The combined forces of the economic downturn and environmental pressures are causing a sharp slowdown in the global bottled water market, according to a recent analysis by global beverage industry specialists, Canadean. The situation is most marked in the USA, where Canadean is forecasting annual growth of under 1% for the next five years. This is a significant deceleration from the double-digit rates seen from 2000 to 2008, and has major implications for the PET plastics industry, in particular.
“In the decade up to 2008, the US bottled water market accounted for 20% of the growth in global PET demand in beverages, “ comments Emily Neill, Business Development Director at Canadean. “This growth driver has been switched off, and the momentum in bottled water demand is now firmly focused in the dynamic Asian markets.”
High profile tap water campaigns across many US states, and bottled water bans by public institutions have resulted in consumers reverting to tap and filtered water. This is being mirrored in some major European markets such as France and the UK, with the economic conditions reinforcing this trend.
On a broader note, the prognosis for global commercial beverage consumption is relatively healthy. Beverage demand is forecast to weather the economic storm, growing by 2.0% in 2009 and 2.6% per annum in the longer term. The more buoyant categories include still drinks, nectars (juice drinks) as well as bulk and bottled water, where growth in countries such as China, India and Indonesia will compensate for the stagnation in western economies. After a near flat performance in 2009, carbonates are expected to return to a growth rate of 2% annually. Those companies with strong international exposure will benefit from rising demand in Asia to offset the tougher markets in North America and Europe.
Alcoholic drinks are likely to show a mixed picture, with beer, wines and spirits in gradual decline in Europe, where health and legislative issues are hitting traditional alcohol consumption. The pattern is clear: beer and spirits are in decline in their key markets such as Germany, the UK and Scandinavia, whilst wine is under pressure in France, Italy and Spain. Meanwhile, Asia will continue to be the engine for beer demand, with a projected annual growth rate of around 5%.
More intriguingly, the energy drinks category grew at double digit rates across a large number of countries in 2008, and is predicted to rise by nearly 10% globally in 2009. Upsizing in serving volume, the entry of more private label and B brand products, plus strong support from the multinational players are all factors pushing up consumption. And evidently in straitened times consumers are prepared to pay for that extra boost.
| Consumption Growth % per annum | 2008 - 09F | 2008 - 13F |
| All Commercial Beverages | 1.9 | 2.6 |
| All Soft Drinks | 2.2 | 3.1 |
| Packaged Water | 2.8 | 3.6 |
| Carbonates | 0.7 | 1.8 |
| Energy Drinks | 9.5 | 9.3 |
| Dairy Drinks | 1.3 | 2.2 |
| Beer | 2.2 | 2.8 |
Source: Canadean
This latest analysis comes from Canadean’s Global Beverage Forecasts report. This report is based on analysis and data from Canadean’s global network of country beverage specialists and provides forecasts for consumption of all commercial beverages out to 2014. The report also includes commentary and analysis for each beverage category in major markets. For further information please contact Canadean’s head office on tel: +44 (0)1256 394224 or email sales@canadean.com.
