Bottled Water in Venezuela

PROSPECTS

De facto price deregulation continues in 2017

In 2011, the government set a price ceiling on still bottled water which resulted in a falling supply because delayed price adjustments kept them below the cost of production and so for several years the supply of bottled water failed to satisfy demand. In addition, a lack of efficient public policies to provide a constant supply of pipe water made water rationing a common occurrence during the review period.

Lower unit prices support still bottled water over other categories

Manufacturers’ and consumers’ decisions are strongly influenced by the hyperinflationary environment developing in Venezuela during 2017. On the demand side, high inflation is prompting consumers to compare price levels rather than price changes, to make purchasing decisions based on affordability instead of brand loyalty.

Inadequate tap water supply encourages consumption of bottled water

The domestic production of bottled water continues to be threatened by packaging shortages that lead to an erratic presence of products and brands during 2017 and the forecast period. The category is expected to show a moderate decline as long as the business environment in the country remains difficult, with companies neglecting the introduction and development of new products.

COMPETITIVE LANDSCAPE

Pepsi-Cola Venezuela maintains its leadership in 2017

The large companies Pepsi-Cola Venezuela CA (Minalba) and Coca-Cola FEMSA de Venezuela SA (Nevada) led bottled water in 2017. These players rely on their brands’ high recognition among Venezuelans, which has been established after years of investment in building brand awareness.

Coca-Cola FEMSA de Venezuela leads flavoured water

Coca-Cola FEMSA continues to lose volume share in all categories, although maintaining its leadership in flavoured bottled water with Nevada, offering tangerine, grapefruit and Jamaica’s flower. Coca-Cola FEMSA has a stronger presence against an unsteady supply of Pepsi-Cola’s brand H2OH! that showed an important spike in 2016 when severe sugar shortages afflicted the beverages industry.

Local players focus on still bottled water

Bottled water continues to be a very fragmented category, with close to 100 bottling companies competing in still bottled water in 2017. New entrants are mostly local companies with a focus on still bottled water, which sometimes sell bottles without proper tags since they might lack sanitary permits.

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