The total water cooler market was worth GBP109 million in 2012 and, whilst it is set to decline this year and next, is set to return to growth by 2015, new data shows. The annual conference of the British Water Cooler Association (BWCA) also heard that the POU (point of use or main fed coolers) market is, for the first time, accounting for slightly over half the market compared with bottled water coolers, according to research by Zenith International.
Iva Hatzold, a research analyst from Zenith International, who was one of the speakers at the BWCA conference held on 14 March 2013, presented her company’s finding from data gathered in 2012. She also revealed that, the overall cooler market had declined from GBP115million in 2011 and that a steady but slight decline would continue with a value of GBP106million being predicted for the current year. However, by the year 2015, Zenith believes that there will be a year-on-year increase over the previous year of 0.6% bringing it back up to GBP106 million.
The UK leads Western Europe in terms of the number of installed water cooler units with 21% of Bottled Water units (BWC) and 30% of main fed (POU) coolers. The market for bottled cooler units had dropped from 2008 to 2011 but the decline is beginning to plateau, according to the findings.
Despite accounting for half the volume of cooler installations, bottled water punches above its weight in terms of value. In 2012 bottled water revenue stood at GBP77 million compared with just GBP32 million for POU. Despite an overall market increase, POU is expected to account for only GBP29 million in 2015 compared with GBP77milion for bottled water.
BWCA Chairman, John Dundon, said: “It is hugely exciting for us as an industry to have access to findings about the value of this market. This is the first time that we’ve had an accurate insight into both the number of coolers installed and the relative value of each of the two sectors of the British water cooler market from such a reputable organisation as Zenith International”.
Ms Hatzold cited external market influences, primarily poor British summer weather, as a key influencer. Currently 329,000 BWCs are in place serving some 264 million litres of water across the UK in the year 2012; 334,000 POU units are installed, up by 4% over the previous year.
The BWC market, the data appears to show, is subject to consolidation by the top five companies who now account for 56% of the market – up from just 45% in 2008. The POU sector also shows similar patterns with the top 5 companies holding 62% of the overall business, up slightly from the 58% held by the top 5 players just 4 years ago.
The office sector is by far the biggest segment of the market with nearly two thirds (62%) of the overall market; institutions come 2nd with 21% of the share. The segments with room for growth are HoReCa (currently 7%), domestic (3%) and retail (1%).
Zenith predicts a slowing of the decrease in the market for bottled water but a slowing growth rate of the mains fed market over the next 5 years, anticipating growth of over 3% in that segment over the current year and in 2014.
Revenues are under pressure although, predicted Ms Hatzold, BWC prices are moving upwards but revenues for POU’s are declining whilst BWC revenues are expected to return to growth from next year.
The data was revealed at the annual conference and trade show of the BWCA, whose theme was ‘Power of the Past; Force for the Future’. It took place in Kenilworth. Warwickshire.