Mineral water brands are looking for something extra

After the dynamic growth of former years the mineral water market seems to have become saturated: its size is around 1 billion litres a year – this means an annual per capita consumption of 100 litres.

Levente Balogh, owner-managing director of Szentkirályi Mineral Water Kft. reckons that shoppers are absolutely promotion-sensitive, but in the case of premium brands it isn’t the price but well-visible displaying that influences them the most. Private label products share from volume sales is around 60 percent, which obviously makes premium brands have 40-percent share; in value the ratio is the other way round. Private label and low-priced mineral waters are responsible for more than 50 percent of sales in the market, consumers still look at the price first when buying and put higher-priced products in their baskets mostly during promotions – we learned from Judit Balárdi, brand manager of Kékkúti Mineral Water Zrt. She added that according to Nielsen data, discounters strengthened their position. Krisztina Kozák, marketing manager with Magyarvíz Kft. told Trade magazin that the two-digit growth in sales in the first quarter of 2014 was primarily generated by private label products. Still mineral water sales grew a little to the detriment of carbonated varieties. Zoltán Herjeczki, Fonyódi Mineral Water Kft.’s sales and marketing director informed us that flavoured water sales skyrocketed: they were 60 percent higher than in 2012! The majority of products is still sold in hypermarkets. Adrienn Horváth, the marketing manager of Aquarius-Aqua Kft. revealed that the company’s research found, mineral water’s biggest advantage is that people think of it as a natural product and they like the fact that a wide selection of waters is available; their only negative feeling concerns bottles, because of environmental and storage reasons. Nárcisz Csákabonyi, managing director of Fonte Viva Kft., added that due to the economic recession the price/value ratio became even more important than before. Consequently, a differentiation process started among PL products: some retail chains started building brands from quality ‘private label’ products, which now compete with premium category manufacturer brands. Consumers still like 1.5-litre mineral waters the most, these products realise three quarters of total mineral water sales (in litre) – we got to know from Éva Buru, public affairs and communications director of Coca-Cola Hungary. Szentkirályi believes in the power of marketing communication when it comes to calling consumers’ attention to the quality offered by the premium brand; their experience is that POS marketing tools are worth using too. Magyarvíz Kft.’s sales expanded by 21 percent last year and Mizse became the second most well-known and the second biggest selling brand in the market. In September they will come out with flavoured waters and still Primavera will be distributed in unique Easy bottles: these light bottles can be manufactured with 30 percent lower CO2 emission. This year Magyarvíz put QR codes on product labels. In 2013 Aquarius-Aqua Kft. sold more than 500 million litres of mineral water. In the last 10 years the company reduced the weight of their bottles by 50 percent. They would like to increase the proportion of raw material from recycled PET waste used in production. Fonyódi Mineral Water redesigned its products’ packaging to give them a colourful and happy new look, and switched from 0.5-litre to 0.75-litre bottles. With their Jana brand they communicate a healthy lifestyle and the importance of water consumption, while with Fonyódi they focus on price: by financing promotions they can fight with private label products. Fonte Viva Kft. will soon launch the flavoured versions of FONTE LIBRA. The Fonte Libra brand was introduced last year and it is positioned as a family brand; the different characters in the Libra product family try to stand out from the crowd and appeal to consumers. One of Kékkúti Mineral Water Zrt.’s strengths is that it offers a wide range of products. In addition to domestically bottled Theodora and Nestlé Aquarel, the company distributes Perrier, S. Pellegrino and Acqua Panna natural mineral waters and San Pellegrino carbonated fruit drinks as well. They have been reducing the weight of Theodora and Nestlé Aquarel products’ PET bottles and caps since 2009. With its premium brands the company primarily targets the HORECA channel and events, but they can also be found in a growing number of retail chains.