Bottled Water in South Korea

2020 IMPACT

Bottled water continues on growth path in 2020, supported by shift in channels away from on-trade and work from home measures

Bottled water experienced further strong off-trade demand in South Korea in 2020, in a continuation of a trend witnessed over the review period. South Koreans have become increasingly reliant on bottled water as the main source of drinking water, despite the government claiming the quality of municipal tap water to be acceptable.

Carbonated bottled water sees increasing demand due to “Home Café” trend

While still spring bottled water dominates off-trade volume sales in South Korea due to its affordable price point, there has been increasing demand for carbonated bottled water in the country, in particular for carbonated purified bottled water, from consumers who are trying to imitate foodservice-style drinks at home. In South Korea, home-prepared drinks have become increasingly popular since the emergence of the pandemic, as consumers searched for indoor activities.

Kwang Dong Pharm strengthens overall leadership due to strength in the dominant still bottled water

Kwang Dong Pharm Co Ltd strengthened its overall leadership of bottled water in 2020 in both off-trade volume and value share terms, due to its strength in the largest category of still bottled water where its leading brand Jeju Samdasoo recorded double-digit growth. Its closest competitors in this category, Lotte Chilsung Beverage, and Nongshim, remain at a notable distance in terms of share.

RECOVERY AND OPPORTUNITIES

Consumers continue to rely on stable water supply moving forward

Demand for bottled water is expected to continue growing over the forecast period through off-trade, even after the threat of the virus wanes, while demand through on-trade is set to significantly improve from 2021 to return to pre-pandemic levels as consumers regain their confidence and return to foodservice outlets. According to Euromonitor International’s Health and Nutrition Survey (2020), South Korean consumers are prioritising their wellbeing, placing greater emphasis on hydration with 67% of respondents seeking to drink suitable amounts of water.

Online subscription services to gain further uptake, with increasing competition likely to lead to greater affordability

An increasing number of bottled water players are expected to enter the water subscription market to meet rising demand from consumers who want a stable water supply. Due to the heavy and bulky nature of bottled water, carrying it home from physical retailers is traditionally one of the biggest problems for consumers.

Competition to further intensify as bottled water continues to attract increasing number of players

With bottled water in South Korea projected to experience healthy growth over the forecast period, it is likely to continue to attract an increasing number of companies, as already witnessed in 2020 with stronger share gain for smaller companies under “others”. This will also help to expand the consumer base of the category due to a more diversified range of products and price points.