Asia Helps Bottled Water Ride the Global Storm

BASINGSTOKE, England, January 15 - In terms of price it is very difficult for bottled water to compete with
tap or municipal water and consequently many commentators felt that waters
would be particularly exposed to the global recession. Canadean's recently
published Global Bottled Water Report however suggests that final year
figures for 2009 may see the worldwide market for bottled water increase by
around 2%. Although this does represent a slowdown, it is encouraging for the
industry that the category can maintain growth in even the most testing of
trading environments.

    Share of the Global Bottled Water Market

    % Share
                       2008      2009P    2010F     2011F      2012F
    Asia               20.8       22.6     24.4      26.0       27.3
    China               8.5        9.5     10.7      11.7       12.7
    Rest of World      69.3       66.6     63.7      61.2       58.9

Source: Canadean

The market would have fared significantly better if one discounts North
America, which in 2008 dropped from double digit growth the year before into
decline. In North America a combination of consumers switching to more
economical filtered tap water and concerns over the environmental impact of
bottled water have triggered the downturn in sales. In the US some government
offices are banning packaged water from government offices and events while
various other states are attempting to add bottled water taxes. North America
accounts for 18% of global sales and the performance here is harming the
overall global picture; in 2009, without North America the global water
market was forecast to increase by a healthier 4%.

The biggest market for waters, West Europe, which accounts for nearly 30%
of world volumes, is also set for negative 2009 results. Spain and France,
two of the heavyweight markets, are responsible for much of these losses. In
Spain it is the slump in on-premise sales which is responsible for the extent
of the projected losses as the recession keeps consumers at home. In France
three factors have been affecting still water consumption: environmental
(packaging and transport), tap water campaigns and of course economic issues
related to the price of mineral water.

Asia will once again be the main global driver in 2009 and within Asia it
will be China that boosts the regional and indeed the global performance.
Canadean's Quarterly Beverage Tracker suggests that the Chinese water
category jumped by 18% in quarter 3 last year and is set for another big
increase in volumes. The market has been aided by hot weather in certain
important parts of China and intense price competition which has kept prices
low. An improving economy is very significant and it is perhaps no surprise
that the Chinese quarterly GDP growth rate was 8.9% year on year, which was
1.0% higher than Q2-09. There remains plenty of slack in the Asian market
with per capita two and half times less than the global average.

With the help of Asia, the bottled water category seems to have ridden
out the worst of the global recession, but Canadean consultants do not expect
the pre-recession growth rates to return. Canadean expect the water market to
settle back down to a growth rate of 5% after 2009, a marked slowdown on the
7% seen in 2007 or the 9.5% jump in 2006. What will be encouraging for the
water industry is that Canadean anticipate every region in the world to be
registering water growth in 2010.

Canadean's Global Bottled Water Report is part of a series of global soft
drinks reports on eight separate categories. It is compiled using Canadean's
extensive global soft drinks databases, contains current and forecast data
and can be purchased in total or by section. For more information on this
product please contact Debra Richards on tel: +44(0)1256-394-227, email
soft@canadean.com or visit www.canadean.com.

Editor's Note:

Canadean is the beverage industry information specialist, providing
market research, reports, databases and consulting on the global beverage and
beverage packaging industries.

With headquarters in the UK and regional offices around the world,
Canadean has built a reputation as the benchmark for global beverage market
intelligence. Local operations are now based in Madrid, Buenos Aires, Mexico
City, Hong Kong, Beijing, Shanghai and Sydney.

Issued by the Corporate Marketing Department of Canadean Ltd, the leading
global beverage research company.

    Canadean Ltd
    12 Faraday Court
    Rankine Road
    Basingstoke
    RG24 8PF
    England

    Tel: +44(0)1256-394210
    Fax: +44(0)1256-394201
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    Website: www.canadean.com

Canadean Ltd, 12 Faraday Court, Rankine Road, Basingstoke, RG24 8PF, England, Tel: +44(0)1256-394210, Fax: +44(0)1256-394201, Email: sales at canadean.com