Frost: Strong Growth for POU Systems, Filter Pitchers in Residential Water Treatment Markets

July 15, 2008 // Published as a news service by IHS

Nonetheless, the gradual but steadily increasing demand for residential water treatment systems, paralleled by the prevailing regional water contamination and initiatives of market participants, is set to boost market prospects, especially point of use (POU) and filter pitchers.

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Recent analysis from Frost & Sullivan of the European residential water treatment systems markets found earned revenues of $721.2 million in 2007, with estimates to reach $1 billion in 2014.

"Product innovation and a strong distribution network are proving crucial for success in the European residential water treatment systems market," said Frost & Sullivan research analyst Sowmya J.

"The relatively developed nature of the market and the high level of competition among the large number of participants are spurring the development of new products, as well as the improvement of existing offerings."

For instance, POU water treatment systems are also being designed to function as water coolers. This new product is highly desirable among customers due to its multipurpose application. Analysts said regular and consistent product improvement is a strategy that will ensure the growth and success of market participants.

The key product segments of POU systems and filter pitchers are experiencing relatively strong growth. Analysts said these segments have benefited from the high degree of innovation and are sustaining interest among customers in most major regional markets.

Analysts said intensifying market saturation in Western Europe, however, is posing a major threat to market expansion. Market participants need to focus on developing new strategies to increase product sales and drive long-term growth.

"The water quality in European countries is registering continual improvement, with tap water used for drinking purposes routed through municipal water treatment plants regularly meeting EU [European Union]-mandated standards," said Sowmya. "Enhanced water quality presents a challenge for market participants that need to develop products with very high water purification efficiencies."

Companies should focus on associating with the strong network of distribution channels to increase their market penetration and product availability, analysts said. Distributors, dealers and installers can greatly influence the reputation and turnover of market participants since they are influential in both mature markets, as well as those still at the development stage.

In mature markets, there is extensive competition among companies offering water treatment systems. Associating with channel partners will help companies attain a better reach and larger customer base. Analysts said in developing markets, the extent of market penetration will be higher for channel partners as they are constantly in touch with local customers and can influence their choice of water treatment systems.

Source: Frost & Sullivan.