Bottled Water in Indonesia

PROSPECTS

Health and wellness trend boosts bottled water consumption

Rising health-consciousness among Indonesians supported robust growth in overall off-trade volume and current value sales for bottled water in 2019. Mid-to-high-income consumers in particular proved increasingly willing to switch to bottled water due to growing concern about the negative health effects of other types of soft drinks that are high in sugar, such as carbonates.

Low prices and poor quality of tap water help to maintain demand

The trend towards busier lifestyles in Indonesia also stimulated growth in bottled water consumption in 2019, as did the increase in economic activity that accompanied the general election campaign during the early months of the year. Moreover, while economic conditions improved, many consumers remained quite price-sensitive after having experienced a drop in purchasing power over 2017-2018.

Launch of health-oriented products likely to persist despite niche appeal

The health and wellness trend has had a growing influence on new product development activity in bottled water in recent years. The latter part of the review period saw the entry of more products positioned as having functional benefits, most notably alkaline variants with a higher pH content.

COMPETITIVE LANDSCAPE

Danone maintains its lead despite growing competition

Danone Aqua remained the clear leader in bottled water in off-trade value terms in 2019 thanks to its wide distribution network and a well-developed portfolio that offers reputable brands such as Aqua, VIT and Evian in a variety of pack sizes. However, the company posted steep declines in off-trade volume and current value sales due to growing competition in its traditional stronghold of still purified bottled water.

Tirta Fresindo Jaya makes rapid gains in 2019

Tirta Fresindo Jaya ranked second overall in bottled water in 2019, and was by far the most dynamic player in terms of off-trade volume and current value sales growth. It recorded rapid volume and value share gains in still purified bottled water – primarily at the expense of Danone – thanks to a competitive pricing strategy and improvements in the distribution of its Le Minerale brand via traditional and modern grocery retailers channels.

Asahi Indofood benefits from wider distribution of its Club brand

Third-ranked bottled water company Asahi Indofood Beverage Makmur PT continued to post steady growth in off-trade volume and current value sales in 2019. In addition to the affordable price positioning of its Club brand, its positive performance reflected improvements in distribution via convenience stores and other modern grocery retailers channels.

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