Mineral water – water enriched with mineral substances of natural composition, extracted from underground springs, which has a therapeutic effect on the human body.
Ukraine is famous for its mineral water reserves.The mineral water market in Ukraine is characterized by rapid development, despite the crisis phenomena in the country’s economy.This market is very attractive for investors, but the level of competition here is extremely high.
Demand and consumption
The mineral water market continues to grow steadily, primarily due to the popularity of healthy eating and lifestyle trends, deteriorating tap water quality, and record high temperatures during the summer months.
In general, the demand for mineral water is seasonal. The highest demand for mineral water market products, in particular for carbonated and table waters, is observed in the period from May to October. Therapeutic and therapeutic table waters are less subject to seasonal fluctuations in demand.
In recent years (2013-2014), there has been a decrease in demand for strongly carbonated water, on average by 5-7%, and an increase in the level of consumption of non-carbonated or low-carbonated water.
Regarding the volume of consumption, the most popular in the hot period of time remain containers of 0.5-0.7 liters, in the category of carbonated water remains popular bottled water in the volume of 1.5 liters, non-carbonated water is preferably purchased by consumers in the volume of 5-6 liters.
Annually one Ukrainian consumer consumes 39.2 liters of mineral water (both carbonated and non-carbonated). Depending on the type of packaging, domestic consumers prefer plastic containers to glass ones. In addition, one of the influential factors on the consumer’s choice remains the design of water – the shape of the bottle and the design of the label.
Market structure and main producers
Mineral water production in 2014 amounted to 125.6 mln dal. Of these, the share of carbonated water production was 68%, while the share of non-carbonated water was 32%, which is 5.2% more than in 2013.
Mineral water market structure, in shares (%)
The mineral water market in Ukraine has its own peculiarities. In general, domestic consumers are loyal to the products of Ukrainian manufacturers, which offer a wide range of retail products, of good quality and at an affordable price.
The major manufacturers in the market are:
- IDS Group Ukraine (“Morshinskaya”, “Alaska”, “Mirgorodskaya”, “Borjomi”, “Truskavetskaya”);
- Coca-Cola (Bon Aqua TM);
- “Obolon” (“Prozora”, “Obolonska”,);
- “Rosinka” (TM “Sofia Kievskaya”);
- “Erlan” (TM “Dva Okeana”, “Biola”, “Calypso”, “Znamenovskaya”).
Mineral water market in Ukraine – Market shares of main producers, (%)
More than 60% of all mineral water market products are produced by 5 largest producers – IDS Group Ukraine, Coca-Cola, Obolon, Rosinka, Erlan.
Consumer preferences by mineral water brands, (%)
The top three brands are IDS Group Ukraine brands – Morshinska TM (20%), Borjomi (15.4%), Mirgorodskaya (8.2%). Next are such brands as Evian (7.3%), Perrier (5.5%), Polyana Kvasova (4.7%), Essentuki (3.8%), Truskavetskaya (3.7%), Sofia Kievskaya (3.1%).
General trends in the mineral water market
Mineral water production in Ukraine has remained almost at the same level for several years, with annual production growth of 0.2-0.3%. In 2014, 125.6 million dal were produced. According to expert forecasts from 2015 to 2017 the production growth trend will continue and will amount to: 2015 г. – 125.8 mln dal, 2016 – 126.2 mln dal, 2017. – 126.6 million dal.
Forecast of mineral water production in Ukraine:
Export and import of mineral water in Ukraine. Mineral water exports are 4 times lower than imports. In the last 3 years (from 2012 to 2014) there is a tendency of decrease in the volume of exports. One of the main Ukrainian exporters is IDS Group, 80% of exported products are trademarks of this company.
The main importers of the Ukrainian mineral water market are such countries as Georgia, Russia (therapeutic and prophylactic mineral waters), USA, Moldova, Poland. As well as Italy, France (table waters), Switzerland, Canada, etc. Import volumes to Ukraine are increasing annually.
In general, the mineral water market in Ukraine is very promising due to such factors as:
- Market potential. An increasing number of Ukrainians in recent years are concerned about their health and seek to consume quality and healthy products, including drinking water. In this regard, the level of bottled water consumption increases annually.
- Market capacity. More than 77% of Ukrainians consume bottled mineral water. According to experts, the annual growth in consumption will be 15-20%, in the absence of crisis phenomena in the country’s economy and a “collapse” in the incomes of citizens.
- High profitability. The volume of the domestic market of mineral waters in Ukraine is estimated today at 1 bln. dollars. As for the profitability of the market, experts note a figure of 30%.
Summary
The mineral water market in Ukraine is a rapidly growing and promising market. This is primarily due to the low quality of tap water and the popularity of healthy eating and lifestyle trends. The annual consumption of mineral water is 39.2 liters per person. The greatest demand is for bottled water, with a capacity of 0.5-0.7 liters and 1.5 liters in plastic containers. In recent years, there has been a decrease in demand for carbonated water, and an increase in demand for non-carbonated and low-carbonated water.
The production of mineral water is also increasing annually, in 2014 it amounted to 125.6 million dal. Further production growth is forecast for the coming period 2015-2017, provided there is no economic crisis in the country.
The main producers in the market are such companies as IDS Group Ukraine, Coca-Cola, Obolon, Rosinka, Erlan, these companies produce more than 60% of all products in the country.
Stiff competition and high prospects of the market force manufacturers to act actively, the main weapon of competitive struggle remains – water design, bottle and label design.
If you need professional assistance in mineral water design at affordable prices – KOLORO branding agency is at your service.
You can read the market research of the mineral water market of Ukraine for 2012-2013 in our blog.
