Abstract
This report analyses the dynamics in the battery market, which Mintel last
reported on in July 2004, focusing on dry cell batteries both primary and
rechargeable.
The battery market is complementary by nature with its success always
intertwined with the success of products that are battery-powered.
The battery market has traditionally been very stable.
However, over the last couple of years, an increase in high drain devices and
innovation from battery manufacturers has considerably changed the market.
Battery-powered devices have increased both in numbers and in penetration, as
ownership of MP3 players, DVD players and digital cameras have grown; indeed
many household now own multiple versions of these products.
New product development and existing products have also grown the lucrative
gadget and electronic toy market, with batteries being requisite in items from
robots to books and board games.
The growth in battery-powered devices has been tempered by two main challenges
facing battery manufacturers.
The first challenge is that consumers are converting to longer life products
causing a fall in the replacement rate of batteries, which consequently
impacts on volume sales.
The second is the effects of heavy price promotions, which consistently erode
value in the market, particularly at times of natural uplift.
The industry is combating this situation by focusing on premium products -
launching new lithium products specifically targeted at high-drain devices and
rechargeable products including chargers.
However, a large section of consumers remain unconcerned by batteries and
engaging them in premium products is proving difficult. In the face of the
potential loss of volume sales the industry must innovate and diversify if
value is to be maintained.
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