Packaged Drinking Water
Prof. Ramanuj Majumdar
Phenomenal increase in demand for bottled water from
just 2.0 mn cases in 1990-91 to 76 mn cases in 2004-05
Market growth rate of more than 20% a year
Annual revenues of more than Rs 12 billion
More than 180 brands in the unorganized sector.
Per capita consumption (per year) of bottled water
• India - less than half a litre
• US - 45 litres
• France - 111 litres
Emergence of BPO and call centers
Growth in food industry
Awareness and standard of living
Manufacturing and packaging
• New SKU’s such as cups
• Jumbo home pack with spout
• Shift from 1 litre bottles to 20 litre pack
Consolidation and expansion
• Coca Cola’s purchase of Good Water
• Parle investing Rs 2600 million in a new facility
Contract packing deals struck throughout the country
Large number of takeovers in the large metros to
Coca-Cola has 27 plants of which 8 are 100% owned
by CCI, 5 are with franchisees and 14 are of co-
Riding on the national Coca-Cola distribution
Kinley’s slogan, ‘boond boond mein vishwas’
Capitalized on the unreliability of ordinary piped
Targeted towards families and homes
Parle Bisleri had 25 bottling units, a fleet of 2000
vehicles and 120,000 retail outlets spread across the
Dual distribution strategy - penetrating smaller,
interior markets in rural India, and pushing the brand
in newer territories and roadside stalls in the metros.
Within the institutional segment, hotels, railway
stations and government offices are being tapped with
increased aggression now.
Does not presently have the ability to compete against the
multinationals on distribution or advertising.
Instead developing the 20 litre bulk water business
• Tender-driven supply deals, which guarantee a certain volume
off-take but do not necessarily deliver much value.
Three strategies being followed:
• Strength distribution in rural areas and explore new territories
• Competitive pricing
• Innovative packaging
Shifted from its initial “Pure and Safe” positioning to a
new “Play Safe” positioning.
Uses its distribution strength in carbonated brands to
push its fruit juice brands as well as bottled water via
the on-trade channel.
Exclusive contracts with many outlets and clubs
throughout the country.
Pepsi is India's highest selling brand of carbonates, as
well as the most popular soft drink overall.
Strongly identified with energy and sports.
Bailley’s price was higher than its competitors’ because it
brings its products from outside the city, for which it has
to pay an entry tax, the octroi.
It has set up a PET plant in Silvassa, with an investment
of Rs120 million.
• A new 30 mm exclusive neck for the PET bottles, which cannot
easily be duplicated, in an effort to fight the counterfeit trade.
It moved into bulk sales of 5 litres and 20 litres, with its
biggest sales areas being water-starved cities such as
Chennai in the South.
The company re-launched Bailley in smaller bottles
• Arrangements with Jet Airways to supply 200 ml bottles
for the airline's in-flight customers.
• A 330 ml bottle, priced at Rs 5, is targeted at
• A pouch of 200 ml priced at Re 1 is intended to introduce
bottled water to the masses.
A new value-added mineral water brand called
Bailley Plus is to be launched soon.
Kingfisher from United Breweries Ltd.
McDowell’s No 1 mineral water from McDowell &
Indian Railway Catering and Tourism Corporation
(IRCTC), a division of Indian railways, expanded the
network of its own brand of bottled water, Rail Neer.
A Case Study
• Premium upmarket brands
- The internationally renowned Perrier
- The sparkling mineral water brand, San Pellegrino
• Pure Life, the mass market bottled water brand
- Initially positioned on the purity plank and targeted at ‘family’
- Modified later and repositioned on the ‘stay active and fitness’
- Priced at Rs 12 (higher than Kinley and Aquafina)
Portfolio taken off market in 2003 – Why?
• Inadequate distribution infrastructure
• Poor returns due to low margins
Critical Success Factors
Sales and distribution
• No. of channels
• Influence over channel members
• Value proposition
• Marketing budgets
Scale and size
• Economies of scale
• Bargaining power
Quality standards of product