Friday, 23 August 2013

Pakistan Bottled Water Market

Introduction
The global water shortage of affordable and safe drinking water is manifested in Pakistan with an estimated 44 percent of the population without access to safe drinking water. In rural areas, up to 90 percent of the population may lack such access. As one indication of the magnitude of the problem, it is estimated that 200,000 children in Pakistan die every year due to diarrhoeal diseases alone (UN Systems in Pakistan, 2003). Drinking bottled water reflects not just a certain way of life in the rich North but a necessity and the only option for safe water in the South. Beside official s, there should be no doubt that the majority of the Pakistan's population is exposed to the hazard of drinking unsafe and polluted water. In an effort to improve this situation, many consumers in Pakistan have to turn to bottled water as a first alternative to drinking unfiltered tap water or contaminated water of other sources where no public drinking water service exists (GOP, Pakistan Environment Protection Agency, 2003).

However, bottled water is a very expensive alternative and not always healthy because of infrequent testing for contaminants and sporadic inspection of processing plants. Bottled water should not be considered as a substitute to a sufficient service with drinkable tap water, but it is due to lack of access to water services or to bad quality of available resources (WHO, 2000). Bottled water consumption has been steadily growing in the world for the past 30 years. It is considered as one of the most dynamic sectors of all the food and beverage industry, where consumption in the world increases by an average 12% each year, in spite of its excessively high price compared to tap water (UNESCO, 2003).

Bottled water industry
Bottled water consumption has been steadily growing in the world for the past 30 years. It is the most dynamic sector of all the food and beverage industry: bottled water consumption in the world increases by an average 7% each year, in spite of its excessively high price compared to tap water and although industrialized countries consumers have, in principle, access to cheap good quality tap water.
The bottled water market in Pakistan is witnessing annual growth rates nearing 40 percent during its growth stage. Bottled water in Pakistan is not considered a ‘beverage'. Beverage processing includes carbonated soft drinks - where Pakistan has the lowest per capita consumption in the world, fruit juices, syrups and juice flavored drinks. Drinking water - and also bottled water - is not considered an important commodity either. The Government of Pakistan described the market for bottled water, with 33 million liters of consumption per annum in 1999, as small but growing. It furthermore estimated the consumption for 2003, as 70 million liters or 0.5 liters per capita. The bottled water market in Pakistan has witnessed annual growth rates of 40 percent, and after the introduction of Nestlé's ‘Pure Life', it had the fastest worldwide growth in bottled water in 2000, at 140%. Recent s estimate a yearly consumption of about 2 liters per person bottled water.[1]
The potential markets for bottled / mineral water consist of foreign tourists and foreigners working in Pakistan, hotel industry, patients (bottle water is also used to avoid the possible consumption of contaminated water) and travelers. Moreover, the bottled / mineral water has been emerging as a daily preference of the elite class. A leading mineral water producer told that five years back the market was hardly 25 per cent (27.5 million per liters) of the current level of 1.1 billion liters a year. The mineral water industry of Pakistan grew 15 percent in the last year. The demand upsurge for the bottled water has been powered by urban middle class that aspires to switch to bottled water to avoid water-borne diseases. Besides, use of bottled water has also been treated as status symbol in middle income families that tends to follow the lifestyle of elite in Pakistan.

In our country, there are approximately twenty to thirty companies engaged in this business through out the year. Official figures show an estimated number of 26 corporations, while in summer time, this number increases up to 70. Now there are 73 companies engaged in this business. But from the perspective of quality control, Pakistan Council of Renewal Water Resources is witnessing a fluctuation in the market of 50 percent, e.g. half of the brands disappear and are replaced by new brands every year. Recently, it is told to the Lahore High Court that out of a total of 64 bottled and mineral water manufacturing companies in Punjab, only 10 are working under valid licences.
This is the main reason we are witnessing a mushroom growth of mineral water companies across the country. Though these companies have no facility at their premises to give guarantee of quality mineral water but still people are using water provided by them as these companies supply their products with low rates especially in low income areas. Just few years ago, it was hard to think that drinking water would be sold in open market but diseases like Hepatitis A, B, C and other deadly diseases have surged the prices of mineral water and now a 1.5-litre mineral water bottle is being sold in open market around Rs40 as compared to Rs36 few months back while its price was Rs26 in last April. Many companies do not print the price on small and bigger bottles which allows retailers to charge unilaterally higher prices in areas where demand overtakes supplies whereas in areas of low demand they sometimes offer discounts.
According to the industry sources, the number of bottlers scales up well above 70 during summer season due to increased demand for drinking water. Pakistan’s bottled water market comprises of two main segments i.e. retail market and bulk market. The retail market consists of 0.5 liter, 1.5 liter, 3.1 liter and 5.0 liter capacity PET bottles. The bulk market consists of home and office delivers in 3 and 5 gallon cans.
Recent figures estimate a yearly consumption of about 2 liters per person bottled water. Compared with Thailand’s 43 liters and Philippine’s 15 liters per capita consumption, this seems relatively low. But taking Pakistan’s population into account, one has to estimate an annual consumption of 318 million liters. While again, sufficient figures are not available to prove this 964 percent consumption increase in five years, one is able to conclude that Pakistan is a highly dynamic and lucrative market. Market expectations are as high in the retail market of bottled water as in the household and operations sector for bulk water.





Market share of companies

Companies
Market Share %
Nestle
46
AQUAFINA
29
Kinly
15
Others
8
Springly
2


PAKISTAN BOTTLED WATER
People using bottled water
7 to 8 % 
Annually consumption
1.27 billion liter water
Estimated sales
RS 20 billion
Average Consumption growth
6-8% per year

Bottled water consumption during years
Years
Annual Consumption ( per liter)
2009
842,000,000
2010
943,000,000       
2011
1,100,000,000      
2012
1,276,000,000      

From the table we see that in 2010 the bottled water consumption increases by 12%, in 2011 it increases by 14.5 % and in 2012 it increases by 16%.





Estimated Revenue

Companies
Estimated Revenue (Millions)
Nestle
9.2
Aquafina
5.8
Kinly
3
Others
1.6
Springly
0.4


Pakistan’s biggest consumer markets include:

City
Population
Karachi
15 million
Lahore
9 million
Rawalpindi
3.0 million
Faisalabad
2.6 million
Multan
1.6 million
Gujranwala
1.3 million
Hyderabad
1.2 million
Islamabad
1.1 million
Peshawar
1.3 million








Population and growth:

Year
Population
Growth rate
2008
162.38
-
2009
169.94
4.655746
2010
173.51
2.100741
2011
177.1
2.069045
2012
180.71
2.038396


Year
Urban
Growth rate
Rural
Growth rate
2008
57.32
-
105.06
-
2009
60.87
6.193301
109.07
3.816867
2010
63.05
3.581403
110.46
1.274411
2011
65.28
3.536875
111.82
1.231215
2012
67.55
3.477328
113.16
1.198354


Size of middle class
Middle class growth
Share
70 million
3%
40%


Age structure:

Population of different age groups                          (Millions)
Age
1998
2011-12
2015
2020
2025
2030
00-04
19.59
22.02
22.76
23.28
22.44
20.35
05-09
20.72
20.4
21.33
22.35
22.95
22.18
10-14
17.14
19.94
20.07
21.24
22.28
22.88
15-19
13.73
20.27
20.12
20.01
21.19
22.24
20-24
11.88
17.72
19.8
20.05
19.95
21.14
25-29
9.76
15.25
17.13
19.71
19.98
19.89
30-34
8.24
12.95
14.72
17.04
19.62
19.91
35-39
6.32
10.83
12.4
14.62
16.94
19.53
40-44
5.89
10.9
10.36
12.27
14.49
16.81
45-49
4.68
7.32
8.49
10.2
12.01
14.31
50-54
4.26
6.01
6.88
8.26
9.95
11.84
55-59
2.86
4.83
5.53
6.57
7.93
9.6
60-64
2.72
3.78
4.31
5.13
6.14
7.45
65+
4.64
6.81
7.82
9.39
11.39
13.93
Total
132.43
180.03
191.72
210.12
227.26
242.06

Population of different age group of 2011-12

Age Pop Age category
Population
%age
0-9 years
42.42 million
23.56%
10-24
57.64 million
32%
25-59 years
68.09  million
37.82%
60 -65 years and over
6.81 million
3.78%



Safe and unsafe brands of mineral water
Safe brands
Brand
Chemical
Microbiological
Manufacturer
Hydra
Safe
Safe
islamabad
Freshlay
Safe
Safe
Bahawalnagar
Pineo
Safe
Safe
Bahawalpur
Pan pura
Safe
Safe
BUREWALA
Hamaliya
Safe
Safe
D.I.Khan
Safi mineral water
Safe
Safe
D.I.Khan
Nxt
Safe
Safe
FAISALABAD
Aqua fina
Safe
Safe
FAISALABAD
Springley
Safe
Safe
HATTAR
Murree Sparkletts
Safe
Safe
HATTAR
Nobel
Safe
Safe
HYDERABAD
Valley
Safe
Safe
islamabad
Venora
Safe
Safe
islamabad
Splash Deww
Safe
Safe
islamabad
A-One
Safe
Safe
islamabad
Margalla
Safe
Safe
islamabad
Hydr8
Safe
Safe
islamabad
Water Pack
Safe
Safe
islamabad
Necter
Safe
Safe
islamabad
Aqvina
Safe
Safe
islamabad
Oslo plus
Safe
Safe
KARACHI
Highland spring
Safe
Safe
KARACHI
Miracle
Safe
Safe
KARACHI
Water plus
Safe
Safe
KARACHI
Aqua nasa
Safe
Safe
KARACHI
Fiza mineral
Safe
Safe
KARACHI
Hydra clear
Safe
Safe
KARACHI
Jel
Safe
Safe
KARACHI
Vey
Safe
Safe
KARACHI
Sea
Safe
Safe
KARACHI
Orion
Safe
Safe
KARACHI
Zindagi mineral water
Safe
Safe
KARACHI
Al-Tayyab
Safe
Safe
KARACHI
Liza
Safe
Safe
KARACHI
Snow drop
Safe
Safe
KARACHI
Al-Habib
Safe
Safe
KARACHI
Sufi
Safe
Safe
LAHORE
Gourmet
Safe
Safe
LAHORE
Nestle
Safe
Safe
LAHORE
Kinley
Safe
Safe
LAHORE
Aqua ro7
Safe
Safe
LAHORE
Hydra life
Safe
Safe
LAHORE
Klinz pure
Safe
Safe
LAHORE
Al-Sana
Safe
Safe
LAHORE
Aqua pure
Safe
Safe
LAHORE
Blu water
Safe
Safe
MULTAN
Natural aqwah
Safe
Safe
PESHAWAR
Aqua sure
Safe
Safe
PESHAWAR
Moya mineral
Safe
Safe
PESHAWAR
Khyberaqua
Safe
Safe
PESHAWAR
Berg
Safe
Safe
rawalpindi
Zam Zam
Safe
Safe
rawalpindi
Ripple
Safe
Safe
rawalpindi
Atlantis
Safe
Safe
rawalpindi
IVA pure
Safe
Safe
rawalpindi
Clear
Safe
Safe
SAHIWAL
Vital happy life
Safe
Safe
SAHIWAL
Sparkle water
Safe
Safe
SAHIWAL
Hi-Fresh(Ultra Clean)
Safe
Safe
SARGODHA
Aqua safe
Safe
Safe
Sialkot
Rise water
Safe
Safe
Sialkot
Isberg
Safe
Safe
Sialkot
Vivian
Safe
Safe
Wazirabad

City wise distribution




Bahawalnagar
3
BUREWALA
1
D.I.Khan
2
FAISALABAD
2
HATTAR
2
HYDERABAD
1
islamabad
10
KARACHI
18
LAHORE
15
MULTAN
1
PESHAWAR
4
QUETTA
1
Rawalpindi
5
SAHIWAL
3
SARGODHA
1
Sialkot
4
VEHARI
1
Wazirabad
1




Unsafe Brands

Brand
Chemical
Microbiological
Manufacturer
Premier
Unsafe
Safe
LAHORE
Eco water
Unsafe
Safe
SIALKOT
Kalash pure
Unsafe
Safe
Bahawalpur
Crystal line
Unsafe
Safe
LAHORE
Nation
Unsafe
Safe
LAHORE
Lock
Unsafe
Safe
LAHORE
Aqua national
Unsafe
Safe
LAHORE
Aqua safe
Unsafe
Safe
LAHORE
Classic
Safe
Unsafe
VEHARI
Legend
Safe
Unsafe
KARACHI
Aqua hygienic
Safe
Unsafe
QUETTA
Sprinkle
Unsafe
Safe
KARACHI

















City wise distribution
LAHORE
6
SIALKOT
1
Bahawalpur
1
VEHARI
1
KARACHI
2
QUETTA
1



Production of Items

Beverages
Cigarettes
Textiles
years
(000 doz bottles)
(Million nos)
(000 tonns)
1990-91
67,607
29,887
96.9
1991-92
85,266
29,673
100.9
1992-93
139,823
29,947
97.5
1993-94
113,704
35,895
76.4
1994-95
143,019
32,747
68.5
1995-96
131,114
45,506
70.6
1996-97
115,817
46,101
68.7
1997-98
149,848
48,215
95.4
1998-99
185,014
51,578
85.5
1999-00
2,332
46,976
85.5
2000-01
2,542
58,259
89.4
2001-02
2,492
55,100
81.7
2002-03
2,289
49,365
95.5
2003-04
2,691
55,399
104
2004-05
3,424
61,097
104.8
2005-06
4,620
64,137
104.5
2006-07
6,205
65,980
118.1
2007-08
7,351
67,446
129
2008-09
7,569
75,609
137.4
2009-10
6,017
65,292
106.2
2010-11
1,515,305*
65,403
93.2
Jul-Mar
2011-12p
1,068,526*
45,674
70.4




Conclusion:

Drinking bottled water has become a trivial habit in many people's everyday lives. Bad tap water taste or quality, fitness objectives or safety purposes, numerous reasons lead consumers to buy bottled water. In Pakistan, the core proposition of bottled drinking water lies in hygiene because the quality of tap water is bad and is rapidly deteriorating due to the aging of the water and sewerage pipes. Bottled water may even be necessary, for instance in case of temporary tap water contamination. The trend toward consuming more and more bottled water will keep increasing in the coming years. This flourishing market is profitable for a high number of companies, and employs thousands of people world-wide.
Bottled water quality is generally good, although it can suffer from the same contamination hazards as tap water. In Europe, natural mineral waters quality is frequently tested, both by independent labs and by companies' internal services. These latter controls may not be fully reliable. Yet, it is not in the interest of the companies, who base their marketing strategies on the purity of their products, to hide away occasional and traceable contamination. We need to identify the key service quality dimensions that are specific to the water sector. Some of these are evident from the literature (aesthetic qualities, customer relations responsiveness etc.) but there will be others and these need to be identified.
Increasing urbanization can also explain increased trend for bottled water consumption. In Increasing standards of living and greater use of cars enabled people to buy water in supermarkets and to bring home higher number of bottled water, without difficulty. The use of plastic makes bottles lighter and easier to carry than when they were made of glass. The expansion of shopping centers, outside city-centers, provides consumers with a greater choice in bottled water brands. The explosion of bottled water consumption also reflects deep changes in working habits in industrialized countries, with the decline of the agriculture and industry sectors. Most people have office works and the bottle of water is now a common element on a desk, next to the computer and the telephone. Drinking expensive bottled water (compared to tap water) is a sign of a rise in the social scale. In addition, bottled water is the result of a huge marketing success. The bottled water culture's recent explosion in the last decade is due to many corporations' advertising efforts to promote the need to drink "healthy" bottled water rather than tap water. Multinational companies across the globe are racking in billions of dollars with very little effort. Marketing and advertising are of primary importance to make the difference between brands selling such a similar product, a product that is colorless, (nearly) tasteless and odorless.
Drinking bottled water is essentially a part of our culture today. We can look at any local, national or international sporting event and see the prevalence of bottled water. Apparently regular tap water in a bottle or cup has slowly begun to be looked down upon. Although many individuals will carry a reusable water bottle such as a Nestle, most bottled water containers are thrown away after just one use. This may be due to the convenience of bottled water, as it is almost more readily available than tap water.
Currently there are multiple studies showing numerous bottled water brands containing harmful substances. Many researches show that bottled water has no nutritional advantage over tap water, a large majority of bottled water consumers drink bottled water because they believe it has better health benefits, and many consume such large quantities due to its taste. The research analysis also showed that people mostly rely on brand names and feel comfortable using top brand bottled water. Nestle Pure Life was the consumers foremost choice of bottled water and they consider Nestle as the best option available. Slowly and gradually other brands are also creating awareness in consumers mind such as Pepsi's Aquafina and Coke's Kinley. These brands are already established top brands in the world, but Nestle is the key operator in this market and consumers consider Nestle as their first and favorite choice. It was seen that consumers were unaware of the fact that there is a huge difference between bottled mineral water and bottled pure water, and they consider both of them as same.



[1] http://www.ukdissertations.com/dissertations/marketing/bottled water.php#ixzz32C7nI6TO

6 comments:

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  4. This comment has been removed by the author.

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