Opportunities for further growth lie in product innovation and the vertical integration of production lines.
Melbourne, Australia (PRWEB) July 09, 2013
The advent of the global financial crisis has caused widespread damage to most manufacturing industries in Australia. The Bottled Water Manufacturing industry consists of establishments that engage in the production of spring water, purified water, mineral water and bulk or packaged water. The industry's growth over the past five years has been a mixed bag. Buoyed mostly by ongoing consumer desire for healthy, convenient beverages, the industry also faced downward pressure from volatile economic conditions and low consumer sentiment. According to IBISWorld industry analyst Ryan Lin, “while bottled water has been among the best performing beverages for the past decade, the global financial crisis stunted industry revenue growth.” IBISWorld expects that industry revenue will grow slightly over the five-year period through 2013-14, with an annualised increase of 1.5% to a total of $621.6 million.
Over the next five years, the Bottled Water Manufacturing industry is anticipated to maintain its slow momentum. “Demand from supermarkets and convenience stores is expected to pick up again as consumer discretionary income increases,” says Lin. Opportunities for further growth lie in product innovation and the vertical integration of production lines. New production techniques have also reduced the amount of plastic resin required in the manufacture of bottles, both lowering costs and addressing environmental concerns. Mounting environmental criticism, however, still remains a major threat to the bottled water industry. Producers have moved to counter this criticism by developing more environmentally friendly packaging and emphasising their green credentials in the extraction of ground water.
Industry concentration has been increasing gradually over the past five years with larger beverage companies acquiring successful bottled water brands. The industry now displays a high level of market share concentration, and is dominated by major players Coca-Cola Amatil and Asahi Holdings Australia. The industry is forecast to face a brighter future over the next five years, with the recovering economy, rising average temperatures, growing health awareness and consumers' ongoing need for convenience expected to drive sales of bottled water.