The document discusses the packaged drinking water industry in India. It saw phenomenal growth from 2 million cases in 1990-1991 to 76 million cases in 2004-2005. Key drivers of demand included tourism, growth of BPO/call centers, and increasing awareness of water pollution issues. Major players discussed include Coca-Cola's Kinley brand, Parle's Bisleri, and PepsiCo's Aquafina. The strategies and business models of these three industry leaders are analyzed in detail. The document also briefly discusses other players like Parle Agro's Bailley and new entrants Kingfisher and McDowell's drinking water brands.

1. 1
Packaged Drinking Water
Prof. Ramanuj Majumdar
IIM Calcutta
Oct 26th
2006

2. 2
Introduction
 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

3. 3
Demand Drivers
 Tourism
 Emergence of BPO and call centers
 Growth in food industry
 Aquifer depletion
 Water pollution
 Awareness and standard of living

4. 4
Segmentation
 Customers
• Individual buyer
• Bulk buyer
 Channel
• On-trade
• Off-trade

5. 5
Trends
 Manufacturing and packaging
• New SKU’s such as cups
• Jumbo home pack with spout
 Core consumers
• 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

6. 6
Trends
Market Segmentation Share (%)
0
10
20
30
40
50
60
70
80
Domestic Institutional
Segment
%
Market Segmentation
Share (%)

7. 7
Market Growth
Demand : Past & Future mn cases
0
50
100
150
200
250
300
90
-9119
92-9
319
94-9
519
96-9
719
98-9
920
00-0
120
02-0
320
04-0
520
06-0
720
08-0
920
14-1
5
Year
Cases(mn.)
Demand : Past
& Future mn
cases

8. 8
Competitive Scenario
Brand Company 2001 2002 2003 2004
Kinley Coca-Cola India Pvt Ltd 30.5 32.0 37.5 37.0
Bisleri Parle Bisleri Ltd 39.0 31.0 31.0 30.5
Aquafina
PepsiCo India Holdings
Pvt Ltd
13.5 13.0 15.5 15.0
Bailley Parle Agro Pvt Ltd 6.0 6.0 7.0 7.5
Private Label 1.0 2.0 2.0 2.0
Others 10.0 16.0 7.0 8.0
Total 100.0 100.0 100.0 100.0

9. 9
Coca-Cola’s Kinley

10. 10
Business Model
 Contract packing deals struck throughout the country
 Large number of takeovers in the large metros to
increase capacity
 Coca-Cola has 27 plants of which 8 are 100% owned
by CCI, 5 are with franchisees and 14 are of co-
packers
 Riding on the national Coca-Cola distribution
network

11. 11
Competitive Positioning
 Kinley’s slogan, ‘boond boond mein vishwas’
 Capitalized on the unreliability of ordinary piped
drinking water
 Targeted towards families and homes

12. 12
Parle’s Bisleri

13. 13
Business Model
 Parle Bisleri had 25 bottling units, a fleet of 2000
vehicles and 120,000 retail outlets spread across the
country.
 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.

14. 14
Competitive Positioning
 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.

15. 15
PepsiCo’s Aquafina

16. 16
Business Model
 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.

17. 17
Competitive Positioning
 Pepsi is India's highest selling brand of carbonates, as
well as the most popular soft drink overall.
 Strongly identified with energy and sports.

18. 18
Parle Agro’s Bailley

19. 19
Business Model
 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.

20. 20
Competitive Positioning
 The company re-launched Bailley in smaller bottles
and pouches.
• 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
schoolchildren.
• 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.

21. 21
New Entrants
 Kingfisher from United Breweries Ltd.
 McDowell’s No 1 mineral water from McDowell &
Co Ltd.
 Indian Railway Catering and Tourism Corporation
(IRCTC), a division of Indian railways, expanded the
network of its own brand of bottled water, Rail Neer.

22. 22
A Case Study
 Brands launched
• 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’
platform
- 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

23. 23
Critical Success Factors
 Sales and distribution
• No. of channels
• Influence over channel members
 Cost control
• Value proposition
• Marketing budgets
 Scale and size
• Economies of scale
• Bargaining power
 Innovative packaging
 Quality standards of product

24. 24
No, Break now!