Bottled Water Industry
The size of the bottled water market makes it extremely attractive. With few real
demographic limitations, bottled water is among the more desirable beverage categories
from a supplier’s standpoint, as the industry offers a global market, where the number of
prospective buyers grows along with population and economic development.
Its lack of market limitations offers vast growth opportunity for companies that are able to
enter the bottled water industry and successfully obtain a share of the market, be it
regionally, nationally, or globally. Over the past couple decades, the popularity in both
developed and emerging markets has consistently grown, as increased attention to health
and fitness, growing concern over the safety of municipal drinking water, and sheer
convenience have made it the simplest of solutions to consumers seeking alternatives to
tap water or carbonated drinks. As even the largest markets for bottled water have
continued to display growth, opportunities have become even more prominent in
emerging-country markets, where annual growth rates have exceeded 20 percent in recent
years.
Although on the outside it is an attractive industry, entering the bottled water market brings
great challenges. Fierce competitive rivalry exists within this market, and a handful of
international food and beverage producers command the majority of the market share
worldwide. While the number of buyers is virtually unlimited, prospective entrants must
consider the large number and power of rivals competing for similar business.
In recent years, rivalry within the bottled water industry has been strengthened, and the
number of rivals has increased. These rivals range from global food and beverage
producers to small regional sellers. Increased innovation, decreasing prices in developed
markets, the acquisition of smaller sellers in less-developed yet rapidly growing
economies, and the use of strategic agreements to solidify positioning within established
markets have all contributed to this heightened rivalry. Tactical moves by the industry’s
largest players have forced smaller, regional sellers to find ways reduce production and
distribution costs, use differentiation strategies to market their product as unique, and
rethink their competitive approach within the industry. The buyers’ low cost of switching
brands has also contributed to the strengthening rivalry.
Suppliers to this industry play an enormous roll in the competition as well. They provide a
wide range of products and services to sellers including packaging supplies, bottling
equipment, land leases, source certification, equipment installation and transportation.
Suppliers within this industry are on the weaker side as there are a large number of
