Table of Contents
Introduction
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- Definition
- Methodology
- Abbreviations
Executive Summary
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- A polarised market poses uncertainties
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- Figure 1: Best- and worst-case forecast of China retail sales of bottled water, by value, 2009-19
- Figure 2: Best- and worst-case forecast of China retail sales of bottled water, by volume, 2009-19
- Market drivers
- The overhaul of the existing regulatory system
- The development of high-quality water sources
- The quality scandal and its impact
- Luxury, necessity or both?
- Reduced cost of packaging provides breathing space for many brands
- The consumer
- Still, unflavoured water dominates the market
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- Figure 3: Penetration of different types of bottled water products, November 2014
- Health concerns over the added flavour pose the main barrier
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- Figure 4: Reasons for not drinking flavoured water, November 2014
- Consumers are more likely to trade up for out-of-home occasions
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- Figure 5: Change in bottled water consumption behaviour – in home and out of home, November 2014
- At home is the least popular occasion for drinking bottled water
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- Figure 6: Bottled water drinking occasions, November 2014
- Environmentally friendly claims gaining momentum in the premium segment
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- Figure 7: Attributes associated with premium bottled water, November 2014
- Bottled water maintains its unique competitive advantages
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- Figure 8: Correspondence analysis, November 2014
- What we think
Issues and Insights
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- Are at-home occasions the growth engine for bottled water in the future?
- Facts
- Implications
- How to appeal to young female consumers aged 20-24?
- Facts
- Implications
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- Figure 9: Percentage point differences of the penetration of bottled water when relaxing out of home, by age, November 2014
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- Figure 10: Penetration of flavoured still water, by age and gender, November 2014
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- Figure 11: Selected attributes associated with bottled water, by age, November 2014
- Is it still too early to premiumise bottled water products using ethical claims?
- Facts
- Implications
Trend Applications
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- Factory Fear
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- Figure 12: Label of Triple-X vitamin drink from Coca-Cola, Q4 2014
- Slow It All Down
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- Figure 13: Aromatic sparkling water launched by Pokka Sapporo in Japan, Q2 2014
- Objectify
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- Figure 14: Water Air bottles water product, February 2015
Market Drivers
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- Key points
- The overhaul of the existing regulatory system
- The development of high-quality water sources
- The quality scandal and its impact
- Luxury, necessity or both?
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- Figure 15: Urban households’ disposable income, 2005-13
- Reduced cost of packaging provides breathing space for many brands
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- Figure 16: Crude oil monthly average prices in RMB, January 2010-November 2014
Market Size and Forecast
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- Key points
- Polarised market poses uncertainties
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- Figure 17: Value and volume retail sales for bottled water in China, 2009-19
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- Figure 18: Best- and worst-case forecast of China retail sales of bottled water, by value, 2009-19
- Figure 19: Best- and worst-case forecast of China retail sales of bottled water, by volume, 2009-19
- Forecast Methodology
Market Share
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- Key points
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- Figure 20: Market share of bottled water market in China, by value, 2012-14
- Figure 21: Market share of bottled water market in China, by volume, 2012-14
Who’s Innovating?
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- Key points
- Lung-cleansing drinks in the PM2.5 era
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- Figure 22: Loquat drinks launched in China, 2014
- Figure 23: Mung bean water launched by Youyang in China, Q4 2013
- Juice, but lighter; water but sweeter
- Natural claims reaching their roof
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- Figure 24: The ingredient claims of new product launches in China, 2012-14
- Figure 25: Bamboo charcoal water launched by Jingshantang in China, Q3 2014
- Bottled water with fortified vitamins is on the rise…
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- Figure 26: Product claims of new product launches in the bottled water market in China, 2012-14
- Figure 27: Glacéau Vitaminwater product launched by Coca-Cola, Q3 2014
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- Figure 28: Suntory Life Partner launched in Japan, Q1 2014
- …ethical claims show slow but steady growth
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- Figure 29: Lemon and clear water included in Japan, Q2 2014
- Glass is the rising star in packaging material
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- Figure 30: Packaging material used in new products, 2010-14
- Making online the sole retail channel
Brands and Companies
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- Master Kong
- Wahaha Group
- Challenges in 2014
- New products
- Nongfu Spring Co. Ltd
- China Resources Enterprise
- Jiangxi Runtian Beverage Co. Ltd.
The Consumer – Penetration of Different Types of Bottled Water
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- Key points
- Still, unflavoured water dominates the market
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- Figure 31: Penetration of different types of bottled water, November 2014
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- Figure 32: Penetration of different types of bottled water products, November 2014
- Consumers from tier one cities are trading up
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- Figure 33: Penetration of selected types of bottled water, by city tier, November 2014
- Residents in Chengdu enjoy flavoured water more than others
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- Figure 34: Penetration of flavoured bottled water in Chengdu, November 2014
- Cross-selling sparkling water with premium still products shows potential
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- Figure 35: Penetration of bottled water products, by type of bottled water users, November 2014
- Female consumers aged 20-24 are more likely to drink flavoured still water
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- Figure 36: Penetration of flavoured still water, by age and gender, November 2014
- Sparkling water’s triumph of at-home occasions
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- Figure 37: Penetration of sparkling water, by occasions, November 2014
The Consumer – Reasons Not to Drink Flavoured Water
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- Key points
- Health and efficacy of thirst-quenching pose the main barriers
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- Figure 38: Reasons for not drinking flavoured water, November 2014
- Lighter flavoured water shows potential to attract more female consumers…
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- Figure 39: Agreement with the statement “I prefer drinking water that is not thirst-quenching”, by age and gender, November 2014
- …functionality is important to convert male non-drinkers
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- Figure 40: Agreement with the statement “It’s useless to add flavours only without other benefits”, by gender, November 2014
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- Figure 41: Triple-X Vitamin water launched by Coca-Cola, Q4 2014
- The premiumisation route for flavoured water
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- Figure 42: Selected reasons for not drinking flavoured water, by usage of premium bottled water, November 2014
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- Figure 43: Sicilian Lemon & Crushed Mint Flavoured Water launched in Japan, Q3 2013
The Consumer – Change of Consumption Behaviour
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- Key points
- Consumers are more likely trade up at out-of-home occasions
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- Figure 44: Change of bottled water consumption behaviour – in home and out of home, November 2014
- Female consumers aged 20-24 are reducing their spending and drinking frequency in at-home occasions
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- Figure 45: Change of bottled water consumption behaviour, by age and gender, November 2014
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- Figure 46: Advert by Nestlé in 2014
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- Figure 47: The rose water flavoured bottled water product launched in China, Q4 2014
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- Figure 48: Daily-C Vitamin Water product launched by Lotte in South Korean, Q2 2013
- Having children encourages consumption of bottled water at home
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- Figure 49: Change of bottled water consumption at home, by presence of children in the household, November 2014
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- Figure 50: Advert of the pure life bottled water product from Nestlé in China, 2014
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- Figure 51: Mom & Baby Premium Alkaline Water launched in South Korea, Q4 2013
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- Figure 52: Natural water for baby launched by Qomolangma Glacier in China, Q2 2014
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- Figure 53: Retail channels, by presence of children in household, December 2013*
- Chengdu shows the potential to a key growth engine for at-home occasions
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- Figure 54: Bottled water consumption index, by selected cities, November 2014*
- The alarming sign of shrinking demand from tier two and tier three cities
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- Figure 55: The change of drinking frequency when drinking bottled water out of home, by city tier, November 2014
The Consumer – Drinking Occasions
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- Key points
- At home is the least popular occasion for drinking bottled water
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- Figure 56: Bottled water drinking occasions, November 2014
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- Figure 57: Bottled water drinking occasions, November 2014
- Young women aged 20-24 enjoy bottled water when relaxing out of home
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- Figure 58: Consumption of bottled water when ‘relaxing out of home’, by gender and age, November 2014
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- Figure 59: Percentage point differences of consumption penetration of bottled water, by age, November 2014
- Young consumers are more likely to drink bottled water when socialising with friends
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- Figure 60: Penetration index* of drinking bottled water when socialising with friends, by age, November 2014
- Eating out occasion shows a skew towards lower tier cities
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- Figure 61: Penetration of bottled water when eating out, by city tier, November 2014
- At home – the go-to occasion for premiumisation
- Sparkling water drinkers enjoys higher penetration in at-home occasions
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- Figure 62: Penetration of drinking bottled water at home, by type of bottled water, November 2014
- Consumers are more likely to drink premium bottled water at home
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- Figure 63: Drinking occasions, by types of bottled water, November 2014
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- Figure 64: The rose water flavoured bottled water product launched in China, Q4 2014
The Consumer – Attributes Associated with Premium Bottled Water
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- Key points
- Purified water has limited potential in the high-end segment
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- Figure 65: Attributes associated with premium bottled water, November 2014
- Environmentally friendly claims gaining momentum in the premium segment
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- Figure 66: Lemon and clear water included in Japan, Q2 2014
- Using all-natural ingredients to give flavoured bottled water a premium image
- Imported bottled water products give brands limited leverage
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- Figure 67: Imported bottled water section in a local supermarket, Shanghai China, February 2015
- Men care more about the brand on the bottle
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- Figure 68: Selected attributes associated with premium bottled water, by gender, November 2014
- Environmentally friendly products appeal to young female consumers aged 20-24
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- Figure 69: Agreement with environmentally friendly being an attribute of premium bottled water, by gender and age, November 2014
- High-end packaging works better for young consumers aged 20-24
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- Figure 70: Agreement with high-end packaging being an attribute of premium bottled water, November 2014
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- Figure 71: Water Air bottles water product, February 2015
The Consumer – Attitudes towards Different Types of Non-Alcoholic Drinks
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- Key points
- Bottled water maintains its unique competitive advantages
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- Figure 72: Correspondence analysis, November 2014
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- Figure 73: Attributes associated with different types of non-alcoholic drinks, November 2014
- Consumers aged 20-24 are less likely to consider bottled water as premium and refreshing
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- Figure 74: Selected attributes associated with bottled water, by age, November 2014
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