2. The Structure,
Economics and
Concerns
of the
Indian
Bottled Water
Industry

3. The Bottled Water Industry is one of India's fastest
growing industrial sectors. Between 1999 and 2004,
the Indian bottled water market grew at a
compound annual growth rate (CAGR) of 25 per
cent - the highest in the world. The total annual
bottled water consumption in India had tripled to 5
billion litres in 2004 from 1.5 billion litres in 1999.

4. •Water that can be considered fit for human
consumption is called potable water.
•Every person needs good quality potable water.
•Water is an
important
necessity for life.

5. •Millions of people,
both in rural and
urban India, suffer
from inadequate or no
tap water supply.
•Even some parts of Mumbai, the country's financial
capital, get a mere two hours of daily water supply.
•The city's Virar suburb gets ONLY 45 minutes supply.

6. •Still, the water supplied in our
homes is NOT FIT for direct
consumption and most homes
use water purification systems
due to this reason.
•However, even the option of such personal water
purification system is not always available, for example,
at public places- bus stands, railway stations, metro
stations etc.

7. Thus, the failure of the government to provide basic
water services has opened the door to private
companies and vendors filling a critical need at a very
high cost to consumers through BOTTLED WATER.

8. The situation is so amazing that
people are prepared to pay Rs. 15-
20 for a litre of water-in India
especially when the cost of
material input (0.25 paisa per litre
excluding labors cost) is
insignificance before the price of
the product.
Up to 40% of bottled water comes
from the same source as tap
water, but is sold back to
consumers at hundreds of times
the cost

9. 0
10
20
30
40
50
60
70
80
90
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
GROWTH OF BOTTLED WATER DEMAND IN INDIA
MILLION CASES

10. Variety of packages
Bottled water is sold in a variety of packages:
• pouches and glasses,
• 330 ml bottles,
• 500 ml bottles,
• one- litre bottles and
• 20- to 50-litre bulk water packs.

11. The formal bottled water business in India
can be divided broadly into three
segments in terms of cost and type:

12. 1. Premium natural mineral water includes brands such
as Evian, San Pelligrino and Perrier, which are imported
and priced between Rs.80 and Rs.110 a litre.

13. 2. Natural mineral water, also known as
mountain water, with brands such as
Himalayan and Catch, is priced around Rs.20
a litre.

14. 3.Packaged drinking water, which is nothing but
treated water, is the biggest segment and
includes brands such as Parle, Bisleri, Coca-Cola's
Kinley and PepsiCo's Aquafina. They are priced in
the range of Rs.10-15 a litre.

15. The FDA also classifies some bottled
water according to its origin.

16. Tap Water Some
bottled water also
comes from municipal
sources--in other
words--the tap.
Municipal water is
usually treated before
it is bottled.
Well water. Water from a hole
bored or drilled into the ground,
which taps into an aquifer.
Spring water Derived from an underground formation
from which water flows naturally to the earth's surface.
Spring water must be collected only at the spring or through
a borehole tapping the underground formation feeding the
spring.
Mineral water. Water
from an underground
source that contains at
least 250 parts per
million total dissolved
solids. Minerals and
trace elements must
come from the source of
the underground water.
They cannot be added
later.
Artesian well water Water from a well
that taps an aquifer--layers of porous rock,
sand and earth that contain water--which is
under pressure from surrounding upper
layers of rock or clay.

17. Bottled water has been treated by distillation, reverse osmosis, or other
suitable process and that meets the definition of "purified water". The
bottled water treatments include:
* Distillation. In this process, water is turned into a vapor. Since
minerals are too heavy to vaporize, they are left behind, and the vapors
are condensed into water again.
* Reverse osmosis. Water is forced through membranes to remove
minerals in the water.
* Absolute 1 micron filtration. Water flows through filters that remove
particles larger than one micron in size, such as "Cryptosporidium", a
parasitic protozoan.
* Ozonation. Bottlers of all types of waters typically use ozone gas, an
antimicrobial agent, to disinfect the water instead of chlorine, since
chlorine can leave residual taste and odor to the water.

18. Cap cost
Bottle cost
Treatment cost
Label cost
Carton cost
Transportation cost
Other costs (eg. Tape
& case)
Total cost excluding
labour
Total cost to
manufacturer
Selling cost
Rs. 0.25
Rs. 1.5-2.5
Rs. 0.10-0.25
Rs.0.15-0.25
Rs.0.50
Rs.0.10-0.25
Rs. 0.25
Rs.3.5 (approx)
Rs.4.75 (approx)
Rs.10-15

19. WHY IS THERE A GROWING NEED FOR
BOTTLED WATER?
•Lack of role of government in providing good quality drinking
water.
•Scarcity of pure and safe water
•Urbanization
•Increasing water pollution
•Growing number of cases of water borne diseases
•Scarcity of potable and wholesome water at railway stations,
tourists spots, etc.

22. Indians are currently spending about $330m a year on bottled water, analysts
estimate.
The packaged water market constitutes 15 per cent of the overall packaged
beverage industry
15%
15%
12%
12%
15%
11%
20%
CARBONATED SOFT DRINKS
COFFEE
MILK
TEA
BOTTLED WATER
FRUIT BEVERAGES
OTHERS
SOURCE: beverage marketing corporation

23. INDIA??
What is per capita consumption?

24. •In India, the per capita
bottled water
consumption is still quite
low - less than five litres a
year as compared to the
global average of 24 litres.
However, this does not reflect
the huge market for bottled
water in India, this number is
low because of the large
population of our country.

25. The total annual bottled
water consumption has
risen rapidly in recent
times - it has tripled
between 1999 and 2004 -
from about 1.5 billion
litres to five billion litres
•India ranks in the top 10
largest bottled water
consumers in the world.

27. ASIA
EUROPE
NORTH AMERICA
OTHERS
SOURCE: Beverage Marketing Corporation
Global Bottled Water Sales 2011
Currently, the natural bottled water market is growing at a
phenomenal 40-50% a year in Asia and particularly in India.

30. However, the
bottling plants are
concentrated in
the southern
region - of the
approximately
1,200 bottling
water plants in
India, 600 are in
Tamil Nadu
The western region accounts for 40 per cent
of the market and the eastern region just 10.
GEOGRAPHICAL
DISTRIBUTION

31. In south India, thousands of fuel trucks converted to
be water carriers sell ground water to
households and establishments at about Rs.500 for
5,000 litres. More than 13,000 tankers carry water
drawn from farmland surrounding Chennai, according
a social activist R Srinivasan. He estimates a $148
million tanker industry is cashing in on Chennai's
acute water scarcity. The story is replicated
across India, including in New Delhi.
But a major problem is southern India, especially
Tamil Nadu, is water starved.

33. The branded
bottled water
category is 40 %
of the market and
non- branded
contributes to
60% of the
market.
40%
60%
BRANDED
NON BRANDED
MARKET
SHARE
Presently, this market is estimated at Rs 8,000 crore
The overall packaged bottled water industry in India is
estimated to touch the Rs 10,000 crore mark in the
2012-13 fiscal
This could touch Rs15,000 crore by 2015

34. The current domestic market is split
between three sets of players –
1. national brands with a pan India presence worth
around Rs 4,000 crore,
2. local brands manufactured by registered plants
but restricted to regions estimated to have a
combined turnover of Rs 2,400 crore and
3. unorganized local brands estimated at Rs 1,600
crore.

35. The market leader is Bisleri International, which boasts a 60%
share. It is followed by Coca- Coca’s Kinley (around 25%) and
PepsiCo’s Aquafina (around 10%).

36. The non-traditional
category, or bulk packs,
(with over 5 litre capacity)
is growing rapidly, and has
a current share of over
40% share.
The rising trend of bulk
water consumption in
homes and institutional
segments is estimated to
pave the way for bulk
water packs to acquire
half of the total bottled
water market within next
four-five years

37. Mineral bottled water in India under the
name 'Bisleri' was first introduced in
Mumbai by Bisleri Ltd., a company of
Italian origin in 1965. Mineral bottled
water were in glass bottles in two varieties
- bubbly and still in 1965 This company was
started by Signor Felice Bisleri who first
brought the idea of selling bottled water in
India.
S. F. Bisleri

38. Parle bought over Bisleri (India) Ltd. In
1969 and started bottling Mineral
water in glass bottles under the brand
name 'Bisleri'.
Later Parle switched over to PVC non-
returnable bottles and finally
advanced to PET containers.

39. Since 1995 Mr. Ramesh J.
Chauhan started expanding
Bisleri operations substantially
and the turn over has multiplied
more than 20 times over a
period of 10 years and the
average growth rate has been
around 40% over this period.
Presently it have 8 plants and 11
franchisees all over India. Bisleri
command a 60% market share of
the organized market.

40. In India around 100 companies sell an estimated 424 million litres
of bottled water valued at around Rs 200 crore in the country
annually.
Most bottlers claim that their water is 100 per cent bacteria-free,
safe, tastier and healthier.
But is the water in these bottles really safe to drink? Do they
conform to international or national standards?

41. This question is not easy to answer as the definition of
‘SAFE’ in terms of Indian law is ambiguous.
Indian norms regarding packaged water are not quantified.
Drinking water norms of BIS say “pesticides should be
absent’
Packaged water norms say “ below detectable limits”

42. So, Ahmedabad-based Consumer Education and Research
Society (CERS), an independent non-profit institution with a
sophisticated product-testing laboratory, recently carried
out a detailed study on major brands of bottled water
available in the country keeping european standards in
mind.
The results were frightening…

43. 0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
PESTICIDE RESIDUES (mg/L)
european limit (0.0005mg/ml)

45. Prices of water and water services will keep on increasing because
most of our public water utilities will soon be privatized by the
government.

46. It is possible that water will be the next battleground among
monopoly capitalists and even among nations, like it is with oil today.
Paanii!!!

49. Akash Deep Choudhary
Ankur Bhardwaj
MBA 1 A 2012