Analyst Q&A: Zenith Global

Analyst Q&A: Zenith Global

Karen Wells, Managing Consultant at Zenith Global, is our expert for this week’s Analyst Q&A as we look in-depth at the bottled water industry. Zenith has analysed the evolution of the bottled water industry for more than 25 years, making its knowledge and expertise unrivalled.

Its wide range of reports provide the latest industry figures, as well as tracking current and future developments, opportunities and challenges. Additionally, Zenith’s consultancy services offer tailored support for those within or seeking to enter the industry.

Karen covers everything from the rapid growth of water coolers to developments in flavoured-functional water.

Q. How has the global water coolers market developed over the past ten years? How will it develop during the coming decade?

Over the course of our research into watercoolers during the past 25 years, we have seen the industry evolve in different ways within different regions.

If we look at Western Europe, for example, rapid growth was seen as the industry took off in the 1990s. It continued to develop well during the first half of the 2000s. However, with many bottled coolers being placed in commercial and industrial settings, the economic downturn towards the end of that decade caused machine placements and water sold through these units to stagnate or decline in a number of markets. Since 2011, the overall number of bottled and Point of Use (POU) coolers has been increasing, echoing some recovery in the overall economic situation.

The market also struggled in North America during the latter half of the 2000s, but has since returned to growth along with Western Europe. The introduction and rapid rise of Point of Use coolers in many markets means that the bottled cooler industry has struggled to retain customers, because the longer term price benefits of POU have caused customers to switch.

Many of the less mature cooler markets of Eastern Europe continue to develop well, although political and economical challenges in some countries have led to a slowdown more recently.

Q. What effect is the global bottle industry having on the environment? What technologies are manufacturers using to ensure their products are environmentally friendly?

Bottled water, in fact, has the lowest carbon footprint of all beverages, because it has no ingredients, requires less packaging material and is distributed locally in most cases. Bottles have progressively become lighter in weight, as have caps and labels. Many bottles now include recycled or plant based content, sometimes both, and recycling is higher than for lots of other products.

Q. What challenges do water producers face in 2017? How is climate change impacting the various markets (water cooler, bottled water etc.)?

The biggest challenge is that good quality water availability is not always where the world’s growing population wants to live. Water is not properly priced or valued, so much of it is wasted and polluted. Bottled water companies tend to be the best stewards of water, which needs great care.

The market is growing because consumers are generally seeking healthier and more convenient hydration, but more erratic weather conditions impose greater volatility in demand.

To some extent, water is a commodity, so branding is an extra challenge. But water companies do have many points of differentiation with a wide range of stories to tell, especially about heritage and authenticity.

Q. What advances has the flavoured-functional water market seen over the past five years? What further innovations should we expect by 2020?

We have seen huge developments in terms of the range and number of functional beverages available in many markets, particularly those in North America and Western Europe. This has led to an innovative but crowded marketplace, offering consumers a wide choice. The lines between flavoured functional waters and other functional beverages become ever increasingly blurred. We have seen functionality extend through the use of numerous ingredients, from vitamins and minerals, to herbs and botanicals.

Flavours have also become more ‘exotic’, with products containing superfruits or blends of multiple flavours. The trend is towards using naturally-sourced ingredients in a product’s positioning. We expect a continuing move away from artificial sweeteners, especially in North America and Western Europe, and we may start to see more natural sugars such as agave syrup or monk fruit as well as unsweetened beverages.


Bottled water is one of the most profitable businesses in the beverage industry, and its consumption is growing rapidly. The increased prevalence of waterborne diseases and scarcity of tap water in many countries creates a high demand for bottled water. As a result, we’re seeing developing countries become favorable destinations for multinational bottled water manufacturers.

We’d like to take this opportunity to thank Karen for sharing her expertise with us.

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About the interviewee:

Karen Wells is an experienced Managing Consultant with responsibility for bespoke assignments in key markets throughout the world. These include water and soft drinks market opportunity assessments, route-to-market and channel distribution analysis, as well as new product development and M&A studies worldwide.

(Image Credit - Steven Depolo)

Published by Research and Markets


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