Israel, one of the world's most developed water cooler markets, has recently witnessed an intensified battle between bottled water coolers and point of use coolers (POU), according to leading drinks consultancy and water cooler market experts Zenith International. The rival factions in Israel's cooler industry have taken competition to a new level, as both sectors struggle to counter the effects of economic recession and political instability.
Israel's bottled water cooler market has barely seen any growth during 2003 and is expected to close the year up by less than 1 per cent in unit terms at 214,000 coolers. POU coolers, utilising mains fed rather than bottled water, have advanced more aggressively thanks to lower costs and lower barriers to entry and are heading for a rise of 11 per cent to 129,000 units.
"Given the social and political climate in the surrounding region, it is not surprising that bottled water and POU coolers have flourished in Israel since they were first introduced in the second half of the 1980s," said Zenith research director Gary Roethenbaugh. "A sharp increase in retail bottled water sales since 2000 demonstrates a clear consumer preference for quality water.
"However, very low retail prices have placed considerable pressure on coolers. Bottled water coolers also face fierce competition from POU, causing the leading players to focus on promoting their source of origin."
Both bottled and POU coolers offer convenience and trust to consumers, providing chilled water without the need for a high frequency of journeys and purchases. In each sector, the commercial customer opportunity is now said to be all but saturated. Consequently distributors have increasingly shifted their attention to domestic customers and these now represent a significant proportion of the total.
The two sectors are also markedly more developed than in West Europe. Bottled water coolers have reached 33 units per thousand population in Israel, almost ten times the average in West Europe. Similarly, the Israeli POU market now amounts to 20 units per thousand population, far beyond the 0.4 unit average of West Europe.
"The Israeli cooler industry is dominated by three names in particular," said Roethenbaugh. "Bottled water coolers by Mayanot Eden and Neviot - Nature of Galilee, POU by Tana Water. Their combined 78 per cent unit share suggests there is further consolidation to come for less developed cooler markets. Despite disappointing results for 2003, all Israeli players across both sectors can look forward to improved growth prospects, boosted further when the country's economy recovers."
The total number of private residences in Israel indicates that only one tenth are currently equipped with a bottled or POU unit. Zenith predicts the industry will reach almost 430,000 units by 2008, 100,000 more than in 2002, with POU increasing its share to 46 per cent.
The 2003 Zenith report on Israel bottled water coolers and point of use contains 24 market tables and charts, 15 company profiles and a detailed market commentary. For further details, e-mail zenithinternational.