Demand for packaged water in Africa has risen strongly over the last five years, because of a lack of safe drinking water, but growth is forecast to slow in the next few years, according to Canadean (Basingstoke, Hampshire / UK; www.canadean.com). The UK-based research agency attributes the expected growth slowdown to concerns about the quality of infrastructure across the continent, as well as uncertainty about the introduction of more expensive PET bottles in the key Nigerian market.

Contrary to that, the PET Recycling Company (PETCO, Muizenberg / South Africa; www.petco.co.za) predicts that South Africa's PET usage will rise by about 10% per year in the near future. One of the topics that was up for discussion ahead of the recent "MEAPET" fair, held in Dubai / United Arab Emirates from 11-12 February, was whether rising demand from Africa will make a dent in the generally oversupplied global market, even if new PET production lines are planned for Uganda and Kenya.

Canadean predicts that the African packaged water market will grow by an average of only 5% per year by volume between 2013 and 2018, compared with 10% between 2008 and 2013. Balancing consumer demand with the right price point will be critical for African packaged water companies in the near future, it says.

Growth over the last five years has been largely driven by the Nigerian market, which accounts for two-thirds of the region’s packaged water market. “Although growth in Nigeria has slowed in recent years, per capita consumption continues to increase and is still well above the regional average,” Canadean says.

Demand for packaged water has been driven by health concerns about the lack of safe drinking water across many African countries, combined with rising consumer incomes, leading to double-digit increases in a number of countries. Public water supplies remain limited or unreliable, and consumers in developing markets such as Nigeria, Tanzania and Ghana are increasingly turning to packaged water as an alternative.

“Although many African states are now benefiting from rising levels of GDP and an expanding middle class, the availability of fresh drinking water continues to be a problem,” says Canadean analyst Chris Strong. “Rising prosperity and increasing health concerns have helped drive consumers towards packaged water options.”

Relatively cheap sachet packaging has dominated the market, accounting for 54% in 2013 most of which was contributed by Nigeria and Ghana. Sachet packages are generally more affordable for consumers on low incomes and are cheap to produce, enabling soft drinks companies to build market share in these countries, Canadean says.