
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Country premium water Segment volume 2013-15 Volume % share, 2015 Volume (mln litres)
2013
2014
2015
Premium (mln litres) Rest (mln litres) 50.0%
Total
50.0%
Premium (% share) Premium (% share)
Rest (% share)
Rest (% share)
Total
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Country premium water Segment value 2013-15 Value (local currency)
2013
2014
2015
Premium (local currency) Rest (local currency) Total Premium (% share) Rest (% share) Total
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Country premium water Segment value per litre 2013-15
2013
2014
2015
2013
2014
2015
Value per litre (Yuan) % change
Value per litre (US$) % change
Commentary. Commentary. Commentary.
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zenithinternational specialist consultants to the food and drink industries worldwide
Country premium water Leading brands in 2014-15, volume and market share Company
Brand
Company
Brand
Company
Brand
Company
Brand
Company
Brand
Company
Brand
Others
Others
Volume, mln litres 2014
% volume share 2014
Volume, mln litres 2015
% volume share 2015
Total Premium (million litres)
Commentary. Commentary. Commentary.
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Country premium water Future outlook Commentary. Commentary. Commentary.
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6: Country focus: Germany
38
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7: Country focus: Japan
48
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8: Country focus: UAE
58
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9: Country focus: USA
68
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10: Other potential markets
79
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Other potential markets Country
Commentary
Commentary
Commentary
Commentary
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Commentary
Country
Commentary
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11: Premium sub-segmentation
82
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Premium distribution channels Retail and OOH
Commentary. Commentary. Commentary.
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Premium sub-segmentation Super and ultra premium Commentary. Commentary. Commentary.
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Premium sub-segmentation Super premium water SWOT analysis
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12: Industry challenges
88
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Industry challenges External factors Commentary Commentary Commentary
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13: Outlook
90
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Outlook Conclusions and the future Commentary Commentary Commentary
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14: Brand profiles
92
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Acqua Panna Nestlé Waters Company: The brand belongs to San Pellegrino S.p.A, which, in 1998, was acquired by Nestlé Waters, and now sits under the global market leader’s water portfolio. Product: Natural spring water. Sourced from 3,700 feet above sea level in the Apennine Mountains in Tuscany, Italy. In 2014, to celebrate its 450th anniversary, the brand conducted a global redesign, with new packaging designed by CARTILS. Volume sales: Approximately 230 million litres worldwide in 2015. Packaging: Glass: 250ml, 500ml, 750ml, 1 litre. PET: 500ml, 750ml, 1 litre. Various multipacks available. Distribution: Majority of sales are in its domestic market (Italy), although also available in a selected number of countries including the UK and Germany. The company began exporting Panna to the US in 1994. Channel analysis: Retail and out-of-home/in-home Predominantly on-trade in export markets.
93
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market
(Italy).
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STRATEGY & MANAGEMENT MERGERS & ACQUISITIONS COMMERCIAL & MARKET OPERATIONS & TECHNICAL WATER & GEOTHERMAL ENVIRONMENT & CARBON PACKAGING & DISTRIBUTION
2016 Data Sheet Sample Full 86 country level datasheets, 2010-2015
zenithinternational specialist consultants to the food and drink industries worldwide
Packaged water volume (mln l) Country
2010
2011
2012
Packaged water vol % change 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
Premium water volume (mln l) 2010
2011
2012
2013
2014
2015
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Premium water vol % change Country
2010/11 2011/12 2012/13 2013/14 2014/15
Premium vol as % of packaged 2010
2011
2012
Packaged water value (US$ mln) 2013
2014
2015
2010
2011
2012
2013
2014
2015
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Packaged water val % change (US$) Country
2010/11 2011/12 2012/13 2013/14 2014/15
Premium water value (US$ mln) 2010
2011
2012
Premium water val % change (US$) 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Premium val as % of packaged Country
2010
2011
2012
Packaged water vpl (US$) 2013
2014
2015
2010
2011
2012
Packaged water vpl % change (US$) 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Premium water vpl (US$) Country
2010
2011
2012
Premium water vpl % change (US$) 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
Packaged water value (euro mln) 2010
2011
2012
2013
2014
2015
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Packaged water val % change (euro) Country
2010/11 2011/12 2012/13 2013/14 2014/15
Premium water value (euro mln) 2010
2011
2012
2013
Premium water val % change (euro) 2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Premium val as % of packaged Country
2010
2011
2012
Packaged water vpl (euro) 2013
2014
2015
2010
2011
2012
Packaged water vpl % change (euro) 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Premium water vpl (euro) Country
2010
2011
2012
Premium water vpl % change (euro) 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
Packaged water value (local mln) 2010
2011
2012
2013
2014
2015
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
TOTAL
zenithinternational specialist consultants to the food and drink industries worldwide
Packaged water val % change (local) Country
2010/11 2011/12 2012/13 2013/14 2014/15
Premium water value (local mln) 2010
2011
2012
2013
Premium water val % change (local) 2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
zenithinternational specialist consultants to the food and drink industries worldwide
Premium val as % of packaged Country
2010
2011
2012
Packaged water vpl (local) 2013
2014
2015
2010
2011
2012
Packaged water vpl % change (local) 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
zenithinternational specialist consultants to the food and drink industries worldwide
Premium water vpl (local) Country
2010
2011
2012
Premium water vpl % change (local) 2013
2014
2015
2010/11 2011/12 2012/13 2013/14 2014/15
USA Canada North America
Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe
Belarus Bulgaria Croatia Czech Republic Estonia Hungary
zenithinternational specialist consultants to the food and drink industries worldwide