Bottled Water Industry Essay

Case Study

3 Nov 2009

Bottled Water Market

1 . Exactly what are the strategy-shaping business and economic qualities of the water in bottles industry? Precisely what is the market like? A global bottled water industry forecast is growing by thirty percent through 2010 to reach roughly $82 billion in revenue. Bottled water is definitely thought to be more secure than municipal tap water and an alternative choice to high caloric carbonated beverages. Focus on exercise, health, plus the go-go way of life has made the United States' the largest marketplace for bottled water in the world. The only polyethylene terephthalate (PET) container has pleased customers using its convenience and portability. The global and U. S. marketplaces are controlled by a couple of food and beverage firms that promote the top 15 brands.

Stand: The Top 10 Bottled Water Brands in the US by simply wholesale revenue in 3 years ago Dasani (Coca-Cola) ($1. 6bn) Aquafina (PepsiCo) ($1. 5bn) Poland Early spring (Nestle Waters) ($878m) Arrowhead (Nestle Waters) ($586m) Nestle Pure Your life (Nestle Waters) ($545m) Supply: Beverage Marketing Corporation

Amazingly Geyser (CGWC) ($529m) Deer Park (Nestle Waters) ($500m) Ozarka (Nestle Waters) ($352m) Ice Pile (Nestle Waters) ($292m ) ZephyrHills (Nestle Waters) ($272m)

There is intense competition among these manufacturers and they almost all have a similar " scale and scope” of procedure. For instance, Soft drink and Coca Cola have developed a strategy and infrastructure that means it is hard pertaining to regional vendors to detailed with them. However , there are many little producers that try to gain access to the market with low price and differentiation strategies, but these businesses do not have the scale and scope of the huge bottled water production companies (Pepsi, Coca Cola, Nestle Seas, and Group Danone).

2 . How is the bottled water sector changing? Exactly what the actual drivers of change and how might individuals driving causes individually or perhaps collectively change competition on the market? Bottled water suppliers have consolidated over the past couple of years and the around the world leaders are Pepsi, Coca Cola, Nestle Waters, and Group Danone. The industry is showing all the symptoms that it is reaching the stage of maturity as the market features consolidated and strategy is targeted on decreasing the price and increasing business. The entrance of CocaCola and Pepsi in the bottled water market greatly increased competition and forced smaller sellers out from the business. Beginners and existing bottlers below $1 billion in revenue will be competing against high cost advertising, strong division channels, and massive amounts of capital intensive facilities. The top four producers curently have market share and may typically conquer newcomers in cost. Pepsi, Cocaina Cola, Nestle Waters, and Group Danone have client mass marketplace strategies, their own bottling establishments with normal water sources, along with successful distribution devices from their existing food and beverage business. Bottled water is actually a line extension for the very best four makers versus additional producers' ought to buy/lease normal water and bottling facilities. Huge bottlers as well gain competitive advantage with suppliers by negotiating huge purchase order volumes. For example , the price tag on PET bottles varies drastically by purchase quantities. The present driving force with the market is the customer and their selection of beverage. Refreshment companies differ and offer numerous drinks coming from soft drinks, state of mind, beer, wine beverages, or milk, instead of water in bottles. Substitution of beverage types is the main competition, so charges and producing a wide-range of choices to advance through an existing distribution channel is important. Long term success will come from providing a variety of refreshment choices and not merely being a water in bottles company.

several. What essential factors decide the success of water in bottles producers? Merchandise positioning and packaging style are essential factors and shops aim to place the leading manufacturer that the client prefers. Setting on the...



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