Australia has abundant resources of pure natural drinking water. Natural water sources includes deep-spring water, volcanic spring water, natural rain, etc. Natural water is rich in nutrients and other health benefits for consumers. The Bottled Water Manufacturing industry has performed well over the past five years, and competition has increased, following the introduction of private-label bottled water brands. Rising competition has driven volume growth, through lower prices and increased availability, but such prices have also meant that revenue has grown at a slower rate.
Demand for bottled water has been mostly buoyed by population growth and ongoing consumer desire for healthy, convenient beverages. The industry also faced downward pressure from consumers' increased focus on its environmental footprint.
New production techniques such as blow-fill technology reduces the amount of plastic resin required in the manufacture of bottles, lowering costs and addressing environmental concerns. Mounting environmental criticism still remains a major threat to the bottled water industry with critics pointing to low recycling rates, with over 60% of bottles ending up in landfill. Producers have moved to counter this criticism by developing environmentally friendly packaging, minimising PET resin and emphasising their green credentials in the extraction of groundwater.
As consumer discretionary income increases, increased consumption will lead to a rise in demand from supermarkets and other retailers. Rising demand for healthier alternatives to carbonated beverages is expected to increase per capita consumption of bottled water in Australia, which lags behind many other developed countries.
Industry revenue will grow over the five years through 2014-15 at an annualised 3.7%, to $710.7 million. In 2014-15, industry revenue is expected to grow 5.0%.
Export revenue will grow steadily from 2015/16 to reach $2.5billion in 2019/20.
Source: Ibis Worldwide Report Bottled Water Manufacturing in Australia August 2014