Bottled Water Distribution In The Uk

The UK bottled irrigate trade, a sub segment of the soft drink mart has continually increased it sh ar of the soft drink grocery. Thomson (2008) reports that the UK trade for bottled mineral and spring irrigate alone experienced consideration expansion and is instantly worth an estimated E1. 7 zillion p.a., fetching up about 15 per centum of the soft drink gross revenue in the UK. The market is project to rise to 21 percent of the soft drink market by the end of 2008. Datamonitor (2007) reports that the UK bottled piss market generated measure revenues of $2.8 jillion in 2006, representing a compound annual ingathering interest (CAGR) of 9. 4 percent for the current between 2002 and 2006. Further, market consumption volume is estimated at 2. 3 billion liters in 2006, representing a compound annual fruit rate of 8. 5 percent between the same periods. The authors further projected that the death penalty of the bottled weewee market should increase by an anticipated c ompound annual growth rate of 8. 6 percent during the five year period finishing in 2011 to about 3. 4 billion liters, expanding the market to about $4.2 billion by the end of 2011. The projected expansion of the market enhances the chances of new entrants into the market (Datamonitor, 2007 Thomson, 2008). The UK bottled piddle market is mainly comprised of sparkling flavored water, sparkling unflavored water, unagitated flavored water and still unflavored water. Breaking down the market performance of each of this group of bottled water, Datamonitor reports that still unflavored water proves to be the well-nigh lucrative for the year ended 2006, generating revenues estimated at $1. 3817 million or taking up about 49.6 percent of the total market. This is closely followed by sales of sparkling unflavored bottled water that generated revenues of $916. 5 million representing 32. 9 percent of the market sh atomic number 18. In sum, Thomson (2008) reports that still bottled water, both flavored and unflavored, accounts for 86% of the market (Thomson, 2008). The enrapture of Herbal Water into the UK bottled water market will be compound by a couple of pointors. Most significant among these factors is the trend, the increase take aim for spring, mineral or nutrient rich water.Thomson (2008), reports that the market demand for mineral water continues to grow faster than other sections of the bottled water market. As mentioned previously, the market share for mineral water was estimated at ? 1. 7 billion annually in 2007 and it is projected to experience further growth. Furthermore, the author reports that there appears to be excess demands for the reaping, with several customers reporting that they experience out-of-parentage, when shopping for mineral water in their grocery store.Ayalas Herbal Water with her first herbally flavored water is expected to make a difference in the UK bottled water, especially within the mineral water sub-segment. The UK bottl ed water market has a fragmented social structure with no definite scattering chain. Although major break awayers like the multinational corporation Danone and Nestle are involved in the market, the major buyers are retailers. The nearly apparent distri plainlyion chain involves major retailers, such as larger supermarkets and hypermarkets like Tesco and Asda.Retailers are genuinely concentrated in the UK bottled water market, taking up almost 50 percent of the market share. Other distribution carry include convenience stores, online trades and an increasing significance of hotel sales that has been experiencing growth lately. It is well established that retailers represent the major distribution channel for bottled water in the UK. Datamonitor reports that large supermarkets and hypermarkets take up 49 percent of the total market share of bottled water in the UK.However, two primary factors play significant roles in the buy capacity and choice of the retailers. It is repor ted that the buying choice of retailers is greatly influenced by the need to respond to the demands of the customers. Thus, while retailers are the strongest distribution channel for bottled water, the choice is primarily influenced by the demands of the immediate customers they serve. This fact weakens the effect of retailers relative to manufacturers with strong and well known brands. Consequent upon the above fact, brand significantly influences distribution of bottled water.While products may be differentiated and unique as a result of its content and characteristics, the herbal approach to water flavoring adopted by Herbal Water, for example, branding is most promising to play significant roles. Retailers will be more willing to stock popular brands that are in demand, and manufacturers of popular brands can get their product across the distribution channels of several retailers. However, Datamonitor (2007) contend that Bottled water manufacturers and retailers depart in q uite different businesses, and vertical integration rarely occurs to taint the boundaries between them.As bottled water is a sub-segment of the soft drinks market, its importance to retailers is not very great, especially for the more powerful supermarket chains, which sell a wide multifariousness of food and drink products (p14). Again, the rivalry in the UK bottled water is further fortify because retailers which play the most significant role in distribution do not experience any considerable costs in change by reversal from one manufacturer product to the order, building strong brand around consumer loyalty can help defend manufacturers from this situation.Moreover, this increased rivalry is even out for by the healthy revenue accruable to each manufacturer due to the huge market potentials of bottled water (Datamonitor, 2007). Convenience stores and hotel sales are other channels for distributing bottled water these channels represent 19. 2 and 13. 6 percents of total mar ket volume respectively, while other channels such as the increasing demand for bottled water in the leisure industry accounts for 22. 4 percent of total market volume.In sum, the UK bottled water market is has retailers as the primary buyers, these are well concentrated in the market and determines the success of any bottled water manufacturer in the market, although, to a large extent their buying power is influenced by the demands and choice of the customers they supply. Convenience stores and online sales are important channels, but they do not directly influence consumer loyalty and branding as would the retailers chain.The fragmentation of the UK bottled water has both positive and negative implications, but the susceptibility of the Herbal Water Company to effectively harness the positive implications should greatly enhance the success of its product in the UK market. References Datamonitor (2007). Bottled Water in the get together Kingdom Industry Profile. Reference Code 0 183-0016. Thomson, Steven (2008). Bottled Spring Water. Scottish outlandish College, Edinburgh. Acessed 24 Mar, 2008. Available at <http//www. sac. ac. uk/consultancy/farmdiversification/database/valueadded/bottledspringwater? viewMode=print> (Feb 6, 2008).