The Italian mineral water market is slowing down
Due to decline in exports, the horeca block and stable sales in large-scale distribution, according to Nomisma Observatory/Attachments
Although the turnover cannot be compared to that of wine (3 billion euros against 11), the Italian mineral water sector represents one of the excellence of food & beverage, showing growth rates in sales abroad among the highest among all Made in Italy products. According to the Mineral Water Monitor, the Nomisma Observatory dedicated to the mineral water sector launched today in Bologna, in the pre-Covid period, namely 2010-2019, the export of Italian mineral waters has practically doubled in value (+101 %), a performance much higher than that recorded by the other top food products of the Bel Paese (93% the increase in the export of cheeses, 64% that of wines, 49% that of pasta). Only coffee did better, with + 119%.
And even if the outbreak of the pandemic, with the closure of the on-trade channel (Horeca), imposed a slowdown in cross-border sales (-11%), the setback was less than that suffered by our top competitor, the France, which instead saw exports fall by 15%. A parallel contraction that allowed us to reduce the distance with the transalpines to 111 million euros against the 211 million that instead insisted five years ago.
But the competition to Italian waters does not only speak French: among the world's top exporters there are also countries such as Georgia (101 million euros in exports in 2020) and Fiji (121 million euros), both producers of particularly high-quality mineral waters appreciated in some markets: Russia in the case of Georgian waters and the United States in relation to the product from Fiji. In recent years Italy - thanks to the quality of its waters and the presence of brands with a strong reputation and excellent perception by the final consumer - has performed better than its foreign competitors, increasing its market share around the world and confirming its leadership in some markets. This is, for example, the case of the USA, the first market in the world for water imports (461 million euros of imports) - where Italy holds a market share of 41%, thanks above all to the export of sparkling mineral water ( 89% of total Italian exports in value) - and the only one of the top importers to have recorded an increase in purchases from abroad also in 2020 (+ 6.8%). Elsewhere, on the other hand, due to the pandemic, all markets recorded a contraction in imports in the sector: Germany (-4.7%), Japan (-6.7%), UK (-18.6%).
Even if we focus on the internal market, the situation is not the most optimistic. According to NielsenIQ data, Nomisma's partner in the Mineral Water Monitor Observatory, 2020 ended with a stationary sales in large-scale distribution in value (-0.2%) which was only matched by a slight increase in volumes (+ 1.6%). This trend, however, is the result of different dynamics between the different categories: Covid brings with it a contraction in the sales of carbonated and slightly carbonated waters (respectively -1.3% and -1.5% in volume, 2020 vs 2019), while the purchases by Italians of smooth water (+ 1.8%) and above all natural sparkling water (+ 5.0%) are growing. The latter are - among other things - the only category to score an increase in sales also in value: + 5.6%. Travel restrictions during lockdown and the convenience of receiving groceries directly at home have given a strong boost to online sales, which have almost doubled both in quantity (+94.5) and in volume (+ 92.5%) between 2019 and 2020, with positive trends involving all categories. Although the weight of e-commerce on the total off-trade has doubled, it is still marginal, being equal to just 2%. Due to the closures (or time limits) of bars and restaurants, the collapse of tourist flows and the spread of smart working (and therefore of "lunch breaks" outside the office), sales in Horeca, the reference channel above all, suffer profoundly for the consumption of water in the medium-high range and packaged in glass.
"In a market scenario that has radically changed due to the Coronavirus emergency, explains Emanuele Di Faustino, Nomisma Project Manager - it becomes even more fundamental for companies in the mineral water sector to understand how markets and reference channels are moving and how they are evolving consumer behaviors and needs (formats and packs, types, consumption occasions, competing products ...) in order to be able to correctly reshape their production and commercial strategies".
EFA News - European Food Agency