The region's bottled water market is exploding

Lee Jamieson discovers the vast potential of the Middle East’s bottled water market

The bottled-water market is exploding across the Middle East on an unprecedented scale. Whilst growth is reported in all countries, it is key GCC markets like the United Arab Emirates, Saudi Arabia and Bahrain that are blazing the trail — an increase of more than a third in bottled-water consumption over the past five years has been reported in these markets by Euromonitor International.

Saudi Arabia alone consumes 1337.4 million litres of bottled water, which is forecast to rise to 1998.7 million litres by 2015. Similarly, consumption in the UAE is forecast to rise from 514.5 million litres of bottled water to 768.1 million litres in the same period.

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Both home-grown bottled water producers and international brands are positioning themselves to profit from the region’s high-volume markets in 2015. On top of the consumption generated in the UAE and Saudi Arabia, Iran is forecast to reach 2421.1 million litres, Algeria 1333.6 million and Syria 1066.3 million, according to figures by Euromonitor International.

Unsurprisingly, competition to become the market leader is stiff in the region.

“In a very short space of time, the bottled water market has become the most competitive market in the Middle East,” explains Fine Waters CEO, Ahmed Ghaly.

“The underlying reason for this is the extraordinary water consumption per person. In the UAE, which is one of the highest in the world, more than 250 litres of bottled water are consumed per person per year.”

A number of contributory factors are behind the region’s phenomenal growth in bottled water: an exploding population, high disposable income, easy market access for suppliers, a rise in health awareness thus shifting consumers from tap to mineral water, a thriving expatriate community and a fast-expanding hotel and F&B scene. These factors have converged to create a “perfect storm” for the region’s water suppliers.

This translates into a valuable market — in Saudi Arabia alone, the constant value sales of bottled water are projected to reach SR 3.2 billion by 2014, according to Euromonitor International.

“Naturally, we’ve seen a plethora of companies enter the market,” continues Ghaly. “Many of them prematurely — and many lacking a basic understanding of local market dynamics.

In Dubai alone, there are over 1500 different brands inclusive of different sizes registered with the Dubai Municipality. This figure does not include local water companies.

“The F&B market is therefore spoilt for choice and the offers being made are the most competitive in the Middle East.”