Indian Bottled Water Industry

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By: Pranjali Singh

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Indian Bottled Water Industry

  1. 1. Indian Bottled Water Industry
  2. 2. Bottled Water IndustryWhat’s on Tap? Bottled Water Industry  Industry Overview  Past & Future Demand  Market Growth  Market Structure  Cost of Bottled Water  Per Capita Consumption  Leading Brands  Major Players  Growth Stories  Industry Standards Facts & Figures on Water Purifier  Past & Future Demand  Market growth rate  Market segmentation  Leading brands  Major players  Industry update 2
  3. 3. Bottled Water IndustryBottled Water Overview Bottled water industry, colloquially called, the mineral water industry, is a symbol of new life style emerging in India. Large segment of the population is struggling to get access to safe potable water supply, a new generation - especially in the urban areas - is getting accustomed to bottled water paying handsome prices. Major player existing in the industry with their multiple brands are Parle Bisleri, Parle Agro, Coca-cola, Pepsico, Kothari Beverages There are more than 180 brands in the unorganized sector. The small players account for nearly 19% of the total market.Bottled Industry - Market Segment Two Primary Market Segments  Retail – about 80% of the bottled water market *  Home/Office Delivery (HOD) PET segment is just over one-half the total bottled water volume. *  PET 52.8%,  HOD 34.3% 17.8%, 1-2.5 gal. 16.5%)  Vended 8% (not bottled water) 3 * Beverage Marketing Corp. - 2006
  4. 4. Bottled Water IndustryDemand - Bottled Water Demand : Past & Future Year Mn Cases The phenomenal increase in demand for 1995-1996 8.5 bottled water from just 2.0 mn cases in 1996-1997 11.5 1990-91 to 112 mn cases presently was 1997-1998 15.5 being boosted further by the concern and need for safe drinking water. 1998-1999 20 1999-2000 26 2000-2001 33 2001-2002 44.5 2002-2003 55.6 2003-2004 68.15 2004-2005 82 2005-2006 97 2006-2007 112.85 2007-2008 129.55 2008-2009 146.45 2009-2010 164.45 2014-2015 265 4
  5. 5. Bottled Water IndustryMarket Growth The bottled water market is growing at a Market Growth Rates rapid rate of around 20% a year (down from 50 to 60%). Year (%) At this growth rate, the Rs 7000 mn per 1990-91 – 1996-97 33.80 % year market is estimated to overtake the 1996-97 - 2001-02 31.10% soft drinks market soon. 2001-02 – 2006-07 20.50% Multinationals, Coca-Cola, Pepsi, Nestle 2004-05 – 2009-10 15.00% and others are trying to grab a significant share of the market. 2009-10 – 2014-15 10.00% 5
  6. 6. Bottled Water IndustryMarket Structure Market Segmentation Segment Share (%) North 25 East 10 West 40 South 25 6
  7. 7. Bottled Water IndustryCost of Bottled Water The formal bottled water business in India can be divided broadly into three segments in terms of cost:  Premium natural mineral water  Natural mineral water  Packaged drinking water. The amazing thing is that people are prepared to pay Rs. 10-12 for a litre of simple water - especially when the cost of material input is negligible. Cost of packaging is as high as 15% to 35% of the price of the product. 7
  8. 8. Bottled Water IndustryPer Capita consumption Per capita consumption of bottled water in India is less than half a litre per year, compared to 111 litres in France and 45 litres in the US. The consumption of smaller unit (500 ml) has increased perceptibly by around 140%. Even school children are carrying the 500-ml packs in their school-bags. The 20 litre jars have found phenomenal acceptance in households and in work places. These points to the future potential beyond the high growth. 8
  9. 9. Bottled Water IndustryLeading Brands Bailley Kingfisher Bisleri Jaldhara Peppy Minerelli Pondicherry Trupthi Himalayan Kristal Golden Valley Stream Oasis Evian Yes Aquafina Penguin Perrier Golden Eagle Kinley Stream Pure Life Ferra Relle 9
  10. 10. Bottled Water IndustryMajor Players Kothari BeveragesParle BisleriOther Players Mohan Meakin  Golden Mysore Breweries  Hello United Breweries  Dadi Group NDOB  S M Foods Mt Everest  Group Denone 10
  11. 11. Bottled Water IndustryGrowth Stories Bisleri was introduced in India 25 years ago by Parle Exports, the bottled water market saw virtually no activity till marketers of Frooti (Parle Agro) launched Bailley in 1993. Godrej Foods followed with its Golden Valley in 1994. Mohan Meakins and SKN Breweries also entered the market with Golden Eagle and Penguin mineral water. Bisleri and Bailley, both of Parle origin, enjoy about 50% market share and has become almost generic with the product. Bisleri was having a market share of about 60% in mid-2000, which dipped to 47% by mid- 2001. The company introduced the concept of home delivery for its 20 litre pack. The company also introduced 250 ml/300ml packages and cups which would help to expand the market. Bailley, a brand owned by Ramesh Chauhans brother Prakash Chauhan, and others including Kinley from Coca-Cola Yes from Kothari Beverages and Aquafina from Pepsi are the other significant brands. 11
  12. 12. Bottled Water IndustryGrowth Stories………(Cont’d) Nestle India, launched its Perrier as first brand and Span Pellegrino, Pure Life as second and third brands. Pure Life, is positioned at low-end segment where San Pellegrino and Perrier are positioned in the high-end segment. Pure Life brand is specially aimed at nearly 20 underdeveloped and developing countries. Over the last year, the brand has been launched in Pakistan, China and Thailand. In Pakistan, Pure Life is supposed to have gained a 70% share of the bottled water market. Premium bottled water market in India has brands like Evian, San Pelligrino, Perrier, priced between Rs 80 and Rs 110 per litre. The other segment is essentially purified water priced low at about Rs 10 a litre. It is crowded with numerous brands like Bisleri, Kinley, Aquafina, Himalaya, Hello. Coca-Cola has taken over the Pune-based 20-litre pack water business of Thermax Culligan Water Technologies, a 50:50 joint venture between Thermax India and Culligan of the US. Others entering into the fray included Britannia with Denone, Cadbury Schweppes with Schweppes Diamond Water and Pepsi with H2O. DS Foods launched a new variant of its natural spring water brand, Catch. 12
  13. 13. Bottled Water IndustryGrowth Stories………(Cont’d) Danone has launched its own mineral water brand, Evian, in India through a separate wholly-owned subsidiary, Danone India. Groupe Danone is globally the second-largest producer of mineral water in the world with brands such as Evian, Volvic, Ferrarelle Badoit, Font Vella, Aquaprima, among others. The Evian brand has been targeted at the premium end of the market and is available only in select outlets. Hello Mineral Water, a Delhi-based company introduced reusable dispensers. In 1994, Hello had also started offering hot and cold water dispensers for corporate offices. A major part (90%) of the companys 240,000 litre per day capacity is utilized by the bulk segment. Hello will soon face stiff competition from the Delhi-based Sriram Industry which has entered the bulk segment with its Bubble Top dispenser machines. Manikchand Group is diversifying its portfolio to launch bottled water. T-series Ganga will be re-launched in a better packing and repositioned as a Ganges holy water brand. The $13-billion French water giant Vivendi Waters arm, US Filter Corporation, has taken a controlling stake in Johnson Filtration System India. Balsara launched its Himalayan brand under Mount Everest Mineral Water. Mauritius- based Vashistha Ventures was acquiring a 37% stake in the Mount Everest Mineral Water. The Himalayan brand, claimed as natural spring water is mainly used by institutions like airlines, hotels, restaurants. 13
  14. 14. Bottled Water IndustryIndustry Standards The government decided towards end of the year 2000 to bring about stringent guidelines for packaged water. All companies were made to sell their products only under the BIS (Bureau of Industrial Standards) certification mark. The BIS certification was made mandatory for the segment from April 1, 2001. The bottled water is to be classified as "food" and has been brought under the Prevention of Food Adulteration Act. They would have to adhere to rules pertaining to colour, odour, taste, turbidity, total dissolved solids and aerobic microbial count. Resulted into; Coke have to do away with the certification Federation of Family Physicians Associations of India printed on its product. Visakhapatnam - based Life Line Aqua secured the BIS certification. To ensure quality that AusWater Purification of Australia had tied up with Shriram Institute of Industrial Research to set up a quality control laboratory in Uttar Pradesh. Thermax Culligan Water Technologies (JV of Thermax and Culligan International, USA), which had launched 20 litre bottles in the name of "Good Water Everflo", had also placed a quality control network in place. The outfit is now part of Coca-Cola. 14
  15. 15. Bottled Water IndustryFacts & Figures on Water Purifiers 15
  16. 16. Bottled Water IndustryWater Purifiers - Facts Demand : Past & Future Year Rs. Bn1995-1996 2.551996-1997 2.8 Market Growth Rates1997-1998 3.5 Year (%)1998-1999 4.21999-2000 5 1990-91 – 1996-97 16.00 %2000-2001 5.85 1996-97 - 2001-02 19.80%2001-2002 6.9 2001-02 – 2006-07 10.20%2002-2003 7.95 2004-05 – 2009-10 11.00%2003-2004 9 2009-10 – 2014-15 10.00%2004-2005 10.252005-2006 11.52006-2007 12.92007-2008 14.252008-2009 15.72009-2010 17.252014-2015 27.8 16
  17. 17. Bottled Water IndustryWater Purifiers – Market SegmentationM Market Segmentation Institutional Segment Share (%) 30% Domestic 70 Institutional 30 North 25 Domestic East 25 70% West 40 South 10 South North 10% 25% West 40% East 17 25%
  18. 18. Bottled Water IndustryWater Purifiers - Market Segmentation ……(Cont’d) Product On-Line 30% Product Variation Type Share (%) Off-line 70 On-line 30 Off-Line 70% Ultra violet 40 technology Resin based 60 technology Ultra violet technology 40% Resin based technology 60% 18
  19. 19. Bottled Water IndustryWater Purifiers - Leading Brands Aquapen Waterguard Pureline Autoguard Pure Sip Moniba UB Zero B Aquaguard Ultraline Aquarius Puripack Hello Bubble Top Puripack UV Alfa 19
  20. 20. Bottled Water Industry Water Purifiers - Major Players Ion Exchange PurelineAquatech International Kenstar (Videocon) Eureka Forbes Usha Shriram Brita Therma-Culligan Strategic Alliance Company Collaboration Singer Aquatech Aqua Pure Techgy, Moniba Anand USA Thermax Culligan Intl, USA Alco Industries Usha Shrirm Brila, Germany 20
  21. 21. Bottled Water IndustryWater Purifiers - Industry Updates Usha Shriram with its Brita water purifier already established, has launched Indias first digital water purifier - the Waterguard Digital in collaboration with Brita GmbH of Germany. Apart from killing disease-causing bacteria and virus the filter claims to dissolve hazardous organic pollutants, to ensure safe drinking water. Other features include a cartridge life indicator (on the LCD screen) detachable spill tray lamp life indicators and a computerized monitoring system (to control the purification process). In the market for water purifiers, Aquaguard from Eureka Forbes, remains the market leader, several others have made it to the market place. Proctor & Gamble (P&G) has also been planning to launch its international brand Pur - a water purification product. The product has been developed is close consultation with CDC (Centre for Disease Control and Prevention) and USAID. The product is expected to be highly useful for developing countries such as India. Hindustan Uni Lever (HUL) also forayed into the water business, with its water purifier device called Pure. It can be attached to the kitchen tap to purify potable water at minimum cost. HUL plans to take the purifiers to small metros, towns and cities so that it does not remain an urban phenomenon. Water purifiers (residential segment) are growing at 22-25% annually. It is a Rs. 5 to 6 bn industry, with Aquaguard cornering more than 50% of the market. The rest is divided among Kent RO, Pentair, Ion Exchange and others. 21
  22. 22. Bottled Water IndustrySources The Hindu India Stat.com Bottled water India.org Beverage Marketing Corp. International bottled water association 22
  23. 23. Bottled Water IndustryThank You!! Presented By:- Pranjali Singh (Research Analyst) 23

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