Water cooler market value ‘up 5%’, BWCA conference hears

The bottled water cooler market performed better than mains-fed units in terms of both volume and value growth last year, the Bottled Water Cooler Association Conference has heard this afternoon.

Attendees to the event in London were told that the cooler market recorded average volume growth of 1.5% last year. Bottled water coolers rose 1.8% to reach 341,000 units while mains-fed coolers reached 304,000 units – up 1.2%. Overall, the British market is currently operating around 645,000 water coolers, as consumers and employers continue to turn to water for calorie-free hydration.

Bottled water cooler sales revenue has increased by 5% year on year to 296 million litres, Zenith International senior commercial consultant Karen Wells said. The volume split between the two segments of the market continues to be weighted towards bottled water coolers, which

account for 53% of all units. The respective value is, unsurprisingly, more marked: although the mains-fed sector has grown in the past three years to nearly 50% of installed units, in revenue terms its share of market has declined to less than a quarter.

By contrast, bottled water coolers have seen a slight increase in terms of margin and prices, with water costs and rental values either remaining stable or increasing slightly.

Wells said: “Mains-fed remains cut-throat. The key customers are usually in the public sector and so this is a tricky area for companies dealing with their customers’ cost-cutting and head-count reductions. There are large, best price tenders to compete for and so the need to compete on price makes revenue generation ever more difficult in this segment.

“The return of business confidence in the private sector boosted bottled water cooler sales. This is excellent news for the industry.

“Consumers have continued to move towards water for regular hydration – and this is true in the small pack and cooler segments of the market. In fact, we believe that small pack growth has helped fuel the growth of the cooler industry. It has encouraged regular hydration.”

This has taken shape in the form of a gradual shift, often through lighter beverages and light packaged drinks towards water, rather than a direct switch.

Wells continued: “We reported last year that the market is less dependent upon weather as a direct indicator of performance and this trend continues.”

She points out that, in 2013 and 2014 when the apparent trend began, it was difficult to see if this would be a long-term pattern as both summers were warm.

“By contrast in 2015, although the summer was poor, the market still grew. It now seems that consumers switching into water because of warm summers has translated into a water habit through the year, regardless of whether the summer weather is warm”.

She confirmed that, in addition, it is clear that the unseasonably warm start to winter at the end of 2015 helped sales further.

BWCA chairman John Dundon added: “In 2013, the market was up 3% by value over the previous year – the first year of growth since 2007. Then in 2014, we saw 9% revenue growth and now, for 2015, 5% growth. We expected continued growth and it is excellent to see it confirmed. The market expansion was, as predicted, not just a ‘blip’ but a trend.

“We thank Karen Wells and her team for delivering this data to the BWCA conference. We are immensely grateful to her – and especially so as she has brought such positive news for our industry.”