Economic impact on the Bottled Water industry

Need to add an introduction and a recommendation, then task two need write 4 points (Role of Governments & Company Actions. Look at Assignment task title) The teacher said can stay Company Actions. Too much is not good.

Economic impact on the Bottled Water industry

Economic impact on the Bottled Water industry

Table of Content
Economic impact on the Bottled Water industry .1 Economic Environment within which the Bottled Water Industry Operates...........3

Economic impact on the Bottled Water industry

Economic Environment within which the Bottled Water Industry Operates Bottled water industry has been gradually developing throughout the world for the last thirty years. This industry is the most dynamic sector of all the food as well as drink industry (Julie, 2010). Bottled water industry in the world augments by the average 7 percent every year, regardless of its extremely higher price than tap water and though developed states consumers have, technically, accessibility to cheaper better quality tap water (International Bottled Water Association, 2012). Bottled water industry has become an unbelievable innovation, severe competition, higher profit margins, and extensive marketing promotion. Bottled water also persists to nourish growing higher customer demand, giving varied varieties of bottled water products. To more increase marketplaces, trends in bottled water contain latest product expansion, extensive marketing as well as packaging efforts, and the emersion of innovative industries tapping into bottled water.

International bottled water volume www.zenithinternational.com/events The international bottled industry is one among the rapid growing industries of today. World bottled water marketplace is likely to achieve $70 billion in 2017 and will be fulled by

Economic impact on the Bottled Water industry

growing population, customer spending pattern, trends of life and increasing degrees of health awareness, amongst others (International Bottled Water Association, 2012). International bottled water marketplace is controlled by Europe and USA that mutually form more than 50 percent of the market value. Some bottled water firms are seeking to enter developing marketplaces with huge expansion prospective like Asia as well as Middle East. China is one of these markets in which sales of bottled water are quickly growing (Julie, 2010). Firms are striving to capitalize on climate changes like summer and increase in health awareness among customers. The bottled water industry is likely to see great contribution from soft drink as well as dairy processing firms, promoted by economies given by present global distribution networks, and processing equipment. As bottled water was launched to the United States marketplace in the mid-1970s, bottled water sales it was not till the 1990s that bottled water became the quality of the American way of life. After severe declines in 2008 and 2009, the USA has recovered, in a serious way, hammering the new record higher in volume in 2011 (Henry, 2011). Latest figures from the Beverage Marketing Corp. demonstrate that sales of bottled water were increased 4.1 percent in 2010, against only 0.9 percent increase in bottled drink sales generally. In 2011, Americans bought 9.1 billion gallons of bottled water. Per capita use reached the newest peak of 29.2 gallons (Beverage Marketing Corporation, 2012). Successful marketing strategies have taken part to the achievement of the bottled water sector. Several consumers have appeared to think bottled water as the beverage clearly differs from tap water. Recent marketing attempts endorse the better qualities of water, producing the perspective that bottled water is the best preference. The supposed value of bottled water has been conveyed by product appearance and packaging and supported by a yearly $70 million of advertisement and promotion (Dupont, 2010). Though the International Bottled Water Association gives emphasis to that member firms are dejected from

Economic impact on the Bottled Water industry

unfavourable tap water, public surveys show that consumer reliance in tap water has been spoiled. Generally, the international bottled water industry has become extremely profitable in the last 10 years. Giant global firms at present generate billions of dollars on water they only extract from the ground, slap the label on and put up for sale at competitive costs (Gleick, 2011).

International bottled water regions www.zenithinternational.com/events Bottled water marketplace is dominated by many players like Nestle, Coca Cola, and PepsiCo which build up strategies like lower cost production, distribution abilities, differentiation (Innovative product variations improved waters or useful waters), lowered costs in industrialized marketplaces, and strategic agreements (strategic coalitions, mutual enterprises, franchises as well as acquisitions) for strengthening positions in recognized marketplace, and got minor sellers. Industry major sellers came to be positioning for industry development by buying small local brands (Hall, 2009). Product, packaging, price, marketing/promotion, distribution, and technologies would be the vital factors in increasing market shares in the industry. By ever-growing existence of soft drink giants like Coca Cola, and Pepsi, and developed leaders Nestle, and Danone, the marketplace is likely to become the caldron of actions in the future (Polanyi, 2009).

Economic impact on the Bottled Water industry

Bottled water is continuing to fare better in the international beverage market as the better option to carbonated soft drinks. Gains in bottled water marketplace are also coming from flavoured ranges and ease packaged designs; particularly single-serve packs (Sinovic, 2009). The bottled water industry of the world has recorded the annual development rate of 4 percent in 2010 to surpass $99 billion. The marketplace is likely to increase by over 27 percent during the five-year period that will end till 2015 to produce above $126 billion in profits. In 2010, the marketplace had the volume more than 152 billion litres, estimate to reach about 183 billion litres in 2010, showing 20 percent increase in five years (International Bottled Water Association, 2012). Still unflavoured water shows the key marketplace segments, producing 65 percent of overall marketplace revenue. The European Union holds more than 50 percent shares of the international bottled water marketplace. The international bottled water industry engages the sale of still unflavoured water, still flavoured water, sparkling unflavoured water and sparkling flavoured water. There are higher degrees of variations in the marketplace. Big firms are favouring consolidation, increasing capacities and expanding their product ranges by getting small firms with regional or niche benefits (Barlow, 2010). Consolidating activities are predicted to strengthen, making the industry more focused as vital firms strengthen their marketplace existence. The international bottled water industry is negatively affected by the economic depression however entered the improvement stage with stronger sales in 2010 (Henry, 2011). In the coming years, international bottled water sales are supposed to maintain representing stronger growth.

Economic impact on the Bottled Water industry

Economic Concepts to Evaluate the Operation of the Brecon Mineral Water Company Today, a lot of firms, not in huge states, but also in smaller states are taking keen interest in the packaged water (Sjolander-Holland, 2009). Because of this reason, different types of packaged water products are presented in the marketplace. Bottled water has proved to be the profitable industry; so, several firms are developing throughout this sector for making the most profits from the elixir of existence, water (Marcy, 2010). Some economic concepts to evaluate the operation of the Brecon Mineral Water Company are discussed below: Productivity Through Latest Technology Water industry of today is amongst the most fast changing and developing of industries. Present technology offers innovative opportunities and promise not available on the old platforms (Clarke, 2012). Such latest technologies give abilities like automatic fax and phone dialling, mail merging, express icons, messaging, exporting information to spread sheets, multi-tasking, internet accessibility as well as website order taking (Rodwan, 2012). Brecon Mineral Water Company knows that the incorporation of every operational phase of its business is important (Sinovic, 2009). With the time saving aspects of the new technologies, Brecons business is growing with no any additional costs and loss of control. Brecon Mineral Water Company has better productivity and considerably reduced costs following investment it has generated in computerization equipment. Increased consumer demands for its bottled water drive it to explore packaging technologies which would boost its productivity and facilitate reduce production costs (Rodwan, 2012). Initiating further sophisticated, automatic equipment is another step in achieving its objective. Product packaging and appearance is one among the key dynamics that manage the flow of target consumers to the product. At present for any business company being successful it has to offer its consumer with the differentiated products which are the value

Economic impact on the Bottled Water industry

purchase for them (Gleick, 2011). So as to provide to varying requirements of the consumer, Brecon Mineral Water Company constantly emerges with the variations of the products in order that it can target the highest segments. The most obvious development in Brecon Mineral Water Company is the productivity of the apparently constant range of bottled water products (Henry, 2011). The Company seeks to establish a new level in the bottled water industry initiating higher-end products. The Company seeks difference by marketing its water origins, enrichment, or even shapes, sizes and styles of bottle (Rodwan, 2012). A new packaging development in the Brecon Mineral Water Company is multi-packs. Since present bottled water consumption increases, more customers are relying on multi-packs to save time as well as money. Promotion through latest technology is necessary to differentiate the product, to increase productivity and attract customers (Clarke, 2012). Brecon Mineral Water Company aims to introduce new technology in order to boost its productivity and to successfully survive in the competitive environment of bottled water industry.

Supply & Demand The supply and demand of Brecon Mineral Water Company usually engaged activities of water sourcing, branding, distribution, packaging procurement, bottling and retail. Various competitors organize such supply and demand activities in a different way (Clarke, 2009). Brecon Mineral Water Company has an integrated production and multichannel supply and demand approach and it relies greatly on limited franchised bottlers for production as well as distribution activities (Clarke, 2012). One of the qualities of bottled water is that the key input (water) is approximately free, whether sourced from underground springs, rivers or municipal systems. Spring water

Economic impact on the Bottled Water industry

can be purchased from property owners for between 0.5 and 1.6 % per litre, relying on volume and marketplace closeness. Water from underground aquifers experienced little treatment further than filtration; however purified water can experience more severe processes, like reverse osmosis, distillation, deionization, or other sanitization processes (Ball, 2010). Today, Brecon Mineral Water Company prefers PET to PVC due to its better strength, weight, and design selections, and its low environmental effects (Dupont, 2010). PET resin is supposed a product, and the cost differs in accordance with supply and demand, and oil costs. Brecon Mineral Water Company has bottle and closing moulding equipment on site, and enjoys several economies of scale throughout bottle production. Efforts for differentiating the brand and develop the category has made possible augmented expenses on latest product growth, branding and advertisement. Advertisement is distinctive in the Company, showing about 15 percent of the wholesale cost. Different actors perform the supply chain activities, relying on the diverse business approaches utilized by Brecon Mineral Water Company (Environmental Working Group, 2010). The Company uses a "bottler model" that depends on franchise bottlers for supply and demand activities, sourcing and bottling, whereas product growth, branding and advertisement remains the responsibility of Brecon Company itself. The Company uses a business model based on huge-scale incorporated production (containing self-production of bottles as well as closures) with local brands. Brecon Company pursues the private label strategy (Gleick, 2011). The Company is capable to considerably decrease costs by utilizing low quality packaging, decreasing salaries and benefit costs, evading advertisement and promotional expenses, and cutting supply and demand expenses by delivering to warehouses of clients.

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Competition & Market Structure Competition is described as the marketplace differentiated by a huge number of autonomous sellers of standardized products, free information flow, as well as free entrance and exit (Henry, 2011). Bottled water is the industry where there are many sellers, several customers, standardized products, as well as comparatively firm pricing in the industry. Due to the abovementioned, the sellers in the bottled water industry strive to characterize their products from those of the competition in an attempt for gaining market shares (Gleick, 2011). An effort for the bottled water sector is directed towards flavours, vitamins, sweetener, and mineral fortification. There are major competitors in bottled water industry including Danone, Nestl, PepsiCo, etc (Sinovic, 2009). Although these are giant competitors however, Brecon Mineral Water Company is doing thoroughly for itself in this overall competitive environment and the Company puts up for sale Brecon bottled water. Its key emphasize has been to educate the customers as to the fundamental values of Brecon water. In accordance with the company, the main advantage of Brecon water is the amount of silica present. The Company has pressure to, stack it higher and sell it cheaper (Rodwan, 2012). Though, Brecon Mineral Water Company has expanded its audience by firmly practising its values. The high margins and fast turn rates on Brecon frequently influence retailers to give space for the product (Clarke, 2012). Brecon Mineral Water Company is a key example of how firms characterize its product from its competitors; how to make the profit in the overall competitive marketplace.

Role of Governments & Company Actions Today, bottled water industry is now under huge obligations by governmental body. Governments are imposing laws and different policies regarding environmental impact by bottled water industry (Rodwan, 2012). In order to tackle this situation, Brecon Mineral

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Water Company represents itself as the green business by claiming that it is committed to dynamically contributing in recycling as well as educating the public regarding the significance of recycling bottled water containers and every recyclable material (Henry, 2011). In return to growing criticism on the environmental effects of plastic bottles, Brecon Mineral Water Company has more tried to greenwash its products by initiating newest packaging with less plastic. Brecon Mineral Water Company is now endorsing the newest eco-shape plastic bottles which consist of less plastic, additionally to other packaging reduction (Gleick, 2011). Though, the reality is fact is that the Brecon Mineral Water Company and plastics industry is strongly associated. The Company is the end point of a supply chain which includes several of the major polluters on the planet. The company and the plastic resource company have invested millions of dollars for weakening and defeating bottle bills and recycled-content laws, frequently overspending its rivals. Environment segments on bottled water have all urged a continuous debate questioning the source of bottled water, safety of tap water, deceptive labelling practices, and regulatory gaps by Governments in the industry. Environmental concerns are in the background for the time being, as affordability remains the major purchase driver. Improvement in environmentally-friendly packaging has an important affect on the future of the Company. There are certain laws and policies by the Governments for extensive health and environmental legislations of the bottle water industry so as to withdraw independent control of bottled water in the public interest. Laws and legislations imposed by government require special labs for testing and technological tools for meeting needs so more modern equipments are required (Clarke, 2012). So firms including econ Mineral Water Company require upgrading their technologies and increase equipment quality and quantity to increase their productivity and meet demand.

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Conclusion The international bottled industry is one of the fast growing business sectors in the world at present. Global bottled water marketplace is supposed to reach $70 billion till 2017 and will be fuelled by growing population; customer costs patterns, life trends and increasing health awareness levels, amongst others (Dupont, 2010). Increasing consciousness of water safety and lack of mains water are the key drivers for development in these marketplaces. Improvement in packaging is the key to make sure the category keeps momentum. More industry consolidation will be expecting since the big firms obtain smaller/niche competitors to boost capacities and product range and achieve the grip in the less developed regions. Firms are attempting to capitalize on climate changes like summer and increase in health awareness among customers (Clarke, 2012). The bottled water industry is supposed to see better contribution from soft drink and dairy firms, promoted by economies given by present global distribution networks, and processing equipments. Bottled water will persist to cost well in the international beverage marketplace as the well option to carbonated soft drinks. Profits in the bottled water marketplace will also originate from flavoured varieties and suitable packaging designs (Rodwan, 2012).

Policy Suggestions The preset condition of water quality of bottled water is because of lack of laws for water quality control. There must be lawful corporation to monitor and rules of drinking water. The pricing strategies must be in proportion to the going rate marketplace prices of the diverse local brands (Gleick, 2011). As the newest brand has to undergo much rivalry from the marketplace, it proposed that the price ceiling must not be crossed no matter what price strategy is implemented.

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There must be a consistent system for internal quality control, external quality evaluation and sanitary practices in the bottled water industry. The source of every industry must also be appropriately evaluated and authorized by the official organization. The climate is the key dynamic which can bring changes in the marketplace size of the purified drinking water since the every day water needs increase during summer (Julie, 2010). When introducing the new brand of purified water for vast market, climate is the key dynamic that must be provided good consideration. The demand patterns for retail market of purified bottled water are not influenced by the climate. The advertising containing television and print media is likely to bring changes in the demand. Though, it is proposed that the newest brand of bottled water is introduced in the beginning of summer season (Henry, 2011). The firms must match the brand initiation time with the advertising and climate that would force the demand of bottled water and motivation of customers to move towards latest brands. Bottled water customers require severely limiting the bottled water consumption, and alerting such giant multinational bottled water companies. Moreover, bottled water companies must be needed to disclose the treatment processes which are done for their products.

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References Clarke, T. (2012). Bottled Water Industry Just Swimming in Profits. Toronto Star. Clarke, T. (2009), Inside the Bottle: Exposing the Bottled water Industry. (Revised & Updated Edition) Ottawa: Canadian Centre for Policy Alternatives and the Polaris Institute. Dupont, D. (2010) Tapping into consumers' perceptions of drinking water quality in Canada: Capturing customer demand to assist in better management of water resources. Canadian Water Resources Journal, 30, 11-20. Ball, D. (2010). Bottled water pits Nestl vs. Greens. Wall Street Journal. Beverage Marketing Corporation. (2012). Bottled water confronts persistent challenges, New report from Beverage Marketing Corporation shows (Press release). Retrieved from http://www.beveragemarket-ing.com/?section=pressreleases Environmental Working Group. (2010). Bottled water quality investigation: 10 Major brands, 38 Pollutants. Washington, DC: Author. Gleick, P. H., (2011). The worlds water, 2006-2007: The biennial report on freshwater resources. Washington, DC: Island Pres Hall, N. (2009). Protecting freshwater resources in the era of global water markets: Lessons learned from bottled water. University of Denver Water Law Review, 12, 1-50. Polanyi, K. (2009). The great transformation. Boston, MA: Beacon Press. Rodwan, J. G. (2012). Bottled water 2010: The recovery begins: U.S. and international developments and statistics. Bottled Water Reporter, 50(3), 10-18 Sjolander-Holland, (2009). The water business: Corporations versus people. London, England: Zed Books. Henry R. (2011). "Water: The Search for a Global Balance," Bottled Water Reporter, p. 53. Marcy Magiera, (2010). "Bottled Water: Sales Jump as Public Trust [of Tap Water] Drops,"

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Advertising Age, excerpted in Greenwire, American Political Network. International Bottled Water Association, (2012). "Frequently Asked Questions About Bottled Water. Julie Mason, (2010). "A Big Splash? Bottled City Water Soon May be Available in Stores," The Houston Chronicle p. 7. Business Trend Analysis, Inc., (2012). The Bottled Water Market: Past Performance, Current Trends, and Strategies for the Future: A Business Information Report , p. 94. Sinovic, Emily. (2009). Moldy Bottled Water. Fox23.com Barlow, M. (2010). Blue covenant: The global water crisis and the coming battle for the right to water. New York, NY: New Press.