Drink makers fight to win water market
08/21/2007
THE ASAHI SHIMBUN
The market for bottled water is shaping up to be one of the biggest areas of growth in the beverage industry, sparking a price war among the major players.
In some cases, retail prices have been cut by as much as 44 percent.
In 2006, the market for mineral water, including import!s, grew to about 175 million cases, up 70 percent from five years ago.
Analysts expect the market to match that of green tea in 2010. They project that manufacturers will be shipping 260 million cases annually by then. one case consists of six 2-liter bottles.
Suntory Ltd., the market leader with a share of more than 20 percent, is spending 7.5 billion yen to build a plant for its "Natural Mineral Water" series.
The new plant, currently being built at the foot of Mount Daisen in Kofu, Tottori Prefecture, will produce the third of the series, following the successful "From The Minami Alps" and "From The Aso" product titles.
After construction is completed in spring 2008, Suntory will be able to produce 54 million cases of bottled mineral water annually, 40 percent more than before.
But Suntory will not stop there.
"We are constantly looking for a new source of mineral water," said Hirofumi Yamamoto, chief of Suntory's Beverage and Food Division.
Kirin Beverage Corp., which currently has the third-largest share with its "Alkali Ion no Mizu" (Alkali Ion Water), is spending 4-billion yen on new assembly lines at its plant in Gotenba, Shizuoka Prefecture. Overall production capacity is expected to rise to 42 million cases a year.
Asahi Soft Drinks Co., meanwhile, with its share of less than 5 percent, is desperate to improve its performance.
The company's share is growing at a sluggish pace, mainly because it did not enter the price war.
Asahi was confident of the added value of the mineral vanasium in its "Fujisan no Vanasium Tennensui" (Vanasium Natural Water from Mount Fuji).
The company is hurrying to improve the output of its plant in Fujinomiya, Shizuoka Prefecture.
It is also considering the development of a new line of low-priced products.
Meanwhile, the price war continues to intensify.
Although the recommended retail price of a 2-liter bottle is about 230 yen, prices have been known to drop to as low as 130 and 140 yen.
During campaigns, prices will drop to below 100 yen. (IHT/Asahi: August 21,2007)