Bottled Water in South Africa

PROSPECTS

Boost for bottled water due to drought and environmental factors

Bottled water continued to experience strong demand in South Africa in 2019, supported by the water crisis caused by the ongoing drought and water-borne diseases. This performance was driven by the most affordable option presented by the largest category of still bottled water, which experienced a declining unit price, making it even more accessible to a wider audience.

Gradual move away from carbonates supports demand for flavoured bottled water

The rising health trend and the sugar tax on sweetened soft drinks is leading to the increasing popularity of carbonated and flavoured bottled water in South Africa. These formats are offering convincing alternative options to carbonates in particular, as they offer a refreshing appetising beverage but with the specific value of a lower sugar content.

Increasing number of smaller players entering category will drive down margins of bottled water brands

The competitive landscape of bottled water will intensify due to ease of distribution and the number of smaller players entering the category. High rates of entrepreneurship in South Africa allows individuals to launch their services, as the category continues to offer strong growth potential.

COMPETITIVE LANDSCAPE

Coca-Cola South Africa retains dominance of bottled water but experiences some competition from smaller players and private label

Coca-Cola South Africa (Pty) Ltd retained its overall dominance of bottled water in 2019, although it lose share within the largest category of still bottled water to smaller dynamic players and private label lines such as Woolworths. It also lost ground to second-ranked Ekhamanzi Springs (Pty) Ltd, which continued to gain momentum with AQuelle, the leading bottled water brand in off-trade volume terms.

Tsitsikamma Crystal Spring Water expands through innovative use of flavours and pack sizes

Tsitsikamma Crystal Spring Water CC gained momentum with a particularly strong performance in the dynamic category of still spring bottled water, as the player expanded its range of pack sizes and distribution within the main retail outlets. The company also attempted to be more innovative, particularly within flavoured water, in an attempt to capitalise on the growing consumer demand for alternative options to carbonates, offering a reduced sugar range and removing aspartame from its composition.

Refill initiatives to offer safe affordable drinking water is likely inspire further development

Demand for and the offer of refill water continued to rise in South Africa. The availability of water on tap enables consumers to refill water at local petrol stations.

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