Bottled Water in Argentina

2020 IMPACT

Bottled water hit hard by massive decline in foodservice demand

The impact of the complete shutdown of the consumer foodservice industry during the initial nationwide quarantine put enormous pressure on bottled water foodservice sales in 2020. The situation was exacerbated by the shift towards home working for office workers, service industry personnel and white-collar professionals.

Economic crisis forces consumers to shift to cheaper alternatives

Consumption of bottled water continued to decline in 2019 as high inflation and declining consumer purchasing power led to lower spending. Indeed, these factors resulted in many Argentinians switching to tap water for their hydration needs.

Increasing competition drives Aguas Danone de Argentina to invest in innovation

Aguas Danone de Argentina continues to lead bottled water retail sales in Argentina thanks to its ongoing investment in developing its portfolio of brands, including Villa del Sur, Villavicencio, Villa del Sur Levite´, Ser and We by Ser. The company continues to invest in innovation, with the aim of creating different moments of consumption through the introduction of new packaging sizes, as well the expansion of flavours under its Villa del Sur Levité range.

RECOVERY AND OPPORTUNITIES

Sluggish recovery in foodservice sales expected due to economic crisis

Bottled water foodservice sales are not expected to recover to pre-pandemic levels until 2023. The main reason for this is that consumers are expected to eat and drink in pubs, cafés, bars and restaurants less often during the first half of the forecast period.

Strong growth potential for cheaper purified bottled water

Demand for still purified water over the coming years will be driven by the expansion of bulk water, the penetration of hot/cold dispensers in homes, and the low cost of still and carbonated water distributed by direct sellers to consumer homes. It is important to note that hot/cold dispensers sold by home delivery purified water players such as Ivess and Cimes saw strong growth in recent years as this device helps increase water home consumption occasions and allows consumers to prepare yerba mate, hot tea, soups and liquid and powder concentrates.

Rising health awareness fuelling shift away from flavoured bottled water

Flavoured bottled water was initially positioned as a healthier alternative to carbonates, a message which resonated among consumers for many years. However, with the rise of the health trend in the early part of the review period, consumers started to notice the high sugar levels in this format of bottled water and began to avoid these products, leading to steep declines in consumption.