Mineral Water Market Overview
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Septembrie 2008 |
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MAGAZINUL PROGRESIV |
Adresa
Bulevardul Iuliu Maniu, Nr. 103
Cladirea B, Etaj 5, Ap. 24
Bucureşti, Sector 6
Telefon
+40-21-315.90.31
Fax
+40-21-325.90.29
Website
www.magazinulprogresiv.ro
Stock increase, optimizing distribution and relationships with retailers are the main supplier tactics used to prevent a mineral water crisis similar to last year’s. At the same time, producers continue to invest money in communication and their portfolio, since there will be strong competition between popular brands and private labels.
Mineral water: it’s all about stocks
If in 2006, compared to 2005, mineral water consumption growth exceeded 30 per cent, (33.6% in terms of volume and 38.6% in terms of value), last year’s growth was somewhat slower in terms of volume, but important none the less (26.3%) and almost similar in terms of value (36.3% - according to Nielsen).
In terms of structure, over two thirds of the mineral water market is disputed by five major producers, while in terms of value, the cumulative share is of almost 75%. What is important to notice is that compared to 2006, starting last year, the new market leader of the segment was Romaqua, with the Borsec brand.
The trends estimated for previous years continue to consolidate, most important of these being the growth in consumption of still water and lightly carbonated mineral water. Overall, water consumption in Romania is still relatively low, with only 46 liters per capita in 2007 (National Society for Mineral Water), which is twice as little as the European average consumption.
In terms of offers, the entire price range is covered, with premium products to economy and private label ones or imports, and producers continue to come up with new brands or variations of existing ones, or to consolidate the image of already existing brands. It is no longer a surprise that modern retail is gaining ground, both in terms of volume and in value. For instance, sales of mineral water in supermarkets and hypermarkets grew almost 10 per cent since 2005.
Getting ready for 2008
Having experienced last year’s weather conditions, the major players of this category concentrated their efforts in two directions: creating larger stocks for 2008 and investing in promotions and new product launches.
“Every bottling company should have a buffer stock, especially in centers where it recorded the highest sales”, said Cristina Colacel, NCD Coordinator with Coca-Cola Hellenic Romania. However, last year “they were not ready for the high temperatures and stocks were at a minimum”.
“Mineral water crisis generated by 2007’s hot weather was caused by local producers’ improper preparations in case of an explosive rise in demand, which obviously led to imports from the EU”, said Adrian Gabor, Import & Development Manager, Cyrom Romania. Thus, producers this year were keen on avoiding a similar situation, and therefore consolidated their stocks, invested in new production lines and improved logistic capabilities, especially since forecasts showed many hot days this summer as well.
“We purchased two new bottling lines of large capacity for Borsec mineral water. If in 2000 we bottled 3.5 mn liters per month, we now have a production of 40 mn liters per month. To this, we add 16-20 mn liters per month of Aquatique and Stanceni mineral water brands. Moreover, we recently doubled our bottling capacity at the Stanceni production line, reaching 70 mn liters of mineral water per year. Our investments in the Borsec and Stanceni lines amount to EUR 15 mn”, said Mihaela Draghici, PR Director with Romaqua Group.
In its turn, Spring Harghita launched in March 2008 a new production line, which required EUR 3,5 mn. Besides investing in two new production lines, Coca-Cola ensured a larger stock than in previous years. “We increased our stock this year in order to avoid what happened last year”, said Cristina Colacel.
Taking this into account, the important steps for this year are investing in promotions and launching new and innovative products, demanded by modern consumers.
Regarding the ranges of products, producers have consolidated their messages and also launched new brands and extensions, for the soft drinks segment. The plans of Coca-Cola Hellenic Romania are to continue a sustained communication for its flagship brand Dorna, while for the other brand Poiana Negri “we will continue to associate it with traditional Romanian food and customs, such as cooking championships or traditional food festivals”
Having already a mature portfolio and a well known brand among Romanian consumers, European Drinks designed a new package for its Izvorul Minunilor mineral water, which was launched at the end of last year. Immediately after, the company launched its medium-carbonated Izvorul Minunilor mineral water, easily identified by its label and green cap. “We long passed the phase when we had to launch products every season, in an attempt to test the market, because, at our level, it would be inappropriate for a leader to use this type of guerilla approach”, said Delia Popa, PR Manager European Drinks. The company covers the family segment with its still and carbonated water Hera.
Apemin Tusnad also re-launched its brand Izvorul Zanelor. “The new label and identity offers consumers a colorful personality, full of imagination, refinement, conveying the natural expression of purity to the Izvorul Zanelor mineral water”, said Florin Nechita, Marketing Manager.
