China eyes US's top spot in packaged water following massive growth
According a new report by Canadean, the beverage industry market research firm, in just seven years China has doubled its share of the global market, and by the end of this year is expected to topple the US from its leading position.
What’s more the pace with which China is catching up is astounding: while America was ahead of China to the tune of just less than 2bn litres last year, Canadean’s research now suggests China will be 1bn litres clear of its rival by the end of this year.
Total vs. per-capita consumption
However, in per capita terms, the picture is very different.
Canadean’s latest research shows that China is running well below the global packaged water average of 30 litres per head, and at only around one-fifth of that of the US.
But while the country lags in this regard, this scenario still highlights the huge potential for future growth in China’s packaged water market.
The main thrust behind the surge in China’s consumption lies in the mineralised water - or table water with added minerals - and mineral water segments.
Increasing consumer health consciousness has seen mineralised water accelerate over the decade to claim a 42% market share. More recently, a notable shift towards mineral water has emerged as consumers become more aware of the health benefits of its consumption.
Producers are increasingly mindful of this new trend and have been seeking out high-quality natural mineral water sources in order to underline theimage of their brands. A leading Chinese domestic player, Jingtian, even turned its sights overseas, investing in a production base in Scotland in 2012.
Driven by local brands
Canadean’s research suggests that the producers behind the leading brands, such as Kangshifu (Tingyi Holding Corp), Nongfushanquan (Zhejiang Nongfushanquan Water Co Ltd), Ice Dew (Coca-Cola) and Yibao (China Resources Enterprises), will be instrumental in driving future growth.
The focus is likely to be increasingly on value-added mineral products, which offer a more favourable profit margin. Continued investment in production expansion and improvement of distribution networks can be expected to fuel the competitive energy in the packaged water market.
From a consumer point of view, aside from the health benefits of packaged water, its affordability, particularly in a climate of slowing economic growth, will be highly attractive.
