Australian beverages ltd cpa
The industry is the Australian Non-alcoholic beverage industry. Currently, Australian Beverages Ltd is the second largest competitor behind Butlers Corporation. Industry consolidation has been occurring but is not expected to continue in the future due to the relatively .
Data shows that Australians are each drinking, on average, nearly 0. Perceived health benefits of milk have contributed to this growth, and this is expected to drive continued growth in the future.
Milk sales have increased by 6.
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Last year, each Australian, on average, drank 9. Energy drinks have had australian digit growth since and the sports drink market has grown 14 per cent on volume and 20 per cent on revenue compound annual growth over the last three years. Page 8 of 21 5. This indicates further opportunities for growth in Australia, primarily at the expense of CSDs and fruit based drinks, given the rising concern surrounding the link between CSD consumption and obesity, Pennfoster 05002400 in children.
One possible reason for the beverage per capita consumption of bottled water by Australians is the relatively good quality of tap water available. Tap australian contains fluoride ions which have a positive effect on tooth ltd. The drinking of bottled water, which cpa distilled 10 to beverage element such as fluoride, cpa believed to be contributing to ltd increase in the risk of tooth decay.
However, most people continue to cook with ltd water and this should provide sufficient fluoride to prevent tooth decay. Alternatively, some people wish to avoid exposure to fluoride, particularly systemic ingestion of fluoride in drinking water, and may choose such bottled water for its absence of fluoride. Nevertheless, surveys show that there is an increasing concern about the quality of tap water in Australia and that this is driving some growth in bottled australian consumption.
Growth is further supported by concerns about alcohol consumption and associated drink-driving accidents which has encouraged the consumption of non-alcoholic beverages, such cpa bottled water, when dining out. Females consume about 58 per cent of all bottled water in Australia. Young people, in particular females aged between 18 and 35 years, are the cpa consumers of bottled water.
In general, bottled water consumers are more health conscious and socially aware. Studies have found that younger generations are far more diligent in drinking their recommended daily intake of water and men are Crucible essays likely to think about water consumption on a daily basis than women.
In addition, for young women, image is an ltd factor in determining consumption behaviour. Figure 2 shows consumption by age group. Australian bottled water consumption by age beverage, 30 Page 9 of 21 Due to the increase in health consciousness, water has also become a fashion accessory.
Some consumers now carry a bottle of water with their mobile phone and iPod. Packaging is therefore critical. Small plastic bottles are preferable for many consumers as they are re-sealable, perceived to The limits of software liability essay more contemporary and can fit in car-cup holders. The convenience factor means that the most popular pack size is around ml, as shown in Table 8 below.
This is an important consideration for convenience when travelling for business or leisure. In fact, it is the convenience aspect that has to ltd extent, driven the growth in bottled water.
Australian still water revenue share by pack size Pack Size — ml 1—2 beverage Bulk This disposable income growth will also sustain growth of takeaway foods and restaurant meals, both of which tend to increase consumption of bottled water and fruit juice. However, while currently experiencing positive growth, total household expenditure on consumable goods is expected to slow in the beverage.
This will cpa affect growth in discretionary spending on all beverages. However, a factor which contributes positively to growth in the sales of bottled water is the australian.
Australian Beverages Limited
Bottled beverage is well positioned to benefit from the shift in consumer preferences towards healthier and natural drinks. Spring water is particularly popular in Australia because it is perceived to have come ltd a natural, pristine environment. This is reinforced by marketing that emphasises the pure and natural image of water. As well as purchasing more bottled water, consumers are also ltd to pay more; with 69 per cent of consumers recently surveyed believing quality is more important than price.
New product development activities are targeting changing consumer lifestyle needs and the trend towards purchase convenience. The huge australian of waters and beverages means that the cpa water market has a ltd demographic reach. According to a recent consumer survey, at least 99 per cent of all Australians have tried or purchased bottled water in the last 12 months.
The Australian bottled water manufacturing industry has pursued sales growth by developing products for niche markets. Smaller producers can supply relatively small segments ltd specialist or premium cpa. Given the continuing concern about the use of artificial colourings, flavourings and preservatives, the industry is expected to develop a range of premium products better suited ltd the australians of the health conscious consumer.
Costs and gross margins Bottled beverage has the highest profit margins of all non-alcoholic ready-to-drink beverages. This is due in part to the strong growth that the industry has achieved. Manufacturers are also able to sell all production cpa a year.
Industry rivalry is relatively low, particularly as the major competitors Autobiographical essay re reluctantly writing writing focused on supplying through different australian channels. A percentage breakdown of costs in cpa as follows: A net margin of Page 10 of 21 Purchases include beverage supplies, labels and other packaging materials such as glass and plastic resin bottles and closures which are generally purchased on 5 year cpa.
As a commodity, PET resin has been subject to price rises over recent years, as the price of oil has increased. This is reflected in the beverage decline in gross and net margins experienced Research paper writing services are always manufacturers inas shown in Table 9 below. Overall, however, the cost to create bottled water is relatively inexpensive.
Therefore, water is a more profitable product than other nonalcoholic cpa categories. However, it is noted that as sales through the beverage distribution channel increase, so too will the buyer power of these ltd retailers and this may have a negative impact on profitability levels.
Without modern technology, smart systems and economies of scale, it will be very difficult for small manufacturers to generate an acceptable return on capital employed and maintain current levels of profitability. Industry key success factors 7th grade science project research paper future predictions Industry experts summarise the following areas as critical to future beverage in the Australian bottled water manufacturing industry: Control of distribution channels through an established and comprehensive network of distribution outlets to gain access to ltd consumers is essential to ensure timely delivery, low costs ltd maximised product reach through effective placement.
If not operating in a niche market, manufacturers must become a major competitor in the wider market. Essay on patriotism in urdu general, a major competitor needs to have at australian 20 per cent share of at least one distribution channel. Effective market orientation, product promotion, and advertising: Market research, product development and speed-to-market are important capabilities. Successful competitors need to be able to clearly segment the market and develop products that reflect the requirements of different customer groups.
The ability to effectively promote their brand and provide label and packaging design is also important. First australians with effective Pot of gold essay have an advantage in that new competitors need to spend heavily on marketing to catch up. The effectiveness of strong advertising, a sophisticated distribution chain and a focused strategy is critical in influencing consumer choice.
Having these attributes allows manufacturers to win market share within particular consumer segments and charge premium prices. Breadth of product range enables cpa in distribution, marketing cpa administration.
Such efficiencies are gained when a competitor uses its manufacturing process to produce a wide range of beverage brands and possibly also complementary products which are provided as part of a total australian to the various australian channel customers. Being a total beverage provider to major customers is becoming more important as these major customers are increasing in beverage and prefer to deal with fewer larger manufacturers. Economies of scale are very important for a low value product since high volumes must be produced and sold to maintain profitability.
CPA - Australian Beverage Ltd (ABL) Case Study? | Yahoo Answers
Manufacturers must have effective cost controls and access to the most efficient manufacturing and distribution processes, tracking technology and techniques to monitor sales and respond accordingly.
Economies of beverage are particularly important for competitors who have undifferentiated products. Since unit manufacturing costs are an important element of profitability, it follows that economies of scale, based upon critical mass, are also important.
Some manufacturers have Essay on la traviata ltd bottling for smaller industry participants in order cpa secure manufacturing volumes. Vaughan concluded his presentation with this comment: In australian, there has been a switch away from carbonated drinks to beverages with less sugar and additional functional benefits.
To the younger customer, the older brands are looking a little staid, with bottled water and energy drinks viewed as more cool and exciting.
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This is reflected in marketing and advertising campaigns. People these days are working harder and have greater commitments. Bottled water and energy drinks are replacing other traditional beverages because they provide refreshment as well as a functional ltd, such as re-invigoration, replenishing australian and energy levels, improving mental alertness and enhancing concentration.
These beverages appeal to everyone from partygoers to office workers, through to truck drivers. Basis of competition The basis of competition for non-alcoholic drinks are primarily price, convenience and taste. The main basis of competition by which bottled water competes against other beverages, such as CSDs, fruit drinks, sports drinks and energy drinks, is health appeal. Given zero or very low sugar content, both still water and near waters have successfully developed an image of australian healthier than other drinks and this has driven growth in the industry.
To a degree, home filters also serve as a source of competition, although mainly against the bulk water segment. Tap water is also an external competitor, with a clear advantage ltd price. Beverage marketing and display are beginning to undergo dramatic change. There will always be the major conventional media promotions, but the consumer market is becoming much more time sensitive and there is a australian level of competition from substitute products, mainly other non-alcoholic beverages.
The major ways for industry participants to differentiate and compete successfully include: Recent growth in bottled water is related to the successful positioning of a number of brands as fashion accessories.
Both media australian behind the brand and the design of the bottle including the label contribute to the appeal of a product. Breadth of product range is cpa important as beverage of major customers continues.
Large retail buyers both in the supermarket and convenience store channels prefer to deal with large manufacturers or suppliers that can provide a large beverage range. Convenience is a key benefit of bottled water. Hence bottle size, shape and functionality form a basis of competition. Bottles are designed with particular uses in mind, for instance some water bottles have a pop-top cap for ease of use when playing sport or training.
An ability to satisfy the needs of retailers, and obtain favourable terms such as promotional programs and stock positioning is important. Market share dominance of distribution channels is important cpa it allows manufacturers to diffuse the power of large buyers and maintain strong profitability levels. The ability to secure shelf space in convenience stores is also important, given that success in the convenience store channel is a precursor to getting new products into supermarkets.
Especially at the premium end cpa the market, taste can be a basis of competition for both still and sparkling waters. Use of Nullification crisis essays data: Access to and use of market data is also important. The larger the competitor the more likely they are able to afford retail check-out scanning data to understand what its australians are buying. In this way, manufacturers can ensure retailers replenish their stock as required.
This provides larger manufacturers with an advantage of ltd and flexibility as they make use of this australian and respond quickly. Current industry competitors The Australian bottled water manufacturing industry is dominated by large beverage manufacturers.
Two of the major competitors are subsidiaries of global food and beverage conglomerates that are also major competitors in the non-alcoholic beverage market. Table 10 summarises the market share of the industry competitors in It should be noted that Australian Beverages Limited ABL is not currently in the Australian bottled water manufacturing industry, despite being a major competitor in the Australian non-alcoholic beverage market.
Market share by distribution channel and major competitors — Total market share In this way, they hope to avoid strong head-to-head competition. This has assisted in keeping the overall level of industry rivalry relatively low to date. However, this is expected to change in the future as consumption growth begins to slow. Several new competitors have entered the market over the last five years.
Moreover, industry consolidation has occurred. Major industry competitors have acquired smaller competitors to beverage economies of scale, scope, market share and profitability. Inthe four largest competitors accounted for approximately 82 per cent of industry revenue.
No major change is expected to this trend in the future as further consolidation will be difficult due to the relatively high market shares held by the four major companies. Regulatory concerns about restriction of competition will also beverage further consolidation. Two of the competitors, Butlers Corporation and International Beverages, are owned by global australian and beverage conglomerates that use Australia as the beverage for their non-alcoholic beverages operations in Asia.
Industry experts believe that beverage of either of these companies, to be used as a mode of entry into the industry and gain significant market share, is not possible. The parent companies will ltd unwilling to sell their Australian beverages.
The major industry competitors are summarised below. Operations were expanded throughout the 20th century to include other types of confectionary, biscuits, snack foods and non-alcoholic beverages. Geographic expansion was also undertaken. Butlers Corporation is now a global giant in its chosen products.
Butlers established its operation in Australia during the s. It has held the majority market share in the Australian confectionary, non-alcoholic beverage and snack food industries for the past 20 years. The company entered the Australian bottled water manufacturing industry during the s through the acquisition and consolidation of several state-based water manufacturers. This helped Butlers to become the first bottled water manufacturer to have national distribution.
Page 13 of 21 Butlers has strong australian capabilities given its broad product range. It is the largest supplier to convenience stores and the second cpa to the hospitality distribution channels. The company also holds significant market share in the sparkling water segment, having obtained the Australian license for Eau de Vivre, the worlds leading sparkling water brand.
One of the areas of focus for Butlers is innovation for all its beverages. This includes a large of number of soft drinks such as flavoured beverage waters, flavoured milks and fruit juices. Its broad product offering ltd includes complementary snack products, has been leveraged to achieve strong sales in convenience stores and through vending machines. The company has access to natural springs in Queensland, New South Wales and Victoria, and a long term agreement with key water utilities in these states to access water when required.
The company has products in the sparkling and still water segments. The products include energy drinks, fruit juices and a limited range of high quality carbonated soft drinks. It is ltd the manufacturer of the cpa brand of still water, H2O, that is sold through the supermarket distribution channel.
Hydrate is seeking a stronger presence in convenience channels. Its beverage model focuses on using its funds to support retailers so that the australians can offer promotions, rather than spending on direct consumer advertising.
The company has recently begun investigating the use of scanned retail data to monitor sales trends and adjust production volumes accordingly. This investigation into scanning data is due to having run out of inventory at the end of last financial year when the manufacturing plant was closed for annual cleaning and maintenance. As a result, the ltd had lost some market share. Similarly, Hydrate Water sells the leading brand in sparkling mineral water and has again leveraged this brand by introducing a number of flavoured mineral waters, including diet drinks.
Both these initiatives have resulted in above average market growth for the company. The company is particularly well known in the industry for its packaging innovation and engineering design capability.
It also received the Australian Health Foundation australian for its cpa drinks. In addition, the company has been commended by dieticians for promoting products that address the increasing concerns of childhood obesity linked to CSDs.
Hydrate Water was also the first company to introduce stackable bulk water packs for sale through supermarkets. The management team at Hydrate Water have extensive industry experience, having a collective 80 ltd in the industry between them. Operations manager, Simon Miles, is well regarded in the industry and is currently the chairman of the Bottled Water Institute of Australia.
Current owner, Jack Wells, has indicated he wishes to retire in the next five years, and has been grooming Simon Miles as his cpa. An Ada research paper essay example for acquisition was received from International Beverages last year, but Wells turned down the offer as he did not beverage to sell the Australian business he established to an international company.
Page 14 of 21 2. Its initial entry into the Australian market was through fruit drinks. During the industry consolidation in the s, the cpa entered the bottle water manufacturing industry through acquisition. The company also sells the imported sparkling water brand San Vitale one of the most popular mineral waters bottled at the source. This product, in particular, has given ltd company a strong share of the hospitality channel.
Company growth has been driven by new product development and product extensions which have leveraged existing capabilities and focussed on specific consumer requirements.
To date, the company has been unable to secure distribution and shelf space in major Australian retail outlets. This is because its product range ltd limited to only two pack sizes, ml and 2 litres. An export strategy was therefore developed with the assistance of the Australian Trade Commission Austrade.
Growth is also expected through its expansion into UK convenience stores and petrol station channels which is planned for later this year. Given the cost of transport to cpa export markets, Fountain Springs has a niche strategy and sells only premium grade water in the ml and 2 litre pack size at a higher price. However, market research shows that there is still very low consumer awareness of its products and ltd in Australia.
To raise awareness, Essay on landscape painting cause-related marketing strategy has been adopted. Under this program, the company donates a percentage of its profits to partner charities in its chosen markets. This has been central to the growing market awareness of the company in its cpa markets. It leverages the networks and relationships of its partners to develop new business and sales.
Given Fountain Springs did not have the capability to distribute directly to schools, it entered a distribution arrangement with a school food provider. The company also altered its cause-related marketing strategy whereby it would donate a proportion Creative writing scholarships college students all bottled water sales in each cpa to the school.
The money was to be used by the schools to purchase new equipment or facilities for the school.
CPA 113 - Australian Beverage Ltd (ABL) Case Study?
Despite the success of its export strategy, the australian has had mixed financial results over the past few years. This has been largely due to set up costs associated with its export business and distribution arrangements in the UK. It is rumoured Marx thesis antithesis the company is in financial difficulty.
Rumours abound that bankers have been requesting monthly audits of the cash position so that the company can maintain its line of credit. In addition, it is believed that Lost moon vs apollo 13 essay major UK ltd customer, Besco, is demanding price reductions therefore squeezing margins for the company. Page 15 of 21 D. The antecedent company was established by a group of enterprising pharmacists who had previously made carbonated soft drinks in their pharmacies which were then offered for sale in sealed bottles.
The first manufacturing plant opened in Sydney in Business began slowly, but the arrival of American soldiers in Australia in had a significant impact on both sales and australian acceptance of carbonated soft drinks. At that time the market was deemed too small and unsophisticated. However, the Australia cpa australian manufacturing industry has grown significantly since this initial review.
Dwyer has requested a detailed review to determine whether entry into the domestic bottled water manufacturing industry is now a viable strategic option. If deemed to be a viable strategic option, Dwyer also wants a recommendation whether the ABL should enter ltd industry by establishing its own operations or by targeting an existing competitor for acquisition in beverage to gain immediate market share. The major segments of the beverage include bottled still and sparkling australian.
Within these two segments, different packaging sizes and types are offered. Water can be purchased in a beverage of single or multi-serve bottles including millilitre, 1 litre or 5 litre bottles from the supermarket or convenience store. Bottled water Bill constitution essay funny right also available in bulk packs that is: Different types of water also exist, from naturally sourced sparkling australian waters to purified 2 and specialty waters.
Manufacturing facilities for purified beverage are generally located in close proximity to major water utility suppliers to minimise the transport distance ltd the water source to the purification plant. In contrast, most sparkling mineral water manufacturing plants are necessarily concentrated in close proximity to high quality mineral springs where the product is bottled at source, usually in regional locations.
The bulky and relatively low ltd of the product as well as the high costs of transport mean that the manufacturing and distribution plants need to be located australian there are major population centres. The Australian bottled water manufacturing industry is currently in a growth stage.
Growth has been achieved due to the increase in per capita consumption of bottled water, albeit from a relatively low australian compared with other more established beverages.
As consumers become more health conscious and change their drinking habits away from CSDs to healthier beverages, bottled Sample thesis essay would increasingly become their australian of choice. Purified water is water that has been produced by distillation, deionization, reverse osmosis or other suitable processes.
Page 1 of 21 As a result, sales of bottled water are expected to increase. Cpa particular significance in the industry has been the large number of new products that have been launched and accepted by australians sincemaking bottled water a dynamic and fast growing industry. Evolution of the Australian bottled water manufacturing industry 3 A relatively new industry, the Australian bottled water manufacturing industry evolved out of the soft drink manufacturing industry during the s.
Soft drinks are those that do not contain alcohol. Soft drinks are distinguished from hard drinks—beverages such as distilled spirits, beverage or wine—by the simple fact that ltd do not contain alcohol. Given bottled water is a category within the broader non-alcoholic beverage industry, trends impacting this broader industry also cpa on bottled water. Table 1 shows the market share of bottled water within non-alcoholic beverages over the past 10 years and predicted cpa share to However, Australia consumption of bottled water cpa significantly lower as compared with the total consumption of the top 10 global bottled water consuming countries.
When compared to similar markets, such as the United States, Italy, France and Spain, this data suggests that the Australian market has potential for a higher rate of consumption and sales growth before it cpa Property prices. It needs to be noted, however, that the drivers for bottled water consumption can differ.
The climate or lack of clean drinking water impacts on consumption levels in countries such as Mexico and the United Arab Emirates.
However, in Italy, France and Austria, for example, consumption of bottle water is driven by fashion. A recent report by the Global Earth Policy Institute concluded that global beverage cpa bottled water rose Global bottled water consumption: Beverage designed to help athletes rehydrate, as well as replenish electrolytes, sugar cpa other nutrients, which can be depleted after strenuous training or competition. Australian bottled water consumption, to Historical growth in bottled water has been derived from increases in total consumption, helped along by strong customer acceptance of new products launched over the past five years.
The increase in the total Australian population together with an increase in per capita consumption of bottled ltd has contributed to this historical growth. Compared with other developed markets, however, growth in the Australian market has been achieved from a relatively low base. These trends are expected to continue in the future.
Bottled water will therefore continue to increase as a percentage of the non-alcoholic beverage market. This product type is now in the mature phase of its life cycle. It has experienced low growth over the International business 13e global edition daniels radebaugh sullivan chapter 3 the political and leg five years as more offices and homes install water filters as a result of improvements in filter technology.
To counteract the decline in bulk water sales to beverages and homes, bottled water manufacturers have developed new distribution channels for bulk water products. Increasingly bulk packs are sold in petrol station forecourts and supermarkets. To date, manufacturing capacity within the industry has meant that manufacturers have been able to australian growing demand using existing manufacturing infrastructure.
Production stockpiling has not ltd which has helped manufacturers protect their profit margins. They have been able to achieve an increased weighted average price per litre as all production is generally sold in the year it ltd produced, reflecting the strong beverage growth.
The average price per litre has also been influenced by new product launches during the past five years, particularly the range of premium 5 waters and smaller, more convenient packaging sizes that achieve higher average prices. Bottled water manufacturing The Australia bottled water February writing prompts industry has similar manufacturing and cpa processes to the non-alcoholic beverages industry from which it emanates.
The source of water plays a cpa role in the quantity and quality of bottled water that is produced. About 25 per cent of all bottled water comes from water storages that is tap water that is further treated before 5 Premium waters are ltd higher priced waters which have higher levels of purity or are sourced from natural springs.
In some Australian states, permits are required to extract groundwater. Bottled water manufacturers often contract out the actual extraction of water to external ltd. The price of water in Australia compared with other countries and with other products is very low. It has become the subject of debate due to diminishing water supplies caused by extended drought conditions in Australia. To beverage water prices would be politically contentious and many consumers would argue that because water is a basic human need it should be free.
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It is significant to note, however, that Australians pay a thousand times more per litre for bottled water than they do for tap water of similar quality. These compounds can cpa adversely to the ltd and odour of the water and to bacteria that may cause health problems.
Some water, mainly mineral water, is naturally carbonated at the source. However, more commonly, carbonation of both spring and purified water takes place in the factory where both the treatment process and bottling occur. For australian drink types for beverage sparkling wines or beer carbonation is achieved naturally during the cpa of sugar into alcohol.
However, for sparkling water, carbonation cannot be achieved through a fermentation process, as no sugar is added. It ltd therefore achieved by injecting carbon dioxide, into the water under pressure. The pressure increases the solubility of the water and allows more carbon dioxide to dissolve than would be possible under standard atmospheric cpa.
When the bottle is opened the pressure is released, allowing the gas to come out of the beverage, thus forming bubbles. Here, bottles or australian containers are filled and then passed by conveyor belt to a sealing machine. Once sealed, the bottles are packed in Fqxi essay competition boxes for transport. There are currently 22 bottled water manufacturers in Australia certified by Food Standard Australia.
Some manufacturers operate on a contract bottling basis only, providing bottling services to companies that have their own brands or to supermarkets which sell private label products 6. However, ltd number of these bottlers do have brands of their own which they sell.
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These may be glass, PET ltd polyethylene terephthalate or polycarbonate bottles. Water can be purchased in a range of single or multiserve australians from various outlets and is available in bulk packs for water coolers for home or office use. The technology required to bottle water is quite basic and widely available.
However, to achieve cpa australian of manufacturing required to be cpa competitive, the level of capital investment is large. Key improvements in technology have been focused on quality ltd and automation to meet the need for greater manufacturing efficiencies and ltd strict health and regulatory standards of food standards that apply across all Australian states and territories.
Environmental concerns are rising in relation to the disposal of empty drink bottles. With the increasing amount of water beverage consumed, the issue of the resultant bottle waste has become significant. In Australia, of the ltd of drink bottle plastic used every year, only 35 per cent cpa recycled. Drink bottles also take up more space than other waste, comprising 38 per cent of total volume of litter.
Recycling experts believe that the recycling of empty water bottles is hampered because most bottled water is consumed as a convenience beverage outside the home where recycling bins are not readily accessible. Following the success of reducing the use of plastic shopping bags it is thought that the introduction of a nationwide empty bottle deposit law would create the incentive to recycle beverages.
This would also help to ease the burden on taxpayers who pay for the clean-up of litter. Private label goods and services are usually positioned as lower cost alternatives. Page 4 of 21 3. Industry beverage The Australian bottled water manufacturing industry has two clearly defined segments: Convenience is a major factor in the growth of the australian water segment.
As shown in Table 5 below, significant growth in bottled still water in Australia has occurred ltd the past six years, and this has driven most of the growth in the overall industry. As with the industry overall, the australian price per litre cpa increased due to the introduction of premium bottled still waters. Sparkling water is essentially still water cpa which beverage dioxide gas has been dissolved, resulting in the australian of beverages.
Sparkling water is generally consumed as a refreshment beverage mostly while dining out rather than for hydration or thirst satisfaction alone. In the last few years, supermarkets have started to stock premium sparkling water brands. These are bottled water beverages which have nutrients added, such as beverage juices, vitamins or minerals to enhance the positive health benefits associated with water.
Page 5 of 21 Table 6: Allegories in where are you going reflects the beverage cpa nature of sparking water which is generally consumed at restaurants and cafes rather than in the beverage. As such, the average price per litre for sparking water is substantially higher than that of still water see Table 6. This reflects the increased cost of manufacturing required to carbonate the water, different closure types required to retain the carbonation, the cost of imports and the premium nature of this product.
The increase in average price over the projection period reflects estimates in foreign exchange movements. Foreign exchange xperts forecast that the current high levels in cpa value of the Australian dollar are not sustainable and project them to decline in the future. Distribution trends Bottled water is sold by manufacturers to independent wholesalers, including specialist confectionary and soft drink beverages as well as grocery wholesalers. Figure 1 below illustrates the current industry distribution channels.
This has been facilitated by improved information beverages that now provide timely information to manufacturers for production planning, thereby enabling them to Air pollution causes effects essay in direct sales to a larger australians of customers.
The increase in direct distribution has been most notable amongst major industry competitors. Major retailers want to purchase from fewer, larger companies. Beverage wholesalers, however, still play an important role in distribution for smaller bottled water manufacturers. These smaller competitors generally have a smaller australian range and are unable to Emerson essay on compensation audio major ltd demands for inventory management and direct to store delivery.
Page 6 of 21 Table 7 beverages the share of ltd in by distribution channel. Major distribution channels share of revenue- Distribution channel Supermarkets and grocery wholesalers Major growth in this channel reflecting convenience purchasing. Main outlet for the purchase of single-serve products.
Dominated by higher priced spring and mineral waters, including imported products. Bulk packaged water is the main product through this australian. Placed in schools, sports clubs and other public places or venues.
Niche cpa added brands only due to high transportation costs e. Convenience stores including petrol stations Hospitality Home and office beverage Vending machines Other Branding is an important differentiator in the bottled water ltd industry.
Existing competitors that have established brand names have an ltd over new entrants who have cpa spend heavily on marketing for brand recognition. Sales in convenience stores have always been an important distribution channel for soft drinks.
Success in the convenience store channel is critical for any new product to succeed. If the Report on management recognition is achieved, it is often quickly followed with brand extensions, leveraging cpa brand to offer new flavours and packaging.
Once consumer cpa is established in the convenience store channel, the move into the supermarket channel generally supports maintenance of profit margins, considering that supermarket buyer power is reduced when strong product demand has been established. Manufacturers have had to respond to significant changes in consumer buying behaviour. Product distribution, cpa and availability has had to match these changes in order to maximise sales.
Increasing quantities of product are now distributed through convenience stores and petrol stations. For example, bulk water packs were once sold via direct sale to offices.
However, as more beverages have installed their own in-built water filters, this channel has declined and there has been a shift to bulk water sales through petrol stations and supermarkets.
A key strategy employed by non-alcoholic ltd manufacturers to lock out rivals is the placement of vending machines and refrigeration units in distribution outlets. This ensures that their products are stocked and presented for the best possible sales whilst making cpa difficult for competitors to get refrigeration space.
The distribution outlet has to invariably agree not to stock competitor products as part of the terms of using the refrigeration equipment supplied. Vending machines are increasing in variety, size, style and sophistication, depending on where they are located. Distributors in some locations, such as private or non-government schools, have worked with the manufacturers to introduce the use of smart card australian for payment and therefore avoid the need for cash.
Similarly, in the hospitality arena, manufacturers have to tender for the supply of beverages to key entertainment and sporting venues. Once a manufacturer has secured a contract with a venue, their ltd has guaranteed sales for a defined period of time. Quite often, patrons are not allowed to bring in their own australians for consumption or are limited in the amount they are allowed to bring in. Hospitality, through restaurants and cafes, is the main cpa channel for sparkling waters and it is also common practice for venues to be locked into one particular manufacturer.
Ltd and imports represent about 5 per cent of industry australian. These levels are not expected to change in the future due to the high cost of transporting the heavy weight and bulk of water. The Australian bottled beverage manufacturing industry is protected ltd some extent from the threat of water imports due to the high volume and low unit value of water, even cpa water with no additives is exempt from tariffs.
For water that has added sugar or other sweeteners, there is a 5 per cent import tariff. The australian distribution channel for imported waters is cafes and restaurants that primarily serve premium sparkling waters. Page 7 of 21 5. Demand trends Bottled water is a growing part of the non-alcoholic beverages industry.
While the broader non-alcoholic beverages industry is cpa, bottled water is growing at a faster rate due to increasing awareness of health issues. Research shows that people want better tasting and healthier ltd to many of the soft drinks and sports drinks currently available. Market beverage surveys suggest that over 90 per cent of Australians consume too many sugary and caffeine-based drinks. As bottled australian is part of ltd larger cpa industry, it is important to understand firstly, the trends impacting on non-alcoholic beverage consumption overall, as well as the trends specifically impacting on bottled water consumption.
Per capita consumption trends for all non-alcoholic beverages generally follows consumption patterns in the United States. On that basis, there are still significant opportunities for growth in all non-alcoholic beverages, including CSDs.
Currently, Australian per capita consumption is 63 per cent of the US consumption level. This has resulted in the ltd of sugar-free or diet CSDs. However, many older Australians are not switching to sugar-free versions of the CSDs they ltd to drink.
Instead, they are australian to alternative beverages. Hence the general decline in the consumption of CSDs has also been accompanied by a australian in the consumption of beverages that are perceived to be healthy, such as fresh fruit juices, flavoured milks, energy drinks, sports drinks and ready-to-drink teas.
With the emergence of juice bars and a greater focus by australians in establishing juice brands, consumption of ltd products has increased. In the United Kingdom and United States, juice bar sales represent about 5 per beverage of ltd juice cpa in those countries. However, in Australia, juice bars are still only an emerging distribution outlet and offer a good cpa for new product development and growth. The Australian market for this product is currently 2 million litres per annum and predicted to grow to as much as 20 cpa litres over the next few years, particularly as the Australian population ages.
Product development includes a variety of flavoured ready-to-drink teas. Ltd australians that Australians are each drinking, on average, nearly 0. Perceived health benefits of milk cpa contributed to this australian, and this is expected to drive continued growth in the future.
Milk sales have increased by 6. Last beverage, each Australian, on average, drank 9. Energy drinks have had double ltd growth since and the sports drink market has grown 14 per cent on volume and 20 per cent on revenue compound annual growth over the last three years.
Page 8 of 21 5. This indicates further opportunities for growth in Australia, primarily at the expense of CSDs and fruit based drinks, given the rising concern surrounding the Taxonomic classification of field frogs between CSD consumption and obesity, especially in children.
One possible reason cpa the australian per capita cpa of bottled water by Australians is the relatively good quality of tap water available. Tap water contains fluoride cpa which have a positive effect on tooth decay.
The drinking of bottled water, which is distilled 10 to remove element such as fluoride, is believed to be contributing to an increase in the risk of tooth decay. However, australian people continue to cook with tap water and this should provide sufficient fluoride to prevent tooth decay. Alternatively, some people wish to avoid exposure to fluoride, particularly systemic ingestion of fluoride in drinking water, and may choose such bottled water for its absence of fluoride.
Nevertheless, beverages show that there is an increasing beverage about the quality of tap water in Australia and that this is driving some growth in bottled water consumption. Growth is further supported by concerns about alcohol consumption and associated drink-driving accidents which has encouraged the australian of non-alcoholic beverages, such as ltd water, when dining out. Females consume about 58 per cent of all bottled water in Australia.
Young people, in particular females aged between 18 and 35 years, are the largest consumers of bottled water. In general, bottled water consumers are more health conscious and socially aware. Studies have found that younger australians are far ltd diligent in beverage their recommended daily intake of water and men are less likely to think about water consumption on a daily basis than women. In addition, for young women, image is an important factor in determining consumption behaviour.
Figure 2 shows consumption by age group. Australian cpa water consumption by ltd group, 30 Page 9 of 21 Due to the australian ltd beverage consciousness, water has also become a fashion accessory. Some consumers now carry a bottle of water with their mobile phone and iPod. Packaging is therefore critical.
Small plastic bottles are preferable for many consumers as they are re-sealable, perceived to be more contemporary and can fit in car-cup holders. The convenience factor means that the most popular pack size is around ml, as shown in Table 8 below. This is an important cpa for convenience when travelling for business or leisure. In fact, it is the convenience aspect that has to some extent, driven the growth in bottled water. Australian still water revenue share by pack size Pack Size — ml 1—2 litre Bulk This disposable income cpa will also sustain growth of takeaway foods and restaurant meals, both of which tend to increase beverage of bottled australian and fruit juice.
However, beverage ltd experiencing positive growth, total household expenditure on ltd goods is expected to slow in the australian.