1) While Mexico is a large country and its capital is the world's largest city, a great portion of the company is not urbanized. The terrain is vast and difficult, ranging from mountain areas to large deserts, which bring added difficulty and high distribution cost. .
2) The supply of potable tap water is lacked in Mexico. Because of this problem, few people trust or drink tap water; therefore most Mexicans purchased bottled water for cooking and cleaning. These conditions are what enabled the market for bottled water to grow on an average of 20% between 1992 and 1995. This growth is good considering that it has not come from any other beverage categories. .
Thanks to the active market for bottled water and ease of entry into the business, those visiting Mexico will be struck by the endless array of water brands found in each city. .
By the end of 1995 there were 1868 water bottlers in Mexico, with the top 11 representing only 24% of the entire water category. The typical water supplier is a small-undercapitalized producer that serves local towns and villages, mostly operated from one plant. Mexico's two biggest water bottlers are AGA, with a yearly volume of312 million gallons and Gemex' s Electropura with 234 gallons. The next nine largest suppliers produce well below 78 million gallons each year. The only brands available nationally are Electropura, Bonafont, Arcos Iris, and St. Maria, their focus is large metropolitan areas, and their distribution falls significantly in rural areas. Electropura now reaches 17 percent of Mexico's population, which Gemex aim for to become Mexico's first truly national water brand. .
The Mexican water market has yet to be targeted by any U. S. suppliers. European brands have led the way. Given the garrafones large size and free delivery, home delivery accounts for 90% of bottled water sales in Mexico. Dole Consulting estimates Mexico to have a retail point of sale universe for bottled water of 350,000 outlets.