Water Market Analysis & Industry Characteristics
• High Demand: Demand for water has grown at twice the rate of the population,
according to the World Resources Institute.
• Low Supply: Scarcity of drinkable water is reaching crisis levels.
• Significant Spending:Many Third World countries that previously have had trouble
accessing good drinking water are making huge strides in modernizing their water
infrastructure.
• No Substitutes: Water remains among the cheapest commodities. But it is also essential
to all living things--whether they be crops, livestock or human beings. As a critical
component in virtually every manufacturing and processing plant, water is also
necessary for economic sustainability and growth. However, unlike any other
commodity, water has no substitute regardless of price.
• Attractive Growth: The global water industry is one where demand is likely to grow
with population increases. Water has a history of strong and consistent growth and that
is unlikely to change soon, in part because there is no substitute for water. Water is a
unique commodity, and because of its similarities to oil, it might just be the next global
commodity that pays off.
• NonCyclical: The water industry is one of the largest global industries, but unlike oil and
gas, is far less cyclical.
• Ripe for Consolidation: Although it is currently a fragmented and relatively
undervalued commodity, some experts believe that water may follow in the path of oil.
That could mean industry consolidation, wars fought over water, supplies locked up and
constrained by cartels, along with shortages and high prices on the horizon.
Water is a Scarce Resource
Only about 2.5% of the world’s water is fresh water and most of that is frozen
Water Usage Growth has Surpassed Population Growth
Rising real incomes, more convenient water supply and industrial and agricultural developments have meant water demand has significantly outstripped population growth
Most Residential Water Usage is not Used for Drinking Purposes
An estimated 85% of residential water usage ends up wasted
US Water Usage Exceeds All Other Countries
American water consumption is 70% greater than European consumption
(Source: JT Kerinan 2008)
