Water Treatment Systems for Bottled Water, Ice Making and POU Markets

Report Highlights

• Total U.S. sales of water treatment systems for bottled water, ice making and point-of-use markets was estimated to be nearly $1.5 billion in 2001.
• Growing at an average annual rate (AAGR) of 8.7%, this market is expected to reach $2.25 billion in 2006.
• Systems for residential purification and softening make up the largest segment, 65% and are growing at an AAGR of 9.2%.
• Systems for commercial ice making will rise the fastest, from $93 million in 2001 to $188 million in 2006, at an AAGR of 15.1%.
• Bottled water systems will climb at an AAGR of 6% to $566 million in 2006, but will drop from 29% to 25% in market share, while bottled water sales themselves, continue as a significant consumer boom industry.
• Filtration products should continue to account for 12.5% to 14% of all dollar shipments and 61% to 63% of all unit shipments.

INTRODUCTION

STUDY GOALS AND OBJECTIVES

For more than a generation, concern over the quality of water has been growing. Consumers, es, and eventually governments have expressed this concern. The combination of normal market forces and (more recently) regulation has been propelling the entire water treatment market. This study examines the forces driving the product and end-use consumer water treatment markets. Forecasts for these markets and the reasons for the forecasts then have been developed.

REASONS FOR THE STUDY

The primary reason for doing this study is to provide a comprehensive source on certain point of use/point of entry water (POU/POE) treatment markets. Of particular interest, home water treatment filtration units are showing tremendous growth. This report examines the reasons behind this, examines the variety of home filtration units available (including point-of-use [POU] and point-of-entry [POE] products), and discusses the possibility of future growth.

The other POU/POE applications for water treatment technologies covered in this report include water purification for the booming bottled water industry and the much smaller packaged ice industry--significant because of its growth. Although some of these applications are mature, they are all showing average annual growth above GNP growth because of increasing government regulation and increasing public concern over the water supply.

Three trends, not all directly related to each other, are occurring concurrently:

• The amount of pollution in the air, water, and soil is increasing.
• Legislative efforts to control the pollution are continuing.

• There is a growing health trend making people more conscious of the food and water they consume, the need to exercise, etc.

This study analyzes the combined impact of these three trends in the U.S. on the consumer water treatment products and markets defined below. These items are products designed to help individuals purify their own water. This analysis also includes the role of water treatment authorities and

• The numerous laws and regulations on the books of many state and local governments. Included is the relatively low degree of uniformity amongst the standards set by these authorities.
• The fact that most water is physically different from most other water. This even applies to water drawn from different parts of the same source.
• The fact that any given user is likely to want water different from--or at least treated differently than--that of other users.
• The questionable claims and practices that continue to hurt the products under study here.
• The impact of what is likely to be slow economic growth ahead. This includes a slowing in building and construction. Demographic trends play a role in this as well.

STUDY RATIONAL

This study offers a look at specific water treatment markets including residential, bottled water, and packaged ice industries. It includes discussions on technology and companies, in addition to the forecasts by product market and by end-use market. Also, this study draws certain conclusions that are the result of analyzing the above mentioned trends.

SCOPE AND FORMAT

This in-depth study analyzes and forecasts the U.S. product and end-use markets for water treatment products used in three main segments: bottled water, commercial icemaking, and residential softening and drinking water.

METHOD USED TO PREPARE THIS REPORT

Forecast methods include standard statistical techniques such as simple linear regression and the analysis of numerical trends, growth rates, and ratios. The final forecasts represent an integration of these quantitative results, the literature review, and the interviews.

Market data relate to shipments measured in both current value (i.e., unadjusted for inflation) and in units. The units provide a real (or inflation-adjusted) measure. The average price or cost is the estimated cost for the manufacturer. This estimate should eliminate most "add-ons" such as freight, advertising, etc. The result should be a better picture of the actual dollar value of products shipped to market. Since products are grouped together with the original product and the aftermarket repair and replacement parts, there is some distortion in the average prices. Most parts are relatively inexpensive. This is partially offset by the higher price of the fewer new units.