Beruflich Dokumente
Kultur Dokumente
water Market
(2008-10)
NAVI MUMBAI
Submitte
d by :
Background
HUNGARY
Area: 93,030 km2
Bordering countries: Austria, Slovakia, the Ukraine, Romania, Serbia, Croatia, Slovenia
Population: 10,117,000
Official language: Hungarian
Capital city: Budapest
Constitutional form: republic
Official currency: Hungarian Forint (HUF)
Economy
Hungary is a developing, industrial-agricultural, foreign economy sensitive country. The
country’s geographical position is favorable as it is situated in the very centre of Europe and has
a stable political and economic environment.
In Hungary, nearly two-thirds of the gross domestic product (GDP) is produced by the service
sector. Within this financial activities, property transactions, economic services and community
services (administration, education, healthcare, and social services) are present in an outstanding
proportion. Industry, which is first of all supported by the processing industry, produces about
one quarter of the national product.
Market Overview
• Hungary, located in Central Eastern Europe with a population of 10 million, has nearly fully
transitioned from a centrally planned economy to a market-based one since the fall of
communism in 1989. It is a member of the OECD (1996), NATO (1999) and the European
Union (2004).
• Per capita income is nearly two-thirds that of the EU-25 average and total GDP (purchasing
power parity) is US$182 billion. The private sector accounts for more than 80 percent of GDP.
• Foreign direct investment (FDI) has helped modernize industries, create jobs, boost exports and
spur economic growth. Cumulative FDI stock has totaled more than US$90 billion since 1989,
the highest in the region on a per capita basis. Among the important sectors: automotive, IT,
logistics and, more recently, shared services (e.g., back office and/or call centre operations).
• Funding from the EU has also driven growth, and will continue to do so. Since 2004, EU funds
have been used to improve telecommunications, energy and highway infrastructure. As part of a
second National Development Plan (2007-2013), Hungary will allocate approximately €25
billion (US$36.8 billion) in projects ranging from tourism and transportation to healthcare and
environment.
Hungary's mineral water market is stagnating, both in terms of value and volume, according to a
study by market research company Nielsen.
Mineral water sales in Hungary reached 0.23 USD bn, or 890m litres, in the twelve months to
May, level with the previous twelve-month period. The average price per litre of mineral water
was 1.25 USD. Supermarkets and discount stores sold 45pc of mineral water. Hypermarkets sold
34pc.
2001
2007
The Hungarian consumes carbonated mineral water to a great extent as compare to still or natural
mineral water.
Consumer’s habits in the Hungarian mineral water market
• The consumption of natural and low mineralised, non-carbonated waters has a rapid growth for
replacement of the poor quality tap-water
• The mineral water consumption became a fashionable habit
• The seasonality of the consumption has been moderated
• Consumers are getting more and more conscious when making their choice
• Shopping in big quantities
• The one-way PET bottles are dominating the market
Production of fruit juices and drinks is in the region of 400 million litres a year.
Capacity utilisation is currently running at around 80%. The Hungarian Association of Non-
Alcoholic, Fruit Juice and Mineral Waters estimates around 500 million litres of fruit juice and
drinks a year can be produced by the domestic supply base.
Market Segmentation
Pure juices and nectars account for 30% of volume sales but almost half of market value.
Since 2003, nectars and classic juices sold in Hungary must now achieve a 50%
minimum fruit content, as opposed to 25% previously.
Orange, peach, apple and grape flavours account for almost two-thirds (65%) of volume
sales, compared with 16% for multi-vitamin mixed fruit juices. Mixed fruit products are
gaining share at the expense of traditional single-fruit products, notably orange and
peach-based juices and drinks.
Sales of pure fruit juices have demonstrated solid growth in recent years.
The most popular pack size is still 1.5-litre, but demand for 5-litre and especially 0.5-litre
packaging formats is increasing.
Higher quality pure and classic juices tend to be packaged in liquid cartons, while fruit
drinks of lower fruit content and additives are usually sold in PET bottles.
Health related problems and risks such as obesity etc. is proving out to be a main reason for the
gradual shift away from the carbonated water towards other healthier options available such as
bottle or flavored which is giving a boost to the European bottled water industry. Other than
gaining advantage from the reluctant trend of consumers to drink tap water, bottled water has an
edge over fizzy drinks due to its high calorie count. Bottled water being a life product is
controlled by stringent laws and regulations is considered safe for consumption. Moreover,
consumers in that region consider water as an essential part of skin hydration and linked strongly
with health and beauty. Thus the bottle manufacturers take advantage of this and link it
positioning bottled water as a skin care product.
Other than this it is essential to note that the home and office delivery segment to has a great
potential for growth in the region. New entrants in the market need to initiate public awareness
campaigns and publish statistics to prove the actual amount of water drawn by them. In addition
concerns regarding pollution created by the disposal of non biodegradable packaging material
have to be addressed by demonstrating corporate social responsibility by using environmentally
safe material. Overall, the eastern European market (including Hungary) will most probably
outrun the western market in terms growth as it has a large untapped potential and is expected to
grow by 17.7 percent during 2007-2010.
The global consumption of bottled mineral water is increasing by 10% per year on an average. It
represents a total consumption of 97 billion liters and proves to be the most dynamic in the food
industry. Europe, with France, Italy, and Germany lead the way with 50% of global volume.
However there is a shift being noticed along with it in the global appeal of bottled water and is
based mainly on two factors which include consumer’s perceived value of bottled water which
they consider as safer and better to drink both in terms of taste and health reasons.
In recent times traditional brand leaders in the region were forced take back seat losing their
market share to supermarkets and discount brands in relation to all the segments including the
heavily targeted flavored water sector. In view of this new shift in market dynamics, the leading
water brands are rethinking their strategies. New products are being launched such as UniQuelle
in order to capture new market and raise awareness about the product. In flavored water segment
companies are coming out with imaginative flavors with low sugar content to appeal the young
adult market.
The graphs shown below give an indication of the trend of market including fruit juices and
drinks as a whole in the coming years in Hungary:
f : Forecast
The main purpose behind this study was to analyze the Hungarian market and the competition in
this market for natural mineral water and juices as well as from demand side, to know the
preferences of Hungarian consumers regarding natural mineral water as well as natural fruit
juices; with an intention to know the feasibility of entering into this market.
Our Objective:
Our main objectives of this study can be divided into some parts. They are like this…
One of the very first things that came into our mind was to get an idea of relevance or the “Role”
of natural mineral water and natural fruit juices among Hungarian people. Because they do not
perceive the mineral water as Indian consumer do it! After the research it was also surprising for
us that Hungarian people treat mineral after just as any other soft drink! So understanding this
mindset was also one of the objectives of our studies.
Our objective was also to evaluate the consumption pattern for natural mineral water as well fruit
juice among Hungarian consumers. It means how frequently they consume these things as well if
there is any difference or any particular thing which an outsider company should bear in mind
regarding their consumption habits.
One of the major areas of our objective (and which may be the most useful for the company) was
to study the customers preferences regarding currently sold mineral water and juice brands in
Hungarian market, so that we can also know the current state of competition, whether the
customers are satisfied or not, do they have any kind of latent demands or not etc. This
competitive study will help you (the company) much to take any future decision regarding this
business idea. Besides, one of the motives was to know the preference of normal mineral
water/juices over natural mineral water/juices and vice versa.
Besides, in this kind of countries where the customers are very conscious and choosy regarding
this kind of product, it is very essential to know their preferences regarding even small things
like packaging of the bottle, quantity preference and the most important - the price preference!
Our motive was also to know all these things.
And finally, the biggest motive of all this big exercise was to get an overall idea regarding the
feasibility of this business idea to enter into Hungarian market with natural mineral water and
natural fruit juices.
The market is fiercely competitive market and dominated by four main players, which often
compete via some kind of sales promotion.
Sio-Eckes Kft is a subsidiary of the German firm Eckes-Granini, and supplies 100% pure juice
under the Sio, Hohes C, Premium and Granini brands, leading this sub-sector with a 24% share
of volume sales. It also sells mixed vegetable juices under the Sio Multiplusz label. Szöbi Szörp
Rt forms part of the French Teissiere group, and supplies two leading brands, namely Szöbi and
the premium Golden Valley brand.
Buszesz offers the widest range of soft drinks in Hungary, in terms of flavours and types of
packaging. In addition to carbonated soft drinks, such as cola, orangeade and tonic water, it
markets fruit juices, including the Sunkist brand. It also markets still fruit-based drinks under the
Gold Sztar brand.
Rauch Hungaria is fully-owned by the Austrian fruit juice and RTD tea producer Rauch
Fruchtsaefte. The firm’s main premium fruit juice is bottled under the Happy Day label.
The Polish Maspex Wadowice Group acquired the Hungarian fruit juices and drinks producer
Olympos-Top in December 2004, and now operates under the Maspex-Olympos name in
Hungary. Maspex-Olympos offers a wide range of pure juices, fruit juices and fruit drinks under
the TopJoy, Kubu and Tymbark brands.
Sample submitted by the group:
San benedetto-italy
Evian- France
Szentkiralyi- Hungary
Kristalyviz- Hungary
Lilia- Italy
Oasis from Schweppes international- France
Cappy from coca-cola- Hungary
Nestea-cocacola- Hungary
Kekkuti theodora- Hungary
Recommendations :
It has also been seen that the Hungary's mineral water legislation is
similar to that of the European Union, in fact even tougher, where
requirements for waters to qualify as “natural mineral water” is to
satisfy some strict criterions which makes it essentially difficult for
foreign companies to enter the market.
However, recent study has shown that the Hungarian mineral water
market is getting stagnant, both in terms of values and volume (MTI
– Eco News, july 2009), thus giving us an opportunity to invest in
this sector. With strong values and good pricing strategy, we can
move into the market.
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