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Bottled water amounting to big bucks in Indonesia

By RJ Whitehead

- Last updated on GMT

Related tags Bottled water Coffee

Bottled water amounting to big bucks in Indonesia
Indonesia's bottled water market may be one of the most high valued markets in the world, but there are still plenty of opportunities for growth, new research from UK-based research firm Mintel said.

According to Mintel, a comparison of Indonesia’s bottled water per capita consumption and its growth rate show signs of maturity and value that are comparable with other such high value markets.

But there is also still plenty of room for growth and the market is becoming hugely attractive to global drinks companies, for whom Asia has recently become a top priority.

Research by the firm showed that that retail volume growth of bottled water doubled year on year to 2011—going from 8% in 2010 to 20% in 2011. At the same time, new product development also took an upward curve with regards to consumer demand—with bottled water accounting for just 1% of the overall non-alcoholic drinks market in 2009, to 10% in 2012. 

New generation, new opportunities

At present, one in ten new products launched in the non-alcoholic beverages category in Indonesia is bottled water, the firm said.

John Forsyth, global drinks analyst at Mintel, said that not only is the country becoming wealthier but also its already high population of around 240 million is expanding rapidly.  

“As a young country with the majority of people aged 35 and under, a new generation is growing up with different values than their predecessors such as purchasing water in bottles rather than being used to the routine of boiling tap water,”​ Forsyth pointed out.

Consumption to rise

According to the research, consumer demand for bottled water, coupled with local expertise in the marketplace backed by increased investment from foreign brands, mean that the stage is set for consumption to grow even further.

Indonesian consumers currently consume 49 litres of bottled water per head—up from just 29 litres per head in 2006—and Mintel estimated that this will grow to a massive 86 litres per head in 2016.

Forsyth pointed to food and beverage major Danone, which with the help of local knowledge, have established their distribution network, multiple production facilities and reputation as a provider of safe and quality water.

“It is likely to become the springboard with which to introduce more premium variants to the emerging middle classes,”​ he added.

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