What did 2011 bring the Watercooler Industry?

January 17, 2012

The Eastern European water cooler industry saw a period of solid growth in 2010. This growth that took place in many countries of the region indicate that the water cooler industry benefited from both renewed commercial and consumer confidence. Also the record-breaking heatwave of the Summer of 2010 increased consumer demand. 

Did this growth continue in 2011? What did the past year bring us and where do we continue from here?  We met with two European representatives of the sector to get their views on the matter.
Overall there seems to be  an upbeat feeling about last year. “Compared to 2010, 2011 was definitely a positive year for the industry. The HOD business was generally in a strong position across Europe. Between 2010 and 2011 we also noted a major increase in exports of our products outside Europe”, says Krzysztof Glinianowicz, BU Manager at Greif in Poland:

Sergey Tratsevsky from Nestlé Watercoolers in Russia agrees: “Customers started to pay more attention to the quality of the water and to standards of service. This means that our industry needs to deliver on its promises and almost ‘overdeliver’ to exceed expectations.”

Whilst Tratsevsky highlights that “2011 was a very interesting year during which everyone learned that pushing the same button doesn't work anymore” and that  “companies from all industries started to look for new solutions and approaches”, Glinianowicz  stresses  that “the recent French Parliament voting regarding BPA  concerns the industry everywhere”.

In  Eastern Europe, Russia and Poland remained by far the largest bottled water cooler markets in the region, in terms of units and turnover. However, as new and faster expanding markets such as Slovakia and Estonia develop further, they can be expected to reduce the regional dominance of these two markets.

In terms of the future development of the Eastern European markets, Tratsevsky  believes that  “Particularly in Russia the industry will increasingly move  from saturated metropolitan areas to outlying regions and smaller cities. With regard to both the water and the service,  focus should shift from price wars to value-added competition. Supplying  of alternative market routes and the availability and maintenance of a high quality product will be the keys to success.”

For his part, Glinianowicz predicts “a slight market growth in a couple of countries, for example Romania and Russia, and market stabilisation in others such as Poland, the Czech Republic and the Baltic States.”

As to developments in POU and HOD in the region, both gentlemen share very similar views.

“The POU system is less popular in Eastern Europe because of issues relating to tap water quality. While we might see some slight developments in the POU business, it will mainly be based on the present HOD companies deciding to provide both solutions”, says  Glinianowicz.

Tratsevsky points  out that “POU will in my opinion not set foot in Russia as a hydration solution for the next few years,  the main reason being that in most places there are far from perfect tap water conditions. POU filters will simply not be able to guarantee the same consistency and reliable quality of purification at bottle production plants.”

All in all, the outlook is promising. New products, new marketing approaches and  new production solutions combined with attention to market growth and customer requirements and expectations are likely to boost the bottled water industry in general and the water cooler business in particular in the coming year.