Bottle Water

Topics: Bottled water, Aquafina, Competition Pages: 2 (681 words) Published: April 24, 2008
Competition in the Bottle Water Industry

From 1996 to 2001 the bottle water industry worldwide sales went from 21 billion gallons to 32 billion gallons, with an annual growth rate average of 8.7%. The world’s largest market for bottled water, the United States attributes their 9.2% annual growth rate to consumer’s concerns regarding the purity of tap water, and a more health conscious society. The convenience and portability of bottle water made it a perfect match for the active lifestyles of American consumers. The top competitors in both the U.S. and global market include Nestle Waters, Groupe Danone, Coca-Cola, and PepsiCo. The competition in the bottle water industry is intense. The driving forces of the bottle water industry are causing competitors to merge with one another, develop new product variations, and enhance production and distribution channels. PART 1. DRIVING FORCES

The growing assumption that we will no longer see the growth rates increase, as we have in the late 1990s and early 2000s is causing price competition. The slowdown in the rate is also causing the industry to become unattractive for smaller competitors. The smaller regional competitors have begun merging with larger competitors. Another attempt companies are making is differentiation. A pricing survey reported the strong price competition in the industry caused retail prices to decrease by 3.4 percent from July 2001 to July 2002. The pricing survey also reported some brands to decrease as much as 9 percent. Some of this price decline can be attributed to the introduction to the multipacks of bottle water. The consumer’s demand for the packaging of the bottle water is changing. The demand for bulk water sold in 1 galloon or more containers is decreasing while the demand for water sold in one-liter or less is increasing. Nestle Waters started acquiring smaller regional companies in 2000 with Aberfoyle Springs and then in 2001 they acquired Black Mountain and Aqua Cool....
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