Bottled Water in Japan

PROSPECTS

Benefiting from health and wellness trend

The health and wellness trend is leading to growing consumer concerns about the impact of artificial ingredients in food and drink on human health and, therefore, a rise in demand for products that are perceived as natural. In soft drinks, bottled water is at the forefront of this trend, resonating with health-consciousness because of its lack of sugar or calories, as well as benefiting from its natural image and lack of ingredients such as colourings.

Strong growth for carbonated bottled water

Health-conscious consumers are finding themselves caught between concerns about the health impact of artificial ingredients such as sweeteners and the increasingly negative image of sugar. As a result, in categories such as carbonates, they are reluctant to opt for either regular products containing sugar or sugar-free alternatives containing artificial sweeteners.

Concerns about plastic waste a potential constraint

Increasing consumer eco-consciousness and, particularly, rising concerns about the impact of plastic waste on the environment have the potential to militate against the development of bottled water during the forecast period. Japan is behind only the US in its production of plastic waste per capita and has been relatively slow in its efforts to reduce the use of plastic.

COMPETITIVE LANDSCAPE

Domestic brands dominate

The natural positioning of water is compatible with a strong demand for locally-sourced products, especially as Japanese consumers generally display more faith in domestic brands. Moreover, consumers are further deterred from purchasing the international brands that are present in retail channels by the fact that they generally command higher unit prices.

Suntory Beverage & Food focusing on health and wellness

Suntory Beverage & Food remained the leading player in bottled water in both volume and value terms in 2018. The company’s strength is primarily founded on the market-leading, Tennensui brand (which is, in fact, the largest soft drinks brand in Japan), though it also offers the Suntory Vitamin Water and Dakara brands in the category.

Leader expands flavoured water offer

In 2017, Suntory expanded the offer of the Tennensui bottled water brand with the introduction of the Premium Morning Tea extension. Tennensui Premium Morning Tea was the first tea flavoured water product in the market.

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