The annual British Water Cooler Association (BWCA) conference and trade show was held at the Nottingham Belfry on 17 March 2016. Karen Wells, senior commercial consultant at Zenith International, shared the latest figures from the water cooler market with attendees. VI reports
New market research shows continuing positive growth of 1.5% for UK water cooler numbers, the BWCA annual conference heard. Of these, Bottled Water Coolers (BWCs) are up 1.8% whilst Point of Use (POU) coolers have grown by 1.2%. Bottled water sales, meanwhile, have increased by 5% year on year.
The volume split between the two segments of the market continues to be weighted towards bottled water, which now has 53% of units, with 47% of the total number of units being held by POU machines. However, although the POU sector has increased in the past three years to hold nearly 50% of the installed units, in revenue terms its share of market has declined to less than a quarter.
BWCs have seen a slight increase in terms of margin and prices. Water costs and rental values are either stable or slightly increasing. By contrast, Ms Wells commented that, “POU remains cut-throat. The key customers are usually the public sector and so this is a tricky area for companies dealing with their customers’ cost-cutting and head-count reductions. There are large, best price tenders to compete for and so the need to compete on price makes revenue generation ever more difficult in this segment.”
Healthy hydration trend continues
“Consumers have continued to move towards water for regular hydration. We believe that small pack growth has helped fuel the growth of the cooler industry by encouraging regular hydration.” Ms Wells added: “We reported last year that the market is less dependent upon weather as a direct indicator of performance and this trend continues.” In 2013 and 2014 when this apparent trend began, it was difficult to see if this would be a long term pattern as both summers were warm. “By contrast, in 2015, although the summer was poor, the market still grew. It now seems that consumers switching into water because of warm summers has translated into a water habit through the year, regardless of whether the summer weather is warm.”
POU distribution outlets were revealed in the Zenith International data, with offices unsurprisingly taking nearly two thirds (64%) of the POU cooler segment. Institutions were the second largest single category with a 19% share. HORECA stood at 8% and factories at 6%.
BWCA Chairman, John Dundon, welcomed the news about market growth, commenting: “We expected continued growth and it is excellent to see it confirmed. The market expansion was, as predicted, not just a ‘blip’ but a trend.”
Simon Weston, CBE, who gave an inspirational talk on positive thinking and overcoming one’s demons, also addressed conference delegates. Brendan Hanlon from international water aid charity Just a Drop, which the BWCA is supporting this year, explained the importance of the charity’s work to bring clean water to communities worldwide. Over £9000 was raised at the charity auction that took place during the gala dinner following the conference and trade show – enough to help a village install a pump that will provide them with clean, safe water for at least ten years.
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Market data highlights for 2015
- The total market is valued at £123 million, with a 5% revenue growth compared with the previous year.
- After bouncing back last year, the growth in volume and value has continued for bottled water coolers (BWCs) compared with mains-fed (POU) units.
- For health reasons, consumers and employers continue to turn to water for calorie-free hydration.
