Packed Water Bottles

HS CODE: 220110 and 220190
• From 2014 to 2018 due to rising concern regarding various health problems, which may arise by drinking of contaminated water, the global bottled market grew to over US$ 200 billion following 9% yearly growth.
• The bottled water market is expected to surge at a CAGR of 9% from 2019 to 2024. The market studied is well established, and is growing at a decent pace. As per the volume, the market escalated by 100 billion litres in the last four years.
• According to value, the market is going to touch around US$ 350 billion by 2021, following 10% year-on-year growth.
• The Indian market is expected to reach US$ 60.06 billion by the end of 2023, from its current value of US$ 24.1 billion, expanding at a compound annual growth rate (CAGR) of 20.75% from 2018.

Market Overview

The bottled water market is expected to surge at a CAGR of 9% from 2019 to 2024. The market studied is well established, and is growing at a decent pace. As per the volume, the market escalated by 100 billion litres in last four years. According to value, the market is going to touch around US$ 350 billion by 2021, following 10% year-on-year growth. The volume growth will be a bit lower, but not by a significant number, at 9.3%. Global per capita average expenditure on packed water bottle will also continue to grow till 2021, burgeoning to US$ 45.3 by 2021 from US$ 32.3 per head in 2017.

This growing demand can be credited to consumer propensity for specifically demanding high-quality drinking water, the fear of diseases as an aftermath of drinking polluted tap water, and the ease of portability and convenience provided by bottled water. In cognisance of this trend, the introduction of eco-friendly packaging and flavoured water with regulated ingredients can provide an opportunity & prospect for global market growth.

Bottled water manufacturers are capitalizing on innovative packaging strategies of bottled water to reinforce their brand image and to create distinction in the bottled water market. These innovative packaging options include transparent sophisticated bottles, recyclable and resealable package material and coatings applied on a can to enhance the customer experience through unique visual effects along with increasing shelf appeal. For example, recently a firm manufactured a slim, 330ml bottle with a transparent label, permitting the customer to see the purity of the water.

Bottled water companies are involved in purifying and bottling water, and then marketing and distributing it for commercial and personal use. End users for bottled water group constitute both on-trade and off-trade consumption that includes institutional and retail customers. Retail customers can purchase bottled water from different retail or food service formats. Institutional customers such as restaurants, offices and hotels purchase bottled water from wholesalers or distributors.

Geographical Dimensions

The bottled water market demand in Asia-Pacific is the largest in the world by volume. It currently has about 42.5% share of the global bottled water market. Increasing awareness & hygiene standards along with rudimentary public water infrastructure in various Asia Pacific countries is a key factor fuelling the proliferation of the bottled water industry. The bottled water market in Americas (North & South) is the second largest in the world by volume. It currently has about 30.8% share of the global bottled water market. Increasing hygiene awareness, lack of well-developed public water infrastructure and demand for functional bottled water are some of the factors that are driving bottled water market in the Americas.

By product type, packaged drinking water – was still the largest segment in the global bottled water market. By packaging, plastic bottle was the largest segment in the global bottled water market. By pack size, 1501 ml and above is the largest segment in the global bottled water market.

Bottled water consumers are increasingly adopting new products with health benefits. Functional water has added functional value in the form of minerals, oxygen and vitamins. Since consumers prefer to try new tastes and follow the best of them, the availability of a range of flavors and options in functional water will boost the market growth

Global Trade

Source: Trade Map 2019

Packed/bottled water is a prospective industry that’s growing significantly. If we observe the global exports of packed water bottle, it grew by a CAGR of 3% in the last five years. Top exporting economies are France, China, Italy, Belgium, USA and Germany. Top importing economies are USA, Hong Kong, Belgium, Germany, UK and Japan.

Singapore imports 86% of its water demand in the form of bottled water. On the other hand, Nigeria has zero imports of bottled water. South Africa consumes the least bottled water per capita (8.3 litres per capita per year) and Saudi Arabia consumes the maximum bottled water per capita per year (365.3).

The global bottled water market is highly uneven and fragmented with a large number of local players present in most countries. The leading players in the global market that have a multi-country presence are DANONE, Nestle, Coca-Cola and Pepsi-Co. Nestle Waters was the largest competitor in the bottled water market in 2017, followed by Danone, Hangzhou Wahaha Group Co., Ltd., Coca-Cola, Nongfu Spring Limited, Tingyi (Cayman Islands) Holding Corp and Pepsi-Co.

Indian scenario

The market is expected to reach US$ 60.06 billion by the end of 2023, from its current value of US$ 24.1 billion, expanding at a compound annual growth rate (CAGR) of 20.75% from 2018. Based on volume, the market is likely to reach 35.53 billion litres by 2023, expanding at a CAGR of 18.25% from 2018 to 2023.

The major strength of India as a market is of course its population which is 17.6% of the global population. In addition to this, the per-capita income of Indians witnessed a growth of 8.1% in 2018. Moreover, increased awareness among the growing population about the importance of safe drinking water for maintaining good health, along with a sharp rise in per capita income is creating a demand for bottled water in India. However, penetration of packaged drinking water is low in rural India. 

India imported US$ 2.21 million worth of mineral and aerated water in 2018 (not containing any colour/flavouring), with major sources being Bhutan (US$ 0.98 million), France (US$ 0.41 million) and Belgium (US$ 0.33 million). Exports are even more miniscule at US$ 0.37 million,  indicating that the market is largely domestically driven. 

Tourists prefer bottled water to normal tap water. The rate of foreign tourists in India is expected to increase at a rate of 6.7% during 2018-2025. This, in turn, is anticipated to further boost the sale of bottled water in India.

Bottled water in India is sold in four major kinds of SKUs – one-liter bottles, two-liter bottles, 500 milliliter bottles, 250 milliliter bottles, pouches, and barrels of 15-20 liters. Among the different SKUs, one-liter bottles occupied the largest market share of ~42% in 2018, followed by 500 ml and 250 ml bottles. Different flavoured bottled drinking water varieties have also gained in popularity, containing fruit essence and artificial sweeteners like soda, cola, juice, and other sweetened beverages.