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2016
Bottled Water Coolers and Point of Use Report
USA
Š Zenith International Ltd 2016
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Table of contents Bottled water coolers and point of use Introduction
6
Methodology
7
Commentary Market overview - bottled water coolers (BWC) and point of use (POU) - BWC and POU in context - West Europe evolution 2010-2015e US Overview & Industry developments Market structure - bottled water coolers - Throughput - Cancellations - Contract lengths - Outlets - Machine types - Water types - Legislation - Maintenance and additional services - Unit split by distribution channel (HOD, Retail, online) - Brand market share (top 5 brands) overall and split by distribution channel (HOD, Retail, online) - Retailer market share (top 5 retailers) - Price points analysis of top 5 brands and differentials in online and retail - Category household penetration
8 8 10 18 20 20 20 21 22 22 23 23 24 25 26 28 28
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Table of contents Bottled water coolers and point of use (cont.) Market structure - point of use - Conversion - Outlets - Machine types - Rented/ sold - Maintenance and additional services - Unit split by distribution channel (HOD, Retail, online) - Brand market share (top 5 brands) overall and split by distribution channel (HOD, Retail, online) - Retailer market share (top 5 retailers) - Price points analysis of top 5 brands and differentials in online and retail - Category household penetration Price structure and revenue indicators - bottled coolers and point of use Bottled coolers - companies Bottled coolers - brands Point of use - distributors Bottled coolers and POU forecasts
29 30 32 33 34 34 35 36 37 38 38 40 41 42 43 44
Charts Units in December - units/ million litres, % growth 2010-15e Bottled water cooler throughput, 2014-15 Bottled water cooler cancellations, 2014-15 Bottled water cooler outlets (household penetration), 2015 Bottled water cooler machine types, 2015 Bottled water cooler water types, 2015 Bottled water cooler units, by distribution channel (HOD, retail, online) 2010-2015 Bottled water cooler units, top 5 brands in HOD, 2015
18 20 20 21 22 22 24 25
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Table of contents Bottled water coolers and point of use Charts (cont.) Bottled water cooler top 5 retailers, 2015 Bottled water cooler price points of top 5 brands in online and retail, 2015 Bottled water cooler household penetration, 2015
26 28 28
Point of use conversion rate, 2014-2015 Point of use outlets (household penetration), 2015 Point of use machine types, 2015 Point of use rented/sold, 2015 Point of use units, by distribution channel (HOD, retail, online), 2010-15 Point of use units, by top 5 brands in HOD, 2015 Point of use top 5 retailers, 2015 Point of use price points of top 5 brands, 2015 POU household penetration, 2015
30 32 33 34 35 36 37 38 38
Bottled water coolers and POU price structure, 2014-15 Bottled water coolers companies, machines, 2010-15 Bottled water coolers companies, volume, 2010-15 Bottled water coolers brands, volume, 2010-15 Top 5 brands, price evolution 2010-2015 (US$/unit) Point of use distributors, machines, 2010-15 Top 5 brands, price evolution 2010-2015 (US$/unit) Bottled coolers and POU forecasts, 2015-20f Bottled coolers and POU split forecasts, 2015-20f
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Table of contents Bottled water coolers and point of use (cont.) Appendix Definitions Symbols US State abbreviations
46 47 48
Company profiles Key company profiles NestlĂŠ Waters North America DS Waters of America Culligan Quench Onesource Water Primo Vertex Waterlogic Other company profiles
49 50 51 52 53 54 55 56 57 58
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Introduction Bottled water coolers and point of use Since 2010, the point of use (POU) concept has increasingly stolen territory from bottled water coolers in the US. This has been mainly on the back of its ‘green’ credentials and increased convenience. In addition, the POU segment benefitted from the popularity and ubiquitous nature of coolers, paving the way for the transition from bottled coolers to POU. Nevertheless, the overall cooler market is highly competitive and presents a challenging environment in which to operate. On the bottled cooler side, the market is extremely consolidated in the USA with 3 major companies having significant national presence. On the POU side, the market remains highly fragmented with most companies having only regional presence. Note: For the purpose of this report, the term 'POU' represents a free-standing unit which is not integrated into any other furniture or mounting. The unit may be either floor-standing or counter-top. Zenith excludes from this definition units which may include POU purification technology but are installed within a cupboard, termed under-the-counter or under sink units and generally feature a pipe connection from the unit to a separate tap which is generally located over a sink, alongside the standard mains water tap. To the contrary, many players within the US market will consider the whole gamut of units equipped with a filtration or reverse osmosis purifying device, whether free-standing or not, to be ‘point of use’. In its contacts with US distributors, Zenith has attempted to ensure that only free-standing POU units have been included in the total market estimates.
Definitions: For the purpose of this report, the sales channels were defined as follows: HOD/Direct Sales represent the sales made directly by manufacturers or authorised distributors either by phone, email, website or through other methods. Includes online-only distributors, i.e. Bottless.com; Retail are the sales made by brick-and-mortar retailers either in-store, online, via phone, email or through other methods; Online are sales made using independent online websites, i.e. Alibaba, Amazon, eBay etc. Does not include company or retailer websites.
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Methodology Bottled water coolers and point of use In undertaking its research, Zenith depends upon the goodwill and co-operation of firms in the marketplace to provide accurate figures on their activities. Every effort has been made to include as broad a range of players active in the industry as possible. However, as water delivery or POU are not a central or actively marketed product for certain players and thus finalised figures may not be available, Zenith has, in certain instances, had to produce a ‘best estimate’ from industry sources. This is certainly the case for all 2015 figures where finalised figures are not available yet. Since comparisons tend to be based on the size of cooler portfolios, overstatement of installation numbers is a risk inherent in a detailed analysis of the industry. Ultimately Zenith has had to make its own judgement and therefore all unit numbers should realistically be regarded as Zenith estimates. In its contact with companies offering water purification, water delivery and POU services within the US market, in addition to suppliers to the industry and other organisations linked to water purification, Zenith is confident that it has identified and contacted the leading cooler players across the country. However, the US market is characterised by a high level of fragmentation and it is believed that there are more than 500 small players across the country. For the most part, however, these players service portfolios of just a handful of units, of as few as 50 or 100 in total. Zenith has adjusted its market totals for the collection of small operators with the inclusion of an ‘Others’ category. The cooler unit totals presented in this report represent the cumulative number of units in place at the end of each given year, taking into account any drop-off of old units. The reason that cumulative totals are applied is that each active unit generates revenue, either through rental or servicing or water delivery. Generally, any growth expressed, either historic or forecast, applies to the growth of the cumulative total. Zenith would like to express its sincere gratitude for all help and assistance received from the cooler industry during this report’s research process.
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Market overview BWC and POU in context - West Europe evolution, 2011-2015 ď ˇ Commentary 2011
2012
2013
2014
2015
Bottled water coolers (BWC) Units % change Units per thousand people % share of total cooler market Point of Use (POU) water coolers Units % change Units per thousand people % share of total cooler market Total coolers Units % change Units per thousand people
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Market overview BWC and POU in context - West Europe evolution, 2011-2015
Commentary
Commentary
Commentary
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Market overview US Overview & industry developments
Commentary
Commentary
Country: Cooler Market Evolution 2011-2015 15
Commentary
Commentary
Commentary
Commentary
10
4 5
1
Million USD
Thousand Units
7
0
2010
2011
2012
2013
2014
2015
Years
. BWC units
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POU units
Coolers revenue (mUSD)
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Market overview US Overview & industry developments 2010
2011
2012
2013
2014
2015
Bottled water coolers Units % growth Units per '000 people Million litres % growth Point of Use Units % growth Units per '000 people Total coolers Units % growth POU % share BWC % share
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Market overview US Overview & industry developments
Commentary
Commentary
Commentary
Commentary
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Market overview US BWC and POU overview & industry developments
S
Strengths
Weaknesses
Commentary
Commentary
Commentary
Commentary
Commentary
Commentary
Commentary
Commentary
O
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W
Opportunities
T
Threats
Commentary
Commentary
Commentary
Commentary
Commentary
Commentary
Commentary
Commentary
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Market overview US Overview & industry developments Industry developments Commentary Commentary Commentary Commentary
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Market overview US Overview & industry developments Industry consolidation
Commentary.
Commentary
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Buyer
Target
Type
Year
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Bottled water coolers market
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Market structure Bottled water coolers Bottled water cooler volume 2010-15
Bottled water cooler units 2010 -15 70
60000 50,000
50,000
50,000
50,000
50,000
40000 30000 20000
60
2010
2011
60
60
60
60
2014
2015
50 40 30 20
10000 0
60 60
Million litres
BWC Installed units
50,000
50000
10
0 2010
2011
2012 2013 Years
2014
2015
2012 2013 Years
Commentary Commentary Commentary Commentary
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Market structure Bottled water coolers Throughput Commentary Commentary
Throughput
2014
2015
2014
2015
Litres per cooler
Cancellations Commentary Commentary
18.9l bottles per cooler per month
Cancellations Quit rate %
Contract lengths Commentary Commentary.
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Market structure Bottled water coolers
Outlets, 2015
Outlets Commentary Commentary
Commercial
50.0%
50.0% Domestic
Machine types
Commentary
Commentary
Machine types, 2015
Hot-cold 50.0%
50.0% Cold-ambient
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Market structure Bottled water coolers Water types, 2015
Water types
Commentary
Commentary
25.0%
25.0%
Eau de boisson Mineral
Purified Spring Other water type 25.0%
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25.0%
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Market structure Bottled coolers Legislation Commentary Commentary Maintenance and additional services Commentary Commentary
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Point of use water coolers market
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Market structure Point of use water coolers
Point of use cooler units 2011-16
POU Installed units
12,000 10,000 8,000 6,000
Units added 4,000 2,000 0
BWC to POU conversions
New POU
2014
2014
2015
2015
Replacement rate % 2011
2012
2013 Years
2014
Number of units
2015
Conversion
Commentary
Commentary
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Market structure Point of use water coolers Outlets Commentary Commentary Commentary
Outlets, 2015 16.7% 16.7%
Offices 16.7%
Factories Institutions Shops Domestic
16.7%
Others
Machine types
16.7% 16.7%
Commentary Commentary Machine types, 2015 25.0%
25.0% Hot-cold Cold-ambient
Carbonated Others
25.0%
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25.0%
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Market structure Point of use water coolers Rented/sold
Rented vs. Sold units, 2015
Commentary Commentary
Rented Sold 50.0%
50.0%
Maintenance and additional services Commentary Commentary
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Bottled water coolers and Point of use market
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Price structure and revenue indicators Bottled water coolers and point of use Point of use
2014
2015
Bottled water coolers
Average monthly rental ($)
Average monthly rental ($)
Average sales price per unit ($)
Average sales price per unit ($)
Total revenue ($)
Total revenue ($)
- Revenue from rented units
- Revenue from rented units
- Revenue from sold units
- Revenue from sold units
2014
2015
Commentary Commentary Commentary
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Bottled water coolers Companies Machines in December
2010
2011
2012
2013
2012
2013
2014
2015
% share 2015
% 15-14
2015
% share 2015
% 15-14
Company 1 Company 2 Company 3 ‌ Others Total Market
Million litres
2010
2011
2014
Company 1 Company 2 Company 3 ‌ Others Total market
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Bottled water coolers Brands
Million litres
2010
2011
2012
2013
2014
2015
% share 2015
% 15-14
Brand 1 Brand 2 Brand 3 …
Others Total market
Commentary Commentary
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Point of use Distributors Machines in December
2010
2011
2012
2013
2014
2015
% share 2015
% 15-14
Company 1 Company 2 Company 3
Others Total market
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Bottled water coolers and point of use Forecasts Units in December
2015
2016f
2017f
2018f
2019f
2020f
CAGR 2015-2020
% growth 2020 - 2015
Bottled water coolers Units % growth Million litres % growth Point of Use Units % growth Total coolers Units % growth POU % share BWC % share
Commentary Commentart
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Bottled water coolers and point of use Forecasts
Commentary
Commentary.
Commentary
50.0%
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50.0%
BWC/POU split, 2020
BWC/POU split, 2015
BWC/POU split, 2010
POU
POU
POU
BWC
BWC
BWC
50.0%
50.0%
32
50.0%
50.0%
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Appendix
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Bottled coolers and point of use Appendix Definitions Manufacturer: Company that manufactures and/or assembles POU units for sale to suppliers and/or distributors. Supplier: Company that purchases POU units from manufacturers before reselling them to distributors and/or end-users. Distributor: Company that sells or rents POU units direct to end-users. Symbols e f BLWA BPA EPA HOD IBWA NRDC NSF OCS PET POU RO ROI UV WQA
Estimate Forecast Bottleless Water Association Bisphenol A Environmental Protection Agency Home and Office Delivery International Bottled Water Association Natural Resources Defense Council NSF International, known as National Sanitisation Foundation until 1990 Office coffee service Polyethylene terephthalate Point of use Reverse osmosis Return on investment Ultra violet Water Quality Association
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Bottled coolers and point of use Appendix US State abbreviations Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas
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AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS
Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina
KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC
35
North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY
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Top company profiles
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COMPANY NAME Category: Address: Tel: Website:
Fax:
1-203-531-4100
Company Structure: Ownership: Senior management: Related activities:
Brand
Description
Pack type
Sizes (litres)
Marketing Analysis Sales Volume Million Litres
2010
2011
2012
2013
2014
2015
Production Poland Spring NestlĂŠ Pure Life Others Sales
Units Serviced Units placed on market by year end (total of units through current rental contracts, plus number sold directly)
Unit Numbers
2010
2011
2012
2013
2014
2015
Total units Total BWC units Total POU units
Marketing Analysis Packaging (2015) R Polycarb PET/PVC
Outlets (2015)
Advertising, 2015
Homes Offices
Unit type % Hot-cold Cold-ambient Cold
Commentary & Short company description .
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Other significant company profiles
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Company Name Category: Address: Tel: Website:
Fax:
Company Structure: Ownership: Senior management: Related activities: Non-related activities:
Marketing Analysis Unit type % Hot-cold Hot-cold-ambient Cold-ambient
Outlets (2015)
Advertising, 2015
Away from Home Offices Others Homes
Commentary:
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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 related to the report distribution. Such readers however will not be considered “users� of this report.
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