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.

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