Abstract
Frost & Sullivan's Water Financial Benchmarking and Analysis (FBA) service
presents a broad financial outline of the water industry, highlighting major
market and financial trends in key growth segments. It provides a
comprehensive financial analysis of leading water companies to support the
investment and financial analysis needs of decision makers in the arena. The
current study within the service focuses on the North American residential
water treatment equipment market.
Residential Water Market Reaching Maturity
While the residential water treatment equipment market has reached the mature
stage of its lifecycle, the competing bottled water industry is growing at an
astonishing rate, illustrating that Americans are concerned about the quality
of drinking water. In response, residential water companies are taking drastic
measures to attract these customers to shift from bottled water to residential
water treatment equipment.
Frost & Sullivan estimates that the North American residential water treatment
equipment market, with a revenue base of $1.48 billion for 2004, will reach
$2.29 billion in revenues by 2011, representing a compound annual growth rate
(CAGR) of only 6.5 percent. Since the increasing market saturation limits the
growth the market, industry participants should look for ways to attract new
customers to the marketplace.
Increased Concerns Over Water Purity
Over the last five years, the market has witnessed an increase in public
concerns about the contamination of drinking water through parasites and
bio-terrorism. Recently, there have been several outbreaks of various
water-borne diseases in the United States; these occurrences, coupled with
fear of terrorism post-9/11, have boosted sales in the water purification
market.
In order to address the concerns over water purity, residential water
companies need to increase consumer awareness, and facilitate a shift from
basic treatment equipment to high-end sophisticated products. If consumers are
more educated about water contaminants, the residential water companies will
be more effective at convincing consumers that their products and equipment
are sufficient at treating the contaminants.
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