Aqua monta – INDUSTRY ANALYSIS – PART 1

III INDUSTRY ANALYSIS

FUTURE OUTLOOK AND TRENDS

Bottled water is the fastest-growing beverage category in the world: it “has expanded from a tap water substitute into the beverage arena”[1]. The bottled water industry is extremely prosperous, involving companies with different histories and approaches to water. Bottled water is a booming and very competitive market involving numerous companies. Although bottled water is a world market, with companies present world-wide, 75% of it is still controlled by local actors.

According to Senior and Dege (2005), the prospect for the future continues to be one of exciting and dynamic change on a global scale“. Although there are four big players on a global market (see Analysis of competitors), bottled water has always been a product for which a local producer can serve a local market, or where entrepreneurial spirits can carve a niche with a new idea. So diversity of companies and brands seems to be assured both on global and local level.

In regard with future outlook and trends in water bottling industry, bottled water is an extremely competitive market hence companies present on the bottled water market need to develop diverse marketing strategies and differentiate themselves amongst others. Trends in the water bottling industry will develop through two different channels:

Accessing new markets, by owning or developing partnership with regional companies, as a major marketing strategy. Consumers are traditionally keener on natural mineral water than on other types of bottled water and spring waters are very successful. They are considered as safe as natural mineral water while being much cheaper: water from different springs is sold under the same brand, reducing transportation costs. “Multi-spring water” is a new and and promising strategy, although this practice is long-established in North America. Nestlé launched its Aquarel spring water, and Danone counterattacked with Danone Water. Companies tend to invest abroad and create local bottling facilities so as to reduce transportation costs, rather than directly exporting the water. With so positive market trends, they can expect to recover their investment and generate profits in a rather short period.

Developing new packaging and products. The packaging is an important part of the bottled water marketing success. All types of bottles coexist and are regularly reshaped in order to better catch consumers’ attention. The most recent trends in the small bottles category goes for supposedly handier bottles, e.g. 0.5 liter bottles with a sport-type cap or 1 liter bottles for desk use. New products such as flavored water, waters enriched with vitamins and minerals and health-benefiting water tend to develop. Brands also diversify by creating numerous by-products, e.g. Evian’s atomizer for facial care and isothermal bag for the 1.5 liter bottle. The 0.33 liter Evian bottles can be adapted a teat, to turn into a babies’ bottle. Natural mineral water springs in Europe are often related to a spa offering water cures and beauty care products (e.g.: Vichy).

The combination of the two above mentioned strategies is definitely a course of operation of foreign investors that Fin Invest doo will try to utilize in order to raise the required funds. By providing the required funds to Fin Invest doo and entering into this joint venture deal, a foreign investor that is interested to be present in Montenegro and/or on Balkans, by doing this way will have a possibility to gain local presence and develop a new product for health-aware consumers – natural spring water from Ropušica springs in Montenegro – the Aqua Monta water.