Health concerns helping bottled water grow in UAE’s mature market
Abu Dhabi-based food and beverage firm Agthia Group, which is best known for its Al Ain brand of bottled water, announced this week that its 2013 net sales increased 14% over the past year to $411m.
Kartik Dwivedi, partner at Mumbai-based Dassler Business Intelligence, told FoodNavigator that several bottled water companies are looking to enter developing markets, with immense growth potential in regions including South and Southeast Asia, and the Middle East.
“The per capita consumption of bottled water in the UAE is already pretty high and this segment is pretty mature with not much room for growth when it comes to supermarkets, corner shops and small retail stores,” he said.
On-trade growth
However, there is a huge growth opportunity in the sectors when you talk of restaurants, pubs, cafes, and other on-trade options, he added.
The economy is growing again after the GFC [Global Financial Crisis], which badly affected the UAE. But we are seeing that consumer confidence is coming back…Emiratis are going out more often than before,” he said.
The hotel and restaurant sector is also thriving again, Dwivedi pointed out.
“On top if that, there is the new wave of healthy eating and drinking that is sweeping through the urban population and we are seeing consumers choose bottled water over things like sparkling water and sodas more often,” he added.
A note from consulting firm Booz Allen Hamilton suggested that by 2020, 32% of the adult UAE population aged 20-79 may have diabetes or pre-diabetes, while the over-18 adult population has already reached a diabetes or pre-diabetes rate of 44%.
No more Coke?
Dwivedi thinks that the market would therefore continue to grow on the back of rising health and weight concerns among consumers in the country. “More people will shun Cokes and Pepsis and opt for bottled water instead,” he added.
Catering to these factors, during 2013, Agthia launched Alpin spring water, which is positioned as a healthier premium brand in Turkey and in selective UAE outlets. A full-fledged UAE launch is planned for the first quarter of 2014.
On the other hand, Dwivedi said, the growing economy has again increased the low-income population in the country. “This segment of the population will feed the bottled water market too…As they do better and earn better, they will make the switch to safer bottled water from government supplied water.”
