Global Premium Water Report + Datasheet 2016

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September 2016

2016 Premium Water Report A review of market performance and country insight

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Copyright All copyright in this document is reserved.

Research Note In undertaking its research for this report, Zenith has utilised its internal data library and global databases, alongside other third party sources and interviews with the industry. Throughout its on-going research, Zenith also depends upon the goodwill and co-operation of operators active in the marketplace, and, as such, seeks to achieve a high level of accuracy.

Liability This document contains information and may contain conclusions and recommendations. Every effort has been made to ensure that the information is accurate and that the opinions expressed are sound. However, Zenith International Ltd cannot be made liable for any errors or omissions or for any losses or consequential losses resulting from decisions based on the information.

Important notice on distribution This report should not be quoted, referred to or transmitted to another party, in whole or in part, with out the prior written consent of Zenith International Ltd. Should you desire to release a copy of this report to another party for information purposes, we request you and the requesting party to indemnify Zenith International from any liability related2to the reportInternational distribution.Ltd Such Š Zenith 2016readers however will not be considered “users� of this report.

Contents

3

1: Methodology and definitions

4

2: Executive summary

9

3: Introduction

12

4: Global trends and developments

14

5: Country focus: China

27

6: Country focus: Germany

38

7: Country focus: Japan

48

8: Country focus: UAE

58

9: Country focus: USA

68

10: Other potential markets

79

11: Premium sub-segmentation

82

12: Industry challenges

88

13: Outlook

90

14: Brand profiles

92

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1: Methodology and definitions

4

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Methodology & definitions Premium water This report covers premium water within the scope of plain packaged water (in pack formats of up to 10 litres).

In order to be able to quantify the premium water segment, Zenith’s analysis of ‘premium’ is based primarily on price and positioning.

Within each individual market, Zenith has determined a ‘cut-off’ point whereby brands are classified as premium if their overall average value per litre stands above the pre-determined cut-off point.

For international brands, Zenith applies its definition primarily based upon a brands’ global average value per litre. Therefore, a brand classified as premium remains so, throughout all markets where it is present. For example, Evian is considered premium in all markets, despite its more mainstream positioning in France. International brands classified as premium throughout this report include Evian, Perrier, San Pellegrino, Vittel and Volvic.

From within its global bottled water database, Zenith has identified a number of key markets where premium is understood to either; a) hold a significant share of the packaged water market, b) be of significant volume in million litre terms, or c) present a growth opportunity with the packaged water market.

Other considerations The methodology used in this report is primarily quantification by overall value per litre. However, it is important to note that price is influenced by many factors including channel distribution, pack format (size and type), origin (imports) and water type.

In some markets, the prevalence of sparkling water impacts the size of the premium segment.

Channel dynamics within the local market also play a factor, as generally packaged water sold through horeca commands a higher value per litre than sales through modern retail outlets.

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Methodology & definitions General definitions Bottled/packaged water: still and sparkling plain water in pack formats up to 10 litres. Excludes bulk water (formats over 10 litre).

Trade Channels Modern trade: mainly organised retail, predominantly supermarkets and hypermarkets (Walmart, Carrefour, Metro, Tesco, Sainsbury’s), but also smaller sub-outlets of multiple grocers (for example, Tesco express, Sainsbury’s local).

Discounters: Includes both hard and soft discounters. For example, Aldi, Lidl, Penny, Netto, Plus, Denner, Dia. Discount retailers usually have basic merchandising (pallets placed directly on the shop floor and limited shelf displays), a limited product range, and often a limited role of manufacturer brands (although this is now changing to some extent, with more Discounters offering a wider range of manufacturer branded goods). Every day low priced goods is the core model in this channel.

Traditional: organised and non-organised retail, generally smaller outlets and traditional (independent) grocers. Includes petrol stations (for example, Shell, BP), and sales through vending machines. Also includes kiosks and street market stalls.

Horeca: Out of Home (On-premise/away-from-home): comprises café’s, bars, takeaways, fast food (McDonald’s etc). HoReCa (Hotels, Restaurants, Catering), institutions (for example, hospitals, schools, government institutions, military). vpl: value per litre (consumer prices) pcc: per capita consumption pce: per capita expenditure CAGR: compound annual growth rate

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2: Executive summary

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Executive summary Premium water  Commentary  Commentary  Commentary

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3: Introduction

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Introduction Research note In undertaking its research for this report, Zenith has utilised its internal data library and global databases, alongside other third party sources. Throughout its ongoing research, Zenith also depends upon the goodwill and co-operation of operators active in the marketplace, and, as such, seeks to achieve a high level of accuracy.

Report content: This report includes a global view of premium water, plus a focus on five key premium water countries. These are Country, Germany, Japan, UAE and USA. Each has been selected due to Zenith’s belief that each one represents an opportunity for premium water. The nature of the five markets is quite different, thus seeking to present a broad range of the dynamics which may exist within a specific premium water market.

Premium water definition: One of the main challenges in compiling this report has been the varying definitions of premium within the industry. This subject is covered in detail in the report, and Zenith’s methodology for quantifying premium water worldwide has been specified.

Liability Whilst every effort has been made to ensure that the information presented in this document is accurate and that the opinions expressed are sound, Zenith International Ltd cannot be made liable for any errors or omissions or for any losses or consequential losses resulting from decisions based on its contents.

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4: Global trends and developments

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Global packaged water Market volume 2011-15 Million litres

Packaged water volume 2011-15

120

100

100

100

100

100

100 80 60

2011

2012

2013

2014

2015

40

Volume (mln litres) 20

% change 0 2011

2012

2013

2014

2015

Per capita consumption (litres)

 Commentary.  Commentary.  Commentary.

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Global packaged water Market value 2011-15

2011

2012

2013

2014

2015

Value (million US$) % change Per capita expenditure (US$)

 Commentary.  Commentary.  Commentary.

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Global packaged water Market value per litre 2011-15

2011

2012

2013

2014

2015

Value per litre (US$) % change

 Commentary.  Commentary.  Commentary.

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Global premium water Market volume 2013-15 Volume % share, 2015 Volume (mln litres)

2013

2014

2015

Premium (mln litres) Rest (mln litres) 50.0%

Total

50.0%

Premium (% share) Premium (% share)

Rest (% share)

Rest (% share)

Total

 Commentary.  Commentary.  Commentary.

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Global premium water Market value 2013-15 Value % share, 2015 Value (mln US$)

2013

2014

2015

Premium (mln US$) Rest (mln US$) 50.0%

Total

50.0%

Premium (% share) Premium (% share)

Rest (% share)

Rest (% share)

Total

 Commentary.  Commentary.  Commentary.

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Global premium water Market value per litre 2013-15 US$ 1.60 1.55 1.50 1.45 1.40 1.35 1.30 1.25 1.20 1.15 1.10 1.05 1.00

Premium water vpl 2013-15

1.25

1.25

1.25

2013

2014

2015

Value per litre (US$) 2013

2014

2015

% change

 Commentary.  Commentary.  Commentary.

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Global premium water Leading countries in 2014-15, volume and market share Country

Volume, mln litres 2014

% volume share 2014

Volume, mln litres 2015

% volume share 2015

Country Country Country Country Country Others Total Premium (million litres)

 Commentary.  Commentary.  Commentary.

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Global premium water Leading brands in 2014-15, volume and market share Company

Brand

Company

Brand

Company

Brand

Company

Brand

Company

Brand

Company

Brand

Others

Others

Volume, mln litres 2014

% volume share 2014

Volume, mln litres 2015

% volume share 2015

Total Premium (million litres)

 Commentary.  Commentary.  Commentary.

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Global premium water Premium water market share

Market Share by region

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%

CAGR (2010-15)

North America

Asia Pacific

West Europe

Africa

East Europe

North America

C & L America

Middle East

Asia Pacific

C & L America

Middle East

East Europe

Africa

West Europe

% Growth

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5: Country focus: China

27

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Country packaged water Market volume 2011-15 Million litres

Packaged water volume 2011-15

120

100

100

100

100

100

100 80 60

2011

2012

2013

2014

2015

40

Volume (mln litres) 20

% change 0 2011

2012



2013

2014

2015

Per capita consumption (litres)

 Commentary.  Commentary.  Commentary.

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zenithinternational specialist consultants to the food and drink industries worldwide

Country packaged water Market value 2011-15 2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

Value (local currency) % change Per capita expenditure (local)

Value (million US$) % change Per capita expenditure (US$)

 Commentary.  Commentary.  Commentary.

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Country packaged water Market value per litre 2011-15

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

Value per litre (local currency) % change

Value per litre (US$) % change

 Commentary.  Commentary.  Commentary.

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Country premium water Segment volume 2013-15 Volume % share, 2015 Volume (mln litres)

2013

2014

2015

Premium (mln litres) Rest (mln litres) 50.0%

Total

50.0%

Premium (% share) Premium (% share)

Rest (% share)

Rest (% share)



Total

 Commentary.  Commentary.  Commentary.

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Country premium water Segment value 2013-15 Value (local currency)

2013

2014

2015

Premium (local currency) Rest (local currency) Total Premium (% share) Rest (% share) Total

 Commentary.  Commentary.  Commentary.

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Country premium water Segment value per litre 2013-15

2013

2014

2015

2013

2014

2015

Value per litre (Yuan) % change

Value per litre (US$) % change

 Commentary.  Commentary.  Commentary.

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zenithinternational specialist consultants to the food and drink industries worldwide

Country premium water Leading brands in 2014-15, volume and market share Company

Brand

Company

Brand

Company

Brand

Company

Brand

Company

Brand

Company

Brand

Others

Others

Volume, mln litres 2014

% volume share 2014

Volume, mln litres 2015

% volume share 2015

Total Premium (million litres)

 Commentary.  Commentary.  Commentary.

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Country premium water Future outlook  Commentary.  Commentary.  Commentary.

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6: Country focus: Germany

38

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7: Country focus: Japan

48

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8: Country focus: UAE

58

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9: Country focus: USA

68

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10: Other potential markets

79

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Other potential markets Country

Commentary

Commentary

Commentary

Commentary

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Commentary

Country

Commentary

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11: Premium sub-segmentation

82

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Premium distribution channels Retail and OOH

 Commentary.  Commentary.  Commentary.

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Premium sub-segmentation Super and ultra premium  Commentary.  Commentary.  Commentary.

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Premium sub-segmentation Super premium water SWOT analysis

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12: Industry challenges

88

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Industry challenges External factors  Commentary  Commentary  Commentary

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13: Outlook

90

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Outlook Conclusions and the future  Commentary  Commentary  Commentary

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14: Brand profiles

92

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Acqua Panna Nestlé Waters Company: The brand belongs to San Pellegrino S.p.A, which, in 1998, was acquired by Nestlé Waters, and now sits under the global market leader’s water portfolio.

Product: Natural spring water. Sourced from 3,700 feet above sea level in the Apennine Mountains in Tuscany, Italy. In 2014, to celebrate its 450th anniversary, the brand conducted a global redesign, with new packaging designed by CARTILS. Volume sales: Approximately 230 million litres worldwide in 2015.

Packaging: Glass: 250ml, 500ml, 750ml, 1 litre. PET: 500ml, 750ml, 1 litre.

Various multipacks available.

Distribution: Majority of sales are in its domestic market (Italy), although also available in a selected number of countries including the UK and Germany. The company began exporting Panna to the US in 1994.

Channel analysis: Retail and out-of-home/in-home Predominantly on-trade in export markets.

93

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market

(Italy).

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STRATEGY & MANAGEMENT  MERGERS & ACQUISITIONS  COMMERCIAL & MARKET  OPERATIONS & TECHNICAL  WATER & GEOTHERMAL  ENVIRONMENT & CARBON  PACKAGING & DISTRIBUTION

2016 Data Sheet Sample Full 86 country level datasheets, 2010-2015

zenithinternational specialist consultants to the food and drink industries worldwide

Packaged water volume (mln l) Country

2010

2011

2012

Packaged water vol % change 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

Premium water volume (mln l) 2010

2011

2012

2013

2014

2015

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Premium water vol % change Country

2010/11 2011/12 2012/13 2013/14 2014/15

Premium vol as % of packaged 2010

2011

2012

Packaged water value (US$ mln) 2013

2014

2015

2010

2011

2012

2013

2014

2015

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Packaged water val % change (US$) Country

2010/11 2011/12 2012/13 2013/14 2014/15

Premium water value (US$ mln) 2010

2011

2012

Premium water val % change (US$) 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Premium val as % of packaged Country

2010

2011

2012

Packaged water vpl (US$) 2013

2014

2015

2010

2011

2012

Packaged water vpl % change (US$) 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Premium water vpl (US$) Country

2010

2011

2012

Premium water vpl % change (US$) 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

Packaged water value (euro mln) 2010

2011

2012

2013

2014

2015

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Packaged water val % change (euro) Country

2010/11 2011/12 2012/13 2013/14 2014/15

Premium water value (euro mln) 2010

2011

2012

2013

Premium water val % change (euro) 2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Premium val as % of packaged Country

2010

2011

2012

Packaged water vpl (euro) 2013

2014

2015

2010

2011

2012

Packaged water vpl % change (euro) 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Premium water vpl (euro) Country

2010

2011

2012

Premium water vpl % change (euro) 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

Packaged water value (local mln) 2010

2011

2012

2013

2014

2015

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

TOTAL

zenithinternational specialist consultants to the food and drink industries worldwide

Packaged water val % change (local) Country

2010/11 2011/12 2012/13 2013/14 2014/15

Premium water value (local mln) 2010

2011

2012

2013

Premium water val % change (local) 2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

zenithinternational specialist consultants to the food and drink industries worldwide

Premium val as % of packaged Country

2010

2011

2012

Packaged water vpl (local) 2013

2014

2015

2010

2011

2012

Packaged water vpl % change (local) 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

zenithinternational specialist consultants to the food and drink industries worldwide

Premium water vpl (local) Country

2010

2011

2012

Premium water vpl % change (local) 2013

2014

2015

2010/11 2011/12 2012/13 2013/14 2014/15

USA Canada North America

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Others West Europe

Belarus Bulgaria Croatia Czech Republic Estonia Hungary

zenithinternational specialist consultants to the food and drink industries worldwide