Market Trends of Asia-Pacific Bottled Water Industry
Premiumization With the Growth of Fortified and Flavored Water
- Functional water, enriched with vitamins and other beneficial components, has gained popularity among consumers due to its convenience, purported health benefits, and improved taste over tap water. As concerns about various health issues have grown, including heartburn, weight gain, and digestive problems, people are turning to healthier options like flavored and functional water.
- The functional water industry is growing as consumers seek relatively inexpensive options with different packaging options like single-serve bottles. In the Asia Pacific region, the bottled water market is heavily reliant on technology and equipment used to produce bottled beverages due to the absence of clean water and various body contaminations.
- The introduction of new flavors with appealing packaging is expected to drive the growth of the bottled water market in the Asia-Pacific region. The rising per capita income and international tourist arrival in Asia-Pacific countries are also driving the premium bottled water market. For instance, the Bureau of Immigration (India), 7 million international tourists arrived in India in 2021.
- Increasing awareness towards physical and mental well-being is promoting the consumption of organic beverages, pH-balanced ingredients, and sugar-free beverages. Additionally, industry players often cite water purity as a distinguishing feature, while some products differentiate themselves by offering functionality. Branding, positioning, and product packaging, including glass containers, are assisting manufacturers in projecting a more luxurious image.
- The bottled water industry is expected to expand as fortified and flavored water quickly premiumize. Major players in the industry are concentrating on big advertising campaigns and celebrity and social media influencers' endorsements to increase brand visibility and profitability. The market is also benefiting from the trend of offering premium, one-of-a-kind items with eye-catching labels and customized packaging, such as sparkling water in hand-crafted wooden boxes.
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India is the Fastest Growing Market
- The rapid growth of the bottled water industry in India can be attributed to increased disposable income, a weak public water distribution system and infrastructure, and the Indian government's lack of concern for the nation's water resources. Despite being blessed with abundant natural water resources, the rising population, alarming rates of global warming, and rapid industrialization have resulted in water scarcity due to a lack of adequate and improved management of water supply systems, leading to increased water consumption, waste, and deterioration of water supply networks.
- The bottled water industry has seen new opportunities arise due to water scarcity in India, with many new players entering the market, particularly in rural areas, as there is no control over the entry and quality of products. The rise in health awareness, increase in tourism, and ease of availability of bottled water have contributed to an increase in per capita consumption of bottled water in India.
- The market is dominated by the top five players, but they struggle to penetrate small cities and towns due to poor infrastructure, creating opportunities for small regional players. Furthermore, flavored bottled drinking water has become popular in India, with different kinds of flavored water containing fruit essence and artificial sweeteners acting as a substitute for plain bottled water. This shift is creating an opportunity to expand the product line of bottled water manufacturers in India.
- Market growth is being spurred on by rapid urbanization and the rising adoption of a healthy lifestyle by city inhabitants who prefer enriched water. Fortified water is preferred over soft drinks since it is healthier and includes no artificial sweeteners, tastes, or colors. There has been a recent shift in consumer preference away from beverages rich in sugar and artificial ingredients and towards healthier or more balanced.
- In addition to individual sales, market players are focusing on institutional sales through partnerships with airlines, movie theatres, and hotels, increasing the penetration of the product in the market and leading to a rise in overall sales volume in India.
- For instance, according to the Indian Railway Catering and Tourism Corporation (IRCTC), approximately INR 1.722 billion of revenue was generated from Railneer packaged drinking water for Indian Railways Catering and Tourism Corporation Limited in 2022.
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