Bottled Water Industry
Case Study
3 Nov 2009
Bottled Water Industry
1. What are the strategy-shaping business and economic characteristics of the bottled water industry? What is the industry like?
The global bottled water industry forecast is growing by 30% through 2010 to reach approximately $82 billion in revenue. Bottled water is thought to be safer than municipal tap water and an alternative choice to high calorie carbonated beverages. Focus on fitness, health, and the go-go lifestyle has made the United States’ the largest market for bottled water in the world. The single polyethylene terephthalate (PET) container has satisfied customers with its convenience and portability. The global and U.S. markets are controlled by a few food and beverage companies that sell the top 10 brands.
Table: The Top 10 Bottled Water Brands in the US by wholesale sales in 2007
Dasani (Coca-Cola) ($1.6bn) Aquafina (PepsiCo) ($1.5bn) Poland Spring (Nestle Waters) ($878m) Arrowhead (Nestle Waters) ($586m) Nestle Pure Life (Nestle Waters) ($545m)
Source: Beverage Marketing Corporation
Crystal Geyser (CGWC) ($529m) Deer Park (Nestle Waters) ($500m) Ozarka (Nestle Waters) ($352m) Ice Mountain (Nestle Waters) ($292m ) ZephyrHills (Nestle Waters) ($272m)
There is fierce competition among these producers and they all have a similar “scale and scope” of operation. For instance, Pepsi and Coca Cola have developed a strategy and infrastructure that makes it hard for regional sellers to complete with them. However, there are many small producers that try to access the market with low price and differentiation strategies, but these businesses do not have the scale and scope of the huge bottled water production companies (Pepsi, Coca Cola, Nestle Waters, and Group Danone).
2. How is the bottled water industry changing? What are the underlying drivers of change and how might those driving forces individually or collectively change competition in the industry?
Bottled water suppliers have
3 Nov 2009
Bottled Water Industry
1. What are the strategy-shaping business and economic characteristics of the bottled water industry? What is the industry like?
The global bottled water industry forecast is growing by 30% through 2010 to reach approximately $82 billion in revenue. Bottled water is thought to be safer than municipal tap water and an alternative choice to high calorie carbonated beverages. Focus on fitness, health, and the go-go lifestyle has made the United States’ the largest market for bottled water in the world. The single polyethylene terephthalate (PET) container has satisfied customers with its convenience and portability. The global and U.S. markets are controlled by a few food and beverage companies that sell the top 10 brands.
Table: The Top 10 Bottled Water Brands in the US by wholesale sales in 2007
Dasani (Coca-Cola) ($1.6bn) Aquafina (PepsiCo) ($1.5bn) Poland Spring (Nestle Waters) ($878m) Arrowhead (Nestle Waters) ($586m) Nestle Pure Life (Nestle Waters) ($545m)
Source: Beverage Marketing Corporation
Crystal Geyser (CGWC) ($529m) Deer Park (Nestle Waters) ($500m) Ozarka (Nestle Waters) ($352m) Ice Mountain (Nestle Waters) ($292m ) ZephyrHills (Nestle Waters) ($272m)
There is fierce competition among these producers and they all have a similar “scale and scope” of operation. For instance, Pepsi and Coca Cola have developed a strategy and infrastructure that makes it hard for regional sellers to complete with them. However, there are many small producers that try to access the market with low price and differentiation strategies, but these businesses do not have the scale and scope of the huge bottled water production companies (Pepsi, Coca Cola, Nestle Waters, and Group Danone).
2. How is the bottled water industry changing? What are the underlying drivers of change and how might those driving forces individually or collectively change competition in the industry?
Bottled water suppliers have