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SME Guide

The Booming Bottled Water Industry in Nigeria – An Overview

The bottled water industry in Nigeria has experienced massive growth over the past two decades, emerging as one of the most lucrative segments of the country’s fast-moving consumer goods (FMCG) sector. Various factors have fuelled the surging demand for bottled water and inspired a proliferation of both major bottled water brands and smaller local producers.

A Look at Market Growth Statistics

According to research firm Statista, the total volume of bottled water consumed in Nigeria has risen exponentially from 450 million litres in 2011 to over 2.5 billion litres in 2020. The per capita consumption of bottled water in the country has also grown steadily from under 3 litres in 2011 to over 12 litres in 2020.

Industry revenue has correspondingly surged over the past decade, rising from an estimated ₦7 billion in 2011 to over ₦200 billion in 2020, representing a Compound Annual Growth Rate (CAGR) of 40% within that period. This rapid growth trajectory is projected to continue, with some estimates predicting the market will be worth up to ₦500 billion by 2025.

The number of bottled water producers has also increased remarkably over the past two decades, from less than 10 established brands in the early 2000s to over 100 registered bottled water companies operating today.

Key Growth Drivers

Several factors have catalysed the bottled water boom in Nigeria:

Growing Health Awareness

Increasing health consciousness and desire for hygienic drinking water as Nigeria grapples with the impact of water-borne diseases. This has made bottled water a convenient and safer alternative to questionable tap water.

Rising Disposable Incomes

Nigeria’s emerging middle class with higher disposable income is willing to pay for perceived higher-quality drinking water. This is coupled with lifestyle changes towards healthier beverage choices.

Urbanization

Rapid urbanization has increased the demand for bottled water, especially in cities like Lagos, Abuja, Port Harcourt and Kano where tap water infrastructure is lacking.

Rising Cost of Energy and Production

As energy costs increase, operating pumps and purification equipment for tap water has become more expensive, making bottled water more commercially viable.

Marketing and Branding

Aggressive marketing and celebrity endorsement deals by water brands have also played a key role in shaping consumer perceptions and boosting demand.

Product Diversification

The introduction of flavoured, oxygenated “enriched” water and affordable sachet formats to target mass market segments has expanded the consumer base.

Poor Public Water Supply Infrastructure

Inadequate access to safe public potable water in many parts of Nigeria has led to increased bottled water usage. Load shedding and frequent outages of public water supply drive reliance on bottled water as a backup.

Key Market Segments

Premium/Imported Brands

This segment is dominated by multinational bottled water brands like Nestle Pure Life, Eva Water, Voltic, and Aquafina. Targeting upper middle class and high-end consumers in major cities, premium bottled water sells for between ₦100 – ₦200 for 500ml-1.5L bottles. The premium category accounts for about 20% of the total market revenue.

Mid-Range Brands

Catering to middle-class consumers in state capitals and urban areas are more affordable local brands like Gossy Water, Swan Natural Spring Water, Aqualis Natural Mineral Water, Ragolis Water, VeePee Water etc. They retail between ₦50 – ₦100 for 500ml bottles and ₦100 – ₦150 for 1.5L bottles, accounting for 30% of market share.

Value Brands

This budget segment consisting of lesser-known local brands targets lower-income consumers, students, and mass market segments. Brands include Otamin Water, Funtopia Water, Orikis Natural Spring Water, Pocari Sweat etc. Price range is ₦20 – ₦50 for 500ml and ₦50 – ₦80 for 1.5L PET bottles, accounting for 40% of market revenue.

Sachet Segment

Catering to unskilled workers, rural areas, and the bottom of the pyramid are affordable sachets in sizes ranging from 100ml to 500ml. Popular sachet brands include Krystal, Rejoyce Pure Water, Hi-Dry etc which sell for between ₦5 – ₦50, accounting for 10% of the market.

Key Regional Markets

Lagos

As Nigeria’s commercial hub, Lagos state with over 20 million inhabitants consumes the bulk of bottled water in Nigeria, accounting for an estimated 30% of total market size. High demand comes from the city’s affluent classes and large middle-class populace.

Abuja

The capital city and its growing cosmopolitan population accounts for another significant share of about 25% of bottled water consumption in the country.

Southeast

Major southeast cities like Port Harcourt, Enugu, Onitsha and Aba make up another key regional market for bottled water in Nigeria, driven by increasing incomes and large young consumer segments.

South West

The region encompassing cities like Ibadan, Abeokuta, Ondo and Akure is another major emerging market for bottled water brands accounting for 15% of consumption.

South-South

The Niger Delta city of Warri and nearby towns like Asaba, and Benin City comprise about 10% of the bottled water market.

North Central

Middle belt cities like Jos, Makurdi, Lafia, Lokoja account for 10% of demand.

Northeast and Northwest

Northern cities like Kano, Kaduna, Gombe, Bauchi, Maiduguri and others make up the balance of 10% of the bottled water market.

Key Players

Nigeria’s bottled water sector comprises of the following major producers:

Nestlé Nigeria – Nestlé Pure Life

The Nigerian subsidiary of Swiss multinational Nestlé, manufacturers of Nestlé Pure Life is the longstanding market leader. The company set up its Abaji factory in 2008 to focus exclusively on Nestlé Pure Life production. It commands almost 40% of the premium segment.

Affelka SA – Eva Premium Drinking Water

Affelka, producers of the popular Eva brand, are another major force, having been one of the pioneering bottled water brands in Nigeria since 1996. Eva has nationwide distribution and controls over 30% of the premium market segment.

Krisoral Group – Swan Natural Spring Water

Indigenous conglomerate Krisoral Group produces the Swan brand and have emerged as a strong mid-range player with extensive reach across Southern Nigeria. Swan has about 20% of the mid-range segment.

Ruyat Ventures – Gossy Water

Gossy Water produced by Lagos-based Ruyat Ventures has grown to be a prominent mid-range bottled water brand with a significant presence across Southwest Nigeria amassing over 15% market share in that segment.

Abacrown Food and Beverages Ltd – VeePee Water

The VeePee brand produced by Abacrown Food and Beverages Ltd based in Abia state is another major mid-range player focused mainly in the Southeast region but with growing presence in other markets. The company controls around 10% of the mid-range segment.

Aquafina (PepsiCo)

PepsiCo’s Aquafina brand is the second largest player in the premium import segment after Nestlé Pure Life, accounting for just under 15% of that category’s market share.

Voltic Nigeria Limited

Voltic from Ghanaian company Voltic Group is a key competitor in the premium segment with products mainly distributed within Lagos, Abuja and Port Harcourt.

Hollandia UAC Foods

Hollandia bottled water and juices division of UAC Foods (UACN) holds about 7% of the premium segment.

7UP Bottling Company – H2Oh!

The water brand from Nigeria’s largest soft drink bottling company controls just under 5% of the premium market.

Food Concepts – ColdH2O

ColdH2O pioneered the innovative segment of oxygenated water in Nigeria and enjoys a significant presence in Lagos, Port Harcourt and Abuja.

Sona Group – Ragolis Water

Ragolis is one of the early pioneers of affordably priced bottled water sachets and PET bottles and enjoys vast reach in Lagos and southwest regions accounting for an estimated 40% of the sachet market category.

Abdulsafi Nigeria Ltd – Krystal Natural Spring Water

Another major player in the sachet segment is Krystal water, produced by Abdulsafi Nigeria Ltd based in Abuja with operations across the North Central region. Krystal controls around 30% of the bottled water sachet category.

Vinoc Industries – Rejoyce Purified Drinking Water

Rejoyce is a prominent sachet brand with a significant presence in the southeast region accounting for about 20% of the sachet market segment.

Bel Aqua Companies – Bel Aqua Water

Bel Aqua Water produced by indigenous conglomerate Bel Aqua Companies has grown over the last decade to attain a significant presence in the mid-range and value segments with distribution across multiple states. The company has about 5% of the mid-range market.

Laquanda Group – Orikis Natural Spring Water

The Orikis brand from Laquanda Group based in Oyo state has attained prominent status within the southwest region as a popular value-based bottled water. Orikis has captured about 3% of the value segment.

bigg Technologies – bigg Drinking Water

The tech-driven brand bigg Drinking Water owned by bigg Technologies is a relatively new entrant deploying technology and innovative branding to target young professionals within Lagos and Abuja. bigg is fast gaining prominence within the value segment.

Major Production Locations

Ogun State

Ogun state surrounding Lagos houses the largest concentration of bottled water factories in Nigeria covering over 40% of national production capacity. Major brands operating Ogun factories include Nestlé, Swan, Eva Water, Gossy, VeePee, Bel Aqua, Hollandia etc. Its proximity to Lagos makes it strategic for serving that major market.

Abuja

As the capital city, Abuja and its environs contain numerous major bottled water production facilities including Swan, Bel Aqua, Rano, Rejoyce, ColdH2O etc. Abuja accounts for around 20% of national production capacity.

Abia State

Abia State in the southeast emerging as a manufacturing hub houses a growing cluster of bottled water companies taking advantage of its central location. Major brands operating factories in Abia include VeePee, Krystal, Somotex etc. The state accounts for about 15% of installed capacity.

Oyo State

Oyo state also boasts some key bottled water factories including Ragolis, Orikis, Folphil Purified Water and Q-Life Spring Water serving demand from Southwest Nigeria. About 7% of production takes place here.

Other States

Scattered bottled water factories are found in states like Akwa-Ibom, Cross River, Kano, Kaduna, Delta, Edo, Ondo and others accounting for the remaining 15% of national production.

Recent Capacity Expansion

To meet rapidly rising demand, existing bottled water producers in Nigeria have been expanding production capacity. Nestlé Nigeria in 2021 invested over ₦5 billion to double the capacity of its Abaji plant from 600,000 to over 1.2 million bottles daily. Krisoral Group also invested ₦3.5 billion in 2020 to boost capacity for its Swan brand by 50%. Eva Water and Ragolis Water equally undertook capacity upgrades between 2018 – 2020.

New investments are also being made by corporate giants like BUA Group and Dangote Group who have recently established new million-dollar bottled water production lines with advanced automation to gain market share. These moves indicate continued strong growth and capacity investments in the industry.

Industry Challenges

Despite exponential growth and investments, some key challenges plague bottled water companies in Nigeria:

Power Supply Issues

Inadequate electricity supply, frequent power cuts and high diesel costs for running generators drive up production costs. Power accounts for over 35% of operating expenses.

Poor Road Infrastructure

Bad roads impair transportation and distribution. About 40% of bottled water is lost to breakages arising from bumpy roads. High transport costs also eat into margins.

Forex Access for Raw Materials

Most production inputs and materials like PET resin, packaging, plastic caps and labels are sourced from abroad. Difficulty accessing foreign exchange by producers often leads to shutdowns.

Low Manufacturing Capacity

High import dependency, complex machinery, lack of skills and technology limit local bottled water production capacity for now. Nigeria’s 2.5 billion liters yearly consumption outstrips the capacity of local producers.

Smuggling of Products

Porous borders enable smuggling which distorts market pricing and provides unfair competition to local producers. Over 10% of bottled water supply still comes from smuggled products.

Multiple Levies and Regulations

Numerous government levies, excessive regulations around production and waste disposal drive up costs. Complying with NAFDAC, SON, and NESREA regulations also involves cumbersome processes.

Health and Safety Concerns

Low-quality standards and unhygienic practices by some fly-by-night producers undermine consumer confidence and taint perception of brands.

Environmental Impact

The huge amounts of plastic waste generated is an environmental challenge. PET bottles and sachets pile up in landfills and block drains exacerbating flooding during rains.

Market Saturation in Major Cities

Increasing market saturation and intense competition in cities like Lagos and Abuja is leading to price wars which reduce profitability. Rural penetration remains low.

Opportunities

Despite the challenges, Nigeria’s bottled water sector still presents major opportunities:

Rural and Regional Expansion

Low penetration beyond tier 1 cities offers huge potential for sales growth as incomes rise in rural areas and the north. Product formats and pricing can be tailored to tap into these markets.

New Product Development

Value-added segments like flavoured, oxygenated and vitamin-enriched water, provide differentiation opportunities to grow sales.

Packaging Innovations

Investments in advanced aseptic PET technology and reusable glass bottle options can strengthen product quality perception.

Export Market Expansion

Leveraging AfCFTA policy, Nigerian bottled water brands can expand into West Africa and the continent where locally produced brands can enjoy preferential access.

Technology Adoption

Deployment of solar, automation, ERP solutions, double-walled PET bottles, and blockchain-based supply chain systems can cut costs, reduce waste and boost efficiency.

Public-Private Partnerships

Collaborations with government on infrastructure, one-stop regulatory shops, cross-border trade facilitation and standards monitoring can ease constraints.

Outlook

Nigeria’s rapidly urbanizing population, growing economy, hot climate and evolving consumer preferences will continue to drive bottled water demand. With increased investments in production capacity, product innovations, rural penetration, and harnessed regional trade opportunities, the industry still promises robust double-digit growth over the next decade. However, concerted efforts will be required to tackle challenges around infrastructure, standards, regulations, technology and environmental impact for sustainable growth of this vibrant sector.

2 thoughts on “The Booming Bottled Water Industry in Nigeria – An Overview”

  1. Pingback: 100 Profitable Business Ideas to Start in Nigeria - SME Guide

  2. Good Morning I was once a witness to the poor habit of poor drinking Water in the Rural areas in Nigeria as a country, States and Local Areas in Nigeria, but i think if we all put our heads together to making sure we bring ideas and initiatives as to seeing the way and manner we can bring good and better ideas to making sure on how to introduce good purifying methods and good initiative. In as much as i believe that a lot of Nigerians have try to put better boreholes,and tapes for her indigenes, But there are still so many Nigerians that is to be satisfy on a better Life, because of the Prices of the Products and Mechine’s that are put in place for the common man or you say the average person in Nigeria .So I will like to introduce a Products for the common and the average and even the big people in Nigeria, who will be interested in this Products just contact me through this Email Adresse. I live in France and these Products is Made in France. I will be waiting for your reply as I believe that Drinking Good WATER is Prolonging good Health and Longevity.
    Merci Beaucoup Passe Une tres belle Journee. North of FRANCE .

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