Demand for bottled water in Indonesia attracts foreign investment

SINGAPORE - A comparison of Indonesia’s bottled water per capita consumption and its growth rate show that it is currently one of the highest value markets for bottled water. But there is still room for growth, according to the latest research from Mintel, and this is attracting global drinks companies, for whom Asia has recently become a priority.

The research reveals that retail volume growth of bottled water doubled year on year to 2011 - going from 8% in 2010 to 20% in 2011. New product development also reveals an upward curve with regards to consumer demand - with bottled water accounting for just 1% of the overall non-alcoholic drinks market in 2009, to 10% in 2012. Today, one in ten new products launched in the non-alcoholic beverages category in Indonesia is bottled water.

John Forsyth, Global Drinks Analyst at Mintel, said: “A comparison of Indonesia’s bottled water per capita consumption and its growth rate show that it is currently one of the highest value markets for bottled water.  There is also still plenty of room for growth. Not only is the country becoming wealthier but its already high population of around 240 million is expanding rapidly.  As a young country with the majority of people aged 35 and under, a new generation is growing up with different values than their predecessors such as purchasing water in bottles rather than being used to the routine of boiling tap water.

Consumer demand for bottled water, coupled with local expertise in the marketplace backed by increased investment from foreign brands, mean that the stage is set for consumption to grow even further. And there is further good news and opportunity for this market too. Indonesian consumers currently consume 49 litres of bottled water per head – up from just 29 litres per head in 2006 - and Mintel estimates that this will grow to a massive 86 litres per head in 2016.

“Danone, with the help of local knowledge - have established their distribution network, multiple production facilities and reputation as a provider of safe and quality water and is likely to become the springboard with which to introduce more premium variants to the emerging middle classes,” Mr Forsyth added.