Executive Summary

The UK bottled waters market was estimated to be worth around £319m in 1994, or 580 million litres. The market saw strong growth in 1994, with sales by volume rising by 18% and sales by value up by 14%. Price pressures remain strong in the industry, with average market prices declining in 1994. In 1995, sales growth is also expected to be strong, with volumes up by 15% and value sales up by 19%.

The bottled waters market consists of two main subsectors: still and sparkling. Still waters now account for around 60% of the UK market by volume. The past 3 or 4 years has seen the UK market beginning to stabilise with a 60:40 market split in favour of still waters, becoming the norm.

Flavoured water is still a niche segment of the market. However, the sector is growing fast and is now approaching 5% of the total UK market. Sales of flavoured waters are estimated by Key Note at around £25m in 1994, and are expected to rise to around £45m by the end of 1995.

Evian is the UK's leading brand of bottled water, well ahead of the second largest brand -- Volvic. The best selling domestic water is Aqua Pura which holds around 5.4% of the market. The two largest distributors in the market are Premier Waters and Coca-Cola & Schweppes Beverages (CCSB).

The bottled waters market has grown in conjunction with the changes in consumer attitudes and lifestyles over the past 10 to 15 years. The changes can be summarised as follows:

• increased concern with health
• concerns over the quality of mains, tap water
• the convergence of European lifestyles as a result of EU membership
• increased foreign travel.

The major factors impacting on the market today are:

• the recovery from recession
• attempts by manufacturers to broaden the target market
• the rise of own-label and tertiary brands
• increased importance of impulse, single-shot sales
• increased importance of planned, multipack sales.

Key Note estimate that volume sales of bottled waters will rise by 69.8% between 1994 and 1999, or at an average annual rate of 11.1%. Over the same period, sales by value are expected to grow by around 63.6%, or at an annual rate of 10.3%.

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