Indonesia Bottled Water Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Indonesian bottled water market is projected to record a CAGR of 16.15% during the forecast period.

Changing customer preferences and growing demand for clean and safe drinking water aid the exponential growth of the bottled water market in Indonesia. Rising disposable income in the country is driving the market, thus enabling higher sales revenue for the market players. Increasing demand from the rising population and inefficient water supply management in certain countries are driving the market. The consumer shift to vitamin and mineral fortified sparkling water is expected to boost the growth of the sparkling water segment of the market studied.

Falling bottled water sales during COVID-19 lockdowns impacted Danone's quarterly sales. Danone, the world's largest bottled water firm, reported an 8.7% drop in first-half recurring operating income to USD 2.00 billion on a like-for-like basis. Danone's Aqua, a popular mineral water brand in Indonesia, has seen its sales fall, affecting the Indonesian mineral water industry.

The rising trend for healthy lifestyles and wide utilization of bottled water for activities, such as trekking and other sports activities, are the major factors responsible for the high demand for bottled water. Moreover, the increasing demand for eco-friendly packaging of bottled water is creating lucrative market opportunities for the existing manufacturers and new entrants in the market studied.

Indonesia Bottled Water Market Trends

Lack of Safe Drinking Water Propels the Market

Lack of access to safe water sources globally is a leading risk factor for numerous infectious diseases, including cholera, diarrhea, dysentery, hepatitis A, typhoid, and polio. Most of the urban population in countries like India, Morocco, Ethiopia, DRC, and Indonesia are concerned about the quality of tap water, especially regarding the taste and consistency. This resulted in the demand for bottled water in developing countries. Growing consumer awareness of health and wellness has led to the demand for bottled water, as it continues to rise in line with the increasing consumer demand, wherein a significant proportion of the demand is generated. The increased health awareness has helped position bottled water as an alternative not only to tap water but, perhaps most importantly, as an alternative to carbonated soft drinks (CSDs) and juice drinks in the multiple beverage marketplace.

Flavored Water is the Fastest Growing Segment

The flavored water segment of the market studied experiences major competition from substitute drinks. The calorie balance and the amount of sugar present in the water are the challenging factors that have an impact on the market. The market has a great potential for growth due to additional flavors, and consumers perceive that additional fruit extracts would improve the nutritional benefits. With the increase in market penetration, the key players also tend to come up with a new combination of flavors, such as kiwi, lemon, raspberry, and strawberry.

Indonesia Bottled Water Market Competitor Analysis

The Indonesian bottled water market is a fragmented one. Danone has a prominent market share in the nation, followed by other international players, like Coco-Cola and Nestle. Several new players are entering the market and are able to capture the market at a very fast pace, owing to the increasing demand for bottled water. The most common trend in the nation is that foreign companies are either joining or acquiring local companies, which already have a share in the bottled water market. For example, the Danone Group acquired Aqua, and Coco-Cola acquired Ades Bottled Water.

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