The non-alcoholic beverages market was worth over 900 billion euros globally by 2023 but is barely growing. Looking at the parts that are of interest to Hydrofix, it consists out of 257 billion euros packaged water, 64 billion Iced tea drinks and 24 billion sports drinks. This could be seen as the Total Addressable Market.
The graph below zooms in on the packaged water (257 billion Euros). The flavoured and functional water market is worth 25 billion Euros today and is growing at 9.4% yearly!
Bottled water market, 2023
The yellow rectangle shows the current market for water dispensers. It was estimated to be 2.5 billion Euros in 2022, growing at 8.9% annually. Water dispensers replace bottled still and carbonated water, but there is still a long way to go. The high(er) growth rate could continue for years before water dispensers replace most bottled water.
Hydrofix is a small player... with a lot of potential
The red rectangle indicates Hydrofix's target market: replacing a portion of bottled water, current water dispensers, flavoured water and functional water drinks in the office.
A conservative estimate of the Serviceable Addressable Market is around 9 billion by 2030. This takes into account the growth of the water dispensers market, as well as flavoured and functional water markets. A rough estimate of packaged water in an office environment is 10% of the total market, being 30 billion (10% of 257 billion in 2023, growing to almost 300 billion in 2030). As this can, in theory, be entirely replaced by flavoured water dispensers, the current growth rate of water dispensers - but extending it to flavoured and functional water - leads to the more conservative estimate in 2030.
The serviceable obtainable market has an important geographical component. With an initial focus on the Belux and expansion into the Middle East, the current sales forecast attributes Hydrofix a market share of 0.05% of the SAM.
Competition
The overview below shows some of the competitors in the market today. They are arranged in a quadrant in terms of scalability on the one hand and attractiveness on the other. Attractiveness here is defined as a combination of the breadth of flavours on offer, but - also in the context of our customers (companies) - the impact on health and the environment. Scalability is about the need for intervention to keep the devices operational, including replacing the flavours.
Concurrentiepositie
Go to market Strategy
How will Hydrofix approach the market? As mentioned earlier, Hydrofix focuses primarily on companies (B2B) that want to offer flavoured water to their employees as an alternative to bottled water and soft drinks (B2B2C). In doing so, it offers two models:
Razor and blade: This is similar to the model for selling razor blades (hence the name), but it is also applied to inkjet printers, for example. The device is sold to the customer with a limited margin, with a higher margin being realised on the sale of the flavour cartridges in subsequent years.
Product-as-a-service: in this model, only a price per consumption is charged for flavoured and unflavoured waters. Hydrofix thereby aims for a cost per glass of flavoured water that is lower (for a company) than the price of a cup of coffee. Coffee, usually offered free of charge to employees, has a total cost of about 0.50 Euro/cup.
Go to market Strategy - Hydrofix
Having established itself in this market segment in the BeLux, Hydrofix sees opportunities to:
Expand into the fastest-growing market for flavour waters, particularly the Middle East.
Explore other market segments, such as hotel chains, better restaurants and schools.
