Pond Equipment Market REPORT UK 2006

SUMMARY

Water gardening has increased in popularity in recent years fuelled by gardening makeover programmes on television, large garden shows featuring water gardens, rising disposable incomes and low inflation. It is estimated that approximately 9-10% of UK homes have some form of water feature, though many are relatively small and require minimal equipment.

While the overall water garden market is estimated to be worth around £150 million, the pond equipment sector is valued at an estimated £38m at manufacturers prices in 2005.

Although historically the pond equipment market has seen steady growth, lower growth was seen in 2004-05 due to poor weather and reduced consumer spending. Growth in volume terms is understated as market prices in many product sectors have been stable or even declined in recent years.

The largest sector of the pond equipment market is liners and pre-formed ponds, which account for an estimated 25% of the market. Pumps are also a major sector at 23% of the market by value, whilst general accessories, including fish food and pond treatments, are a growing market at 22%. Filtration systems account for 18% of the market with pond accessories making up the balance of the market and including products such as self-contained water features.

In the liners and pre-formed ponds sector, liners hold the dominant share accounting for over half the market whilst pre-formed ponds have an estimated share of 40%. Within the liner market, plastic liners are the larger sector representing 65% of the market, having seen a small loss in share to rubber liners, due to more competitive retail prices. The rubber liner market is a significant part of the liner market and is generally viewed as the premium product. Most pre-formed ponds are plastic, although glass-fibre ponds account for 40% of the market.

The pumps market has seen some growth in middle range pumps (1000-3999 litres per hour) at the expense of smaller pumps (flow rates up to 999 litres per hour) as the price differentials between these two groups has lowered. The pumps market has performed better than the market average as this sector is not wholly reliant on new pond construction but will benefit from upgrading by existing pond owners.

The general accessories market has seen above average market growth due to good growth in fish foods and treatments. These products are often seen as essential purchases rather than 'extras' and have performed well in contrast to other sectors in the market, which have suffered poorer growth as a result of bad weather and lower consumer spending.

In the filtration systems market, combined units, which offer consumers significant benefits in terms of installation time and cost savings, have seen growth.

Pond accessories include products such as self-contained water features, which have seen some growth in the last 2 years, pond lighting, pebble pools and preformed watercourses.

Most of the leading suppliers in the pond equipment market are either specialists in the pond sector, or part of larger groups with interests in wider garden products. However, the market is attracting new entrants from other sectors, offering purpose-designed products. The market is also characterised by a number of imports, for example from Europe and the Far East, resulting in increased competition. Hozelock Cyprio is overall market leader in the sector, with an estimated share of around 21%. Blagdon, Oase, Tetra and Oasis are also leading suppliers, with shares of around 10-14%. The remainder of the market is made up of a large number of suppliers, some of which specialise in particular sectors of the market, for example, Firestone rubber liners and Atlantis glass fibre pre-formed ponds.

Specialist aquatic/water garden centres continue to dominate the distribution of pond equipment with an estimated 50% share. Garden Centres are also leading outlets, but many of these sell pond equipment through concessions run by specialist aquatic operations, such as World of Water and Maidenhead Aquatics. Mail order and DIY Multiples each account for relatively small shares, while landscape contractors are strong in the pond liner/pumps sectors. Specialist aquatic centres are anticipated to maintain their dominant position based on their extensive product range, knowledge and customer support.

Future prospects for pond equipment remain fairly positive after a poor performance during 2004-05 and the market is expected to see some improvement in 2006-08, albeit at relatively low growth rates of 4-5% when compared historically with the higher rates of growth seen in previous years. Increased competition has resulted in lower prices for consumers and so pond ownership is becoming more accessible to a larger number of people. Consumers are expected to continue to upgrade pond equipment, which should be especially beneficial in sectors such as filtration systems, where consumer awareness of these products and their benefits is increasing.

Large garden shows with water garden displays have also stimulated interest in water gardening as a leisure activity and this is expected to continue in the foreseeable future. Gardening programmes encourage more adventurous landscaping projects, even for relatively small gardens, which has seen the pond equipment market benefit. The economic climate in early 2006, however, is uncertain, with slowing consumer spending, a flat housing market and uncertain overseas markets, coupled with low interest rates and low inflation, but rising unemployment. Possible severe winter weather is expected to hamper pre-season sales, but future summer weather is obviously impossible to predict but will always play an important part in market performance in any given year. However, growth forecasts for 2006-08 are positive and the market is expected to grow to £43m at MSP by 2008.

TABLE OF CONTENTS

• 1. INTRODUCTION 6
• 2. SUMMARY 7
• 3. ECONOMIC ENVIRONMENT 10
  • 3.1 GDP 10
  • 3.2 INFLATION & INTEREST RATES 11
  • 3.3 UNEMPLOYMENT 12
  • 3.4 STERLING 12
  • 3.5 POPULATION PROFILE 13
  • 3.6 CONCLUSIONS 14
• 4. MARKET OVERVIEW 16
  • 4.1 DEFINITION 16
  • 4.2 MARKET BACKGROUND 16
  • 4.3 MARKET SIZE 18
  • 4.4 KEY MARKET INFLUENCES 21
    • 4.4.1 Housing Completions 21
    • 4.4.2 Property Transactions 23
    • 4.4.3 Household Consumption 24
• 5. PRODUCT MIX 27
  • 5.1 OVERVIEW 27
  • 5.2 PONDS 28
    • 5.2.1 Liners/Underlay 30
    • 5.2.2 Pre-formed Ponds 35
    • 5.2.3 Other Ponds 37
    • 5.2.4 Complete Pond Kits 38
  • 5.3 PUMPS 39
  • 5.4 GENERAL ACCESSORIES 43
    • 5.4.1 Fish food 45
    • 5.4.2 Pond treatments 47
    • 5.4.3 Other general accessories 48
  • 5.5 FILTRATION SYSTEMS 49
  • 5.6 POND ACCESSORIES 54
    • 5.6.1 Self-Contained Water Features and Ornamental Fountains 56
    • 5.6.2 Pre-formed Watercourses/Waterfalls 57
    • 5.6.3 Pond Lighting 58
    • 5.6.4 Other Pond Accessories 59
• 6. SUPPLIERS 61
  • 6.1 SUPPLIER OVERVIEW 61
  • 6.2 MARKET SHARES 64
    • 6.2.1 Liners/Underlay 64
    • 6.2.2 Pre-formed Ponds 65
    • 6.2.3 Pumps 65
    • 6.2.4 General Accessories 67
    • 6.2.5 Filtration Systems 69
    • 6.2.6 Pond Accessories 70
  • 6.3 MAJOR SUPPLIERS 72
    • 6.3.1 Hozelock Cyprio 72
    • 6.3.2 Blagdon/Interpet 72
    • 6.3.3 Oase 73
    • 6.3.4 Tetra 73
    • 6.3.5 Oasis 74
    • 6.3.6 Lotus/Trident 74
    • 6.3.7 Atlantis 75
    • 6.3.8 Firestone 76
    • 6.3.9 Laguna 76
    • 6.3.10 Ubbink 76
• 7. DISTRIBUTION 79
  • 7.1 DISTRIBUTION STRUCTURE 79
  • 7.2 MAJOR CHANNELS 81
  • 7.3 SPECIALIST AQUATIC/WATER GARDEN CENTRES 82
  • 7.4 GARDEN CENTRES 84
  • 7.5 DIRECT SELLING/MAIL ORDER/INTERNET 90
  • 7.6 DIY MULTIPLES 91
  • 7.7 LANDSCAPE CONTRACTORS 92
  • 7.8 WHOLESALERS/DISTRIBUTORS 93
• 8. FUTURE PROSPECTS 95

TABLES AND CHARTS

• CHART 1 UK POND EQUIPMENT MARKET 1998-2008 (£M MSP) 7
• CHART 2 INTEREST RATES AND INFLATION (CPI) FROM 1990-2008 12
• TABLE 3 EXCHANGE RATE FLUCTUATIONS 1997-2007 - THE POUND STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 13
• CHART 4 AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 2001 ('000) 14
• TABLE 5 UK POND EQUIPMENT MARKET 1998-2008 (£M MSP) 18
• TABLE 6 HOUSEBUILDING COMPLETIONS 1995-2004 GREAT BRITAIN ('000) 22
• TABLE 7 NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1998-2004 24
• CHART 8 PDI & SAVINGS RATIO AT CURRENT PRICES 1990-2006 25
• TABLE 9 RETAIL SALES INDICES - VALUE OF RETAIL SALES AT CURRENT PRICES - PREDOMINANTLY NON-FOOD STORES 1995-2003 26
• TABLE 10 UK POND EQUIPMENT MARKET BY PRODUCT SECTOR - BY VALUE 2005 27
• CHART 11 UK POND EQUIPMENT MARKET BY PRODUCT SECTOR - % MIX BY VALUE 2005 28
• TABLE 12 MARKET SIZE OF UK POND MARKET 1998-2008 (£M MSP) 29
• CHART 13 UK MARKET FOR PONDS - % MIX BY VALUE 2005 30
• CHART 14 LINERS MARKET SIZE BY MATERIAL - 2005 31
• CHART 15 UK MARKET FOR PRE-FORMED PONDS - % MIX BY VALUE 2005 35
• TABLE 16 MARKET SIZE OF UK PUMPS MARKET 1998-2008 (£M MSP) 39
• TABLE 17 UK MARKET FOR PUMPS - % PRODUCT MIX BY VALUE 2005 (£M MSP) 42
• TABLE 18 MARKET SIZE OF UK GENERAL ACCESSORIES MARKET 1998-2008 (£M MSP) 44
• CHART 19 UK MARKET FOR GENERAL ACCESSORIES - % MIX BY VALUE 2005 45
• TABLE 20 FILTRATION SYSTEM MARKET - SHARE BY TYPE OF SYSTEM - 2005 BY VALUE 50
• TABLE 21 MARKET SIZE OF UK FILTRATION SYSTEMS MARKET 1998-2008 (£M MSP) 52
• TABLE 22 MARKET SIZE OF UK POND ACCESSORIES MARKET 1998-2008 (£M MSP) 55
• TABLE 23 MAJOR SUPPLIERS PRODUCT RANGE - 2005 62
• TABLE 24 OVERALL MARKET SHARES OF LEADING SUPPLIERS - 2005 BY VALUE 63
• TABLE 25 BRAND NAMES OF MAJOR PLASTIC LINER SUPPLIERS - 2005 64
• TABLE 26 MARKET SHARES OF MAJOR PRE-FORMED POND SUPPLIERS 2005 65
• TABLE 27 MARKET SHARES OF MAJOR PUMP SUPPLIERS 2005 66
• TABLE 28 MARKET SHARES OF MAJOR GENERAL ACCESSORIES SUPPLIERS 2005 67
• TABLE 29 MAJOR SUPPLIERS OPERATING WITHIN THE GENERAL ACCESSORIES MARKET - 2005 68
• TABLE 30 MARKET SHARES OF MAJOR FILTRATION SYSTEMS SUPPLIERS 2005 69
• TABLE 31 MARKET SUPPLIERS OPERATING WITHIN THE POND ACCESSORIES MARKET - 2005 71
• CHART 32 DISTRIBUTION STRUCTURE FOR POND EQUIPMENT 80
• TABLE 33 DISTRIBUTION OF POND EQUIPMENT BY OUTLET - % BY VALUE 2005 81
• TABLE 34 GARDEN CENTRE MARKET SHARES 2003 BY VALUE 85
• CHART 35 DIY MULTIPLES MARKET SHARE 2003 92