Fierce com­pe­ti­tion among bot­tlers

Executive Magazine - - Contents -

Nor are there many prod­ucts that are the same price as they were a decade ago. But as the mar­ket­ing say­ing goes, wa­ter is life, and there is plenty of com­pe­ti­tion for con­sumers of bot­tled wa­ter.

“You can con­sider bot­tled wa­ter in Le­banon as a ba­sic good. You don’t have any al­ter­na­tive for drink­ing wa­ter, so we’ve never re­ally been af­fected by the po­lit­i­cal sit­u­a­tion, nor the eco­nomic sit­u­a­tion,” says Merched S. Baak­lini, deputy gen­eral man­ager of Bev Hold­ing, pro­ducer of Rim.

Ac­cord­ing to a 2016 Blom­in­vest Bank re­port, the sec­tor grew in vol­ume by 2 percent in 2013 and 2014, and 5 percent in 2015. In value terms, it av­er­aged 6 percent growth in 2013, 10 percent in 2014, and 6 percent in 2015.

Sec­tor play­ers at­tribute the ris­ing de­mand for bot­tled wa­ter to both the healthy life­style trend, with con­sumers in­creas­ingly opt­ing for wa­ter over soft drinks, and gov­ern­ment mis­man­age­ment of the wa­ter sec­tor. This ranges from health scares re­lated to the lack of over­sight of wa­ter com­pa­nies — es­pe­cially un­li­censed bot­tlers, — to short­ages in gov­ern­ment supply. When the taps run dry, con­sumers are left un­sure about the qual­ity of wa­ter de­liv­ered by truck to their apart­ments.

The trash cri­sis of sum­mer 2015 caused another spur in busi­ness ac­cord­ing to bot­tlers, fu­eled by mount­ing pub­lic con­cern about the gov­ern­ment’s in­abil­ity to deal with waste and en­vi­ron­men­tal degra­da­tion. Tests car­ried out by the Le­banese Agri­cul­ture Re­search In­sti­tute (LARI) showed that, in March 2016 — nine months af­ter the trash cri­sis started — leachate from dump­sites across the coun­try en­tered the ground­wa­ter, with bac­te­ria lev­els reach­ing 2,000 tril­lion per mil­li­liter (ml) the ac­cepted norm be­ing less than 200 per ml.

The Class A bot­tlers — es­tab­lished brands li­censed by the Min­istry of Pub­lic Health (MoH) — ac­count for an es­ti­mated 30 percent of the mar­ket, ac­cord­ing to in­dus­try in­sid­ers, val­ued at around $160 mil­lion

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