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Bottled Water - China - March 2014

Published By :

Mintel

Published Date : Mar 2014

Category :

Bottled Water

No. of Pages : 173 Pages

Pure sourcing is key to attracting bottled water consumers, which has created intense competition between manufacturers for acquiring water sources and has even led to merger and acquisition activity. Wide availability in both the on-trade and off-trade, as well as the introduction of smaller pack sizes, is encouraging impulse purchases and on-the-go consumption.
Table of Content

Introduction

Report structure
Definition
Methodology
Abbreviations

Executive Summary

The market
Figure 1: Volume sales of bottled water in China (bn litres), 2008-18
Companies and brands
Figure 2: Leading bottled water companies, % market share, 2013
The consumer
Frequency of drinking different types of packaged drinks
Figure 3: Frequency of drinking each type of soft drink, December 2013
Figure 4: Repertoire of frequency of drinking different types of packaged drinks, December 2013
Different types of bottled water drunk
Figure 5: Different types of bottled water drunk, December 2013
Occasions for drinking bottled water
Figure 6: Occasions for drinking bottled water, December 2013
Locations for purchasing bottled water
Top factors for purchasing bottled water
Figure 7: Top factors for purchasing bottled water, December 2013
Opinions and attitudes towards bottled water
Key issues
Water sourcing is key to attracting consumers
Accessible products and smaller packs will attract impulsive, on-the-go consumers
Heated bottles and food pairings can boost sales
Health benefits of water can engage the health-conscious population
What we think

The Market

Key points
Market size
Figure 8: Growth trends in China’s bottled water market, volume (bn litres) and value (RMB bn), 2008-13
Bottled water leads volume sales, but is only third by value in soft drinks
Figure 9: Volume (bn litres) and value (RMB bn) retail sales of soft drinks, China, 2013
NPD activity declines compared to other soft drinks
Figure 10: NPD activity in the soft drinks market, by category, 2009-13, China
Market forecast
Figure 11: Value retail sales of bottled water in China (RMB bn), 2008-18
Figure 12: Total bottled water volumes in China (bn litres), 2008-18
Figure 13: Volume retail sales of bottled water in China (bn litres), 2008-18
Figure 14: Volume non-retail sales of bottled water in China (bn litres), 2008-18
Market segmentation
Non-retail sales outpace retail sector
Figure 15: Volume sales of bottled water in China, by retail and non-retail (bn litres), 2008-13
Market drivers
Demand for bottled water rises as safety of boiled tap water questioned
Plasticizer scandal causes shift to bottled water
Increasing outdoor activities lead to improved bottled water demand
Bottled water benefits from increasingly health-conscious population
Rising disposable incomes and discretionary spending encourages premiumisation
Affordability keeps bottled water competitive
Figure 16: Average price per litre, by beverage category, China, 2013
Market barriers
Competition with boiled tap water and home water purifiers
A lack of variety turns off consumers
Figure 17: Typical bottled display water in a supermarket
Northern China sees weaker sales due to long cold season
Lack of heated bottled waters lowers sales during winter

Companies and Brands

Key points
Top five brands account for half of the market
Figure 18: Leading bottled water companies, % market share, 2013
Master Kong
Wahaha
Nongfu Spring
Figure 19: Nongfu bottled water products in various pack sizes under the advertising slogan “Nongfu Spring is a little sweet”.
C’est Bon
Jiangxi Runtian Beverage Company Limited
Figure 20: Three brands of bottled water from Runtian, in varying sizes: Cuitianran mineral bottled water, Runtian purified bottled water and Shennongjia mineral bottled water

The Consumer – Frequency of Drinking Different Types of Packaged Drinks

Key points
Frequency of drinking different types of packaged drinks
Figure 21: Frequency of drinking different types of packaged drinks, December 2013
Bottled water is the most frequently consumed packaged drink
The core consumers of bottled water and other packaged drinks
Bottled water
Other packaged drinks
Repertoire of drinking different types of packaged drinks
Figure 22: Different types of packaged drinks drunk, by repertoire of packaged drinks drunk, December 2013
Rising incomes result in a broader repertoire of packaged drinks

The Consumer – Different Types of Bottled Water Drunk

Key points
Different types of bottled water drunk in past 6 months
Figure 23: Different types of bottled water drunk, December 2013
Still and unflavoured waters dominate
Sparkling and flavoured waters are considered more functional, indulgent and reviving
Figure 24: Occasions for drinking bottled water, by different types of bottled water drunk, December 2013

The Consumer – Occasions for Drinking Bottled Water

Key points
Occasions for drinking bottled water in past 6 months
Figure 25: Occasions for drinking bottled water, December 2013
Bottled water is drunk most often outdoors
Bottled water is seen as a good thirst quencher
Indoors consumption of bottled water is low

The Consumer – Locations for Purchasing Bottled Water

Key points
Retail channels for purchasing drinking bottled water in past 6 months
Figure 26: Locations for purchasing bottled water, December 2013
Supermarkets are the most common outlet
Retail channels benefit from wide presence and competitive prices
Different demographics embrace different retail channels
Food service has potential as Chinese increasingly eat out
Higher income consumers dominate foodservice purchases
Repertoire of bottled water purchase locations
Figure 27: Repertoire of locations for purchasing bottled water
Older consumers are more conservative shoppers, while the young are impulsive

The Consumer – Top Factors for Purchasing Bottled Water

Key points
Top factors for purchasing bottled water
Figure 28: Top factors for purchasing bottled water, December 2013
Good water standards are essential, but other factors can also attract consumers
Figure 29: Top factors for purchasing bottled water, by income, December 2013
Figure 30: Top factors for purchasing bottled water, by age, December 2013

The Consumer – Opinions and Attitudes Towards Bottled Water

Key points
Agreement towards statements regarding bottled water
Figure 31: Agreement with bottled water statements, December 2013
Tier one consumers more aware of health benefits
Four-in-five believe higher quality water is worth paying more for
Channels and convenience
Mixed opinions on water safety
Trust in foreign brands shows the need for branding and quality control
Occasion-positioned water could boost appeal

Key Issue – Good Water Source is Key to Attracting Consumers

Key points
Water pollution raises safety fears for drinking boiled tap water
Good water standards are top motivation when purchasing bottled water
The core consumers for high water quality and good water source
Taiwan plasticizers scandal benefits bottled water
Core demographics believe bottled water is safer than other soft drinks
Emphasising quality will widen bottled water appeal
Core consumers willing to pay more for high quality bottled water
Brands compete for good water sources
Water quality and source drive premium bottled water sales
Figure 32: Chinese premium bottled water brands, 2011-12
Figure 33: Examples of top bottled water brands in China and their water sources
Figure 34: Nongfu and ganten sell bottled waters through water sources
What does it mean?

Key Issue – Product Accessibility and Smaller Packs Will Attract Impulse and On-the-go Consumers

Key points
Convenience is key to attracting impulse and on-the-go consumers
Core consumer groups for convenience
Outdoors availability and an emphasis on product functionality could boost uptake
Targeting top locations for on-the-go consumers
Hot spots include travel hubs, tourist destinations, leisure places, offices, schools, eateries and exercise venues
Bottled water has potential in premium clubs
Smaller bottled waters will appeal to on-the-go consumers, particularly women
Smaller pack sizes NPD is not enough
Figure 35: NPD activity in bottled water market in China, by 10 most popular bottle sizes, 2009-13
Smaller bottled waters are increasing, but lag behind other soft drinks
Figure 36: NPD activity in fruit juice, RTD tea, bottled water and CSD in China, 2009-13
What does it mean?

Key Issue – Heated Bottled Water and Food Pairings Can Boost Sales

Key points
Consumers want bottled water at appropriate temperatures and in meal deals
Female, married, high earners desire meal deals and appropriate temperatures
Chilled and heated bottled waters could boost consumption
Improving existing ambient and chilled options in the market
Lack of heated bottled waters in the market
Figure 37: Heated display unit in a convenience store in Shanghai
Figure 38: Metal aluminium can and bottle in Portugal and Japan, 2013
Bottled water could explore indulgent food pairings
Fast food growth increases on-trade potential
Food pairings are lacking in the off-trade
Healthier bottled water can pair with indulgent snacks
What does it mean?

Key Issue – Highlighting Health Benefits of Water can Penetrate Health-conscious Population

Key points
Healthy claims will appeal to increasingly health-conscious Chinese
Bottled water can position itself as a tool against obesity
Bottled water can better target exercise occasions
Figure 39: Kang Ba Er’s Soda Water
Bottled water claims are often overlooked
Figure 40: Product launches in the Chinese bottled water market, % share by selected claims, 2009-13
What does it mean?

Appendix – The Consumer – Frequency of Drinking Different Types of Packaged Drinks

Figure 41: Frequency of drinking different types of packaged drinks, December 2013
Figure 42: Frequency of drinking different types of packaged drinks, December 2013 (continued)
Figure 43: Most popular frequency of drinking different types of packaged drinks – Bottled water, by demographics, December 2013
Figure 44: Next most popular frequency of drinking different types of packaged drinks – Bottled water, by demographics, December 2013
Figure 45: Most popular frequency of drinking different types of packaged drinks – Carbonated soft drinks, by demographics, December 2013
Figure 46: Next most popular frequency of drinking different types of packaged drinks – Carbonated soft drinks, by demographics, December 2013
Figure 47: Most popular frequency of drinking different types of packaged drinks – Sports/energy drinks, by demographics, December 2013
Figure 48: Next most popular frequency of drinking different types of packaged drinks – Sports/energy drinks, by demographics, December 2013
Figure 49: Most popular frequency of drinking different types of packaged drinks – Ready-to-drink tea, by demographics, December 2013
Figure 50: Next most popular frequency of drinking different types of packaged drinks – Ready-to-drink tea, by demographics, December 2013
Figure 51: Most popular frequency of drinking different types of packaged drinks – Juice, by demographics, December 2013
Figure 52: Next most popular frequency of drinking different types of packaged drinks – Juice, by demographics, December 2013
Figure 53: Most popular frequency of drinking different types of packaged drinks – Ready-to-drink coffee, by demographics, December 2013
Figure 54: Next most popular frequency of drinking different types of packaged drinks – Ready-to-drink coffee, by demographics, December 2013
Figure 55: Most popular frequency of drinking different types of packaged drinks – Plant protein drinks, by demographics, December 2013
Figure 56: Next most popular frequency of drinking different types of packaged drinks – Plant protein drinks, by demographics, December 2013
Repertoire analysis
Figure 57: Repertoire of frequency of drinking different types of packaged drinks, December 2013
Figure 58: Repertoire of frequency of drinking different types of packaged drinks, by demographics, December 2013
Figure 59: Frequency of drinking different types of packaged drinks, by repertoire, December 2013

Appendix – The Consumer – Different Types of Bottled Water Drunk

Figure 60: Different types of bottled water drunk, December 2013
Figure 61: Different types of bottled water drunk, by demographics, December 2013
Figure 62: Occasions of drinking bottled water, by different types of bottled water drunk, December 2013
Figure 63: Top factors for purchasing bottled water, by different types of bottled water drunk, December 2013

Appendix – The Consumer – Occasions for Drinking Bottled Water

Figure 64: Occasions for drinking bottled water, December 2013
Figure 65: Most popular occasions for drinking bottled water, by demographics, December 2013
Figure 66: Next most popular occasions for drinking bottled water, by demographics, December 2013
Figure 67: Other occasions for drinking bottled water, by demographics, December 2013
Figure 68: Locations for purchasing bottled water, by most popular occasions for drinking bottled water, December 2013
Figure 69: Locations for purchasing bottled water, by next most popular occasions for drinking bottled water, December 2013
Repertoire analysis
Figure 70: Repertoire of occasions for drinking bottled water, December 2013
Figure 71: Repertoire of occasions for drinking bottled water, by demographics, December 2013
Figure 72: Occasions of drinking bottled water, by repertoire of occasions of drinking bottled water, December 2013

Appendix – The Consumer – Locations for Purchasing Bottled Water

Figure 73: Locations for purchasing bottled water, December 2013
Figure 74: Most popular locations for purchasing bottled water, by demographics, December 2013
Figure 75: Next most popular locations for purchasing bottled water, by demographics, December 2013
Figure 76: Other locations for purchasing bottled water, by demographics, December 2013
Figure 77: Locations for purchasing bottled water, by different types of bottled water drunk, December 2013
Figure 78: Locations for purchasing bottled water, by most popular factors for purchasing bottled water, December 2013
Figure 79: Locations for purchasing bottled water, by next most popular factors for purchasing bottled water, December 2013
Repertoire analysis
Figure 80: Repertoire of locations for purchasing bottled water, December 2013
Figure 81: Repertoire of locations for purchasing bottled water, by demographics, December 2013
Figure 82: Locations of purchasing bottled water, by repertoire of locations of purchasing bottled water, December 2013

Appendix – The Consumer – Top Factors for Purchasing Bottled Water

Figure 83: Top factors for purchasing bottled water, December 2013
Figure 84: Most popular factors for purchasing bottled water, by demographics, December 2013
Figure 85: Next most popular factors for purchasing bottled water, by demographics, December 2013
Figure 86: Top factors for purchasing bottled water, by most popular occasions for drinking bottled water, December 2013
Figure 87: Top factors for purchasing bottled water, by next most popular occasions for drinking bottled water, December 2013

Appendix – The Consumer – Opinions and Attitudes Towards Bottled Water

Figure 88: Agreement with bottled water statements, December 2013
Figure 89: Agreement with the statement ‘Bottled water of higher quality is worth paying more for’, by demographics, December 2013
Figure 90: Agreement with the statement ‘Bottled water is a healthier alternative to soft drinks’, by demographics, December 2013
Figure 91: Agreement with the statement ‘Bottled water with added ingredients provides more health benefits than standard bottled water’, by demographics, December 2013
Figure 92: Agreement with the statement ‘Bottled water is more hydrating than other drinks’, by demographics, December 2013
Figure 93: Agreement with the statement ‘The water quality of international bottled water brands are more reliable than Chinese brands’, by demographics, December 2013
Figure 94: Agreement with the statement ‘Bottled water is safer to drink than soft drinks’, by demographics, December 2013
Figure 95: Agreement with the statement ‘Boiled tap water is just as safe to drink as bottled water’, by demographics, December 2013
Figure 96: Agreement with the statement ‘I am interested in buying bottled water as a part of a ‘meal deal’’, by demographics, December 2013
Figure 97: Agreement with the statement ‘Bottled water served at an appropriate temperature would encourage me to buy more’, by demographics, December 2013
Figure 98: Agreement with the statement ‘Places that are easier to reach should sell more bottled water’, by demographics, December 2013
Figure 99: Agreement with the statement ‘I would like to see more bottled water designed for various occasions’, by demographics, December 2013
Figure 100: Agreement with the statement ‘There is not a wide range of different pack sizes of bottled water for on-the-go occasions’, by demographics, December 2013
Figure 101: Agreement with bottled water statements, by different types of bottled water drunk, December 2013
Figure 102: Agreement with bottled water statements, by most popular occasions for drinking bottled water, December 2013
Figure 103: Agreement with bottled water statements, by next most popular occasions for drinking bottled water, December 2013
Figure 104: Agreement with bottled water statements, by most popular locations for purchasing bottled water, December 2013
Figure 105: Agreement with bottled water statements, by next most popular locations for purchasing bottled water, December 2013
Figure 106: Agreement with bottled water statements, by most popular factors for purchasing bottled water, December 2013
Figure 107: Agreement with bottled water statements, by next most popular factors for purchasing bottled water, December 2013

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