Bot­tled wa­ter bucks the trend

China Daily (Canada) - - SHANGHAI - By SHI JING in Shang­hai shi­jing@chi­nadaily.com.cn

De­spite most bev­er­age com­pa­nies un­der­per­form­ing in the past few months, bot­tled wa­ter pro­duc­ers have in­stead been ex­pe­ri­enc­ing steady growth, ac­cord­ing to the lat­est sur­vey by in­vest­ment re­search and man­age­ment firm Morn­ingstar Inc.

The sur­vey also pointed out that car­bon­ated soft drinks will likely con­tinue to un­der­per­form while bot­tled wa­ter and en­hanced still bev­er­age con­sump­tion are ex­pected to ex­pe­ri­ence pos­i­tive growth.

Ac­cord­ing to the China Con­sumer Re­port 2016, which was co-re­leased by global mar­ket con­sult­ing firms Bain & Co and Kan­tar World­panel, the growth rate of bev­er­ages dropped to 3.2 per­cent in the first half of this year, down from 5.6 per­cent a year ear­lier.

Ex­perts from Bain & Co ex­plained that the de­cline in growth is mainly due to the cen­tral govern­ment’s push for up­grad­ing in the tra­di­tional man­u­fac­tur­ing in­dus­try which has re­sulted in some man­u­fac­tur­ers shift­ing their op­er­a­tions to Viet­nam and Bangladesh where wages are lower.

Ac­cord­ing to Ja­son Yu, gen­eral man­ager of Kan­tar World­panel China, bot­tled wa­ter has been ex­pe­ri­enc­ing pos­i­tive growth be­cause all con­sumers, and not just the rich, are be­com­ing in­creas­ingly con­cerned about their health.

“The mar­ket is be­com­ing more di­vided as some prod­ucts are tak­ing the slow track and some are tak­ing the fast track. Prod­ucts that can meet the de­mands of the emerg­ing mid­dle class, such as bot­tled wa­ter, will regis­ter faster growth,” said Yu.

Based on the find­ings of Shen­zhen-based mar­ket con­sult­ing ser­vice provider Ocn. com.cn, the Chi­nese bot­tled wa­ter mar­ket has grown by 20 per­cent in the past decade. It ex­pects the mar­ket to main­tain this mo­men­tum over the next five years and ex­pand by 15 per­cent an­nu­ally, bring­ing the to­tal an­nual con­sump­tion of bot­tled min­eral wa­ter to 49 mil­lion tons by 2020.

Wang Rong, a head­hunter in Shang­hai, has been con­sum­ing bot­tled min­eral wa­ter since three years ago when his son was born. De­spite the higher price, Wang is more than happy to pay.

“Chil­dren are more vul­ner­a­ble to ill­nesses so par­ents are nat­u­rally will­ing to pro­vide the best for them. Ever since my son was born, we have started to use bot­tled min­eral wa­ter in his daily diet,” said Wang.

“Although we have al­ready in­stalled a wa­ter pu­ri­fier in the house, we still think bot­tled min­eral wa­ter is bet­ter for his health. We grown-ups also find tea made with bot­tled min­eral wa­ter tastes bet­ter. We don’t think buy­ing bot­tled wa­ter will be a huge bur­den for the fam­ily. Any­thing good for the health is a wise in­vest­ment.”

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