indian bottled water industry

Indian Bottled Water Industry

Bottled Water Industry

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What’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


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Bottled 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)

* Beverage Marketing Corp. - 2006


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Demand - Bottled Water

The phenomenal increase in demand for bottled water from just 2.0 mn cases in 1990-91 to 112 mn cases presently was being boosted further by the concern and need for safe drinking water.

Demand : Past & Future

Year Mn Cases

1995-1996 8.5

1996-1997 11.5

1997-1998 15.5

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


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Market Growth

The bottled water market is growing at a rapid rate of around 20% a year (down from 50 to 60%).

At this growth rate, the Rs 7000 mn per year market is estimated to overtake the soft drinks market soon.

Multinationals, Coca-Cola, Pepsi, Nestle and others are trying to grab a significant share of the market.

Market Growth Rates

Year (%)

1990-91 – 1996-97 33.80 %

1996-97 - 2001-02 31.10%

2001-02 – 2006-07 20.50%

2004-05 – 2009-10 15.00%

2009-10 – 2014-15 10.00%


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Market Structure

Market Segmentation

Segment Share (%)

North 25

East 10

West 40

South 25


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Cost 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.


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Per 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.


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Leading Brands

Bailley

Stream

Golden Eagle

Penguin

Yes

Oasis

Kristal

Trupthi

Peppy Minerelli

Bisleri

Kingfisher

Pure Life

Kinley

Perrier

Aquafina

Evian

Golden Valley Stream

Himalayan

Pondicherry

Jaldhara

Ferra Relle


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Major Players

Other Players Mohan Meakin Mysore Breweries United Breweries NDOB Mt Everest

Golden Hello Dadi Group S M Foods Group Denone

Parle Bisleri

Kothari Beverages


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Growth 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 Chauhan's brother Prakash Chauhan, and others including Kinley from Coca-Cola Yes from Kothari Beverages and Aquafina from Pepsi are the other significant brands.


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Growth 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.


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Growth 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 company's 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 Water's 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.


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Industry 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.


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Facts & Figures on Water Purifiers


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Water Purifiers - FactsDemand : Past & Future

Year Rs. Bn

1995-1996 2.55

1996-1997 2.8

1997-1998 3.5

1998-1999 4.2

1999-2000 5

2000-2001 5.85

2001-2002 6.9

2002-2003 7.95

2003-2004 9

2004-2005 10.25

2005-2006 11.5

2006-2007 12.9

2007-2008 14.25

2008-2009 15.7

2009-2010 17.25

2014-2015 27.8

Market Growth Rates

Year (%)

1990-91 – 1996-97 16.00 %

1996-97 - 2001-02 19.80%

2001-02 – 2006-07 10.20%

2004-05 – 2009-10 11.00%

2009-10 – 2014-15 10.00%


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Water Purifiers – Market Segmentation

Market Segmentation

Segment Share (%)

Market Segmentation on the basis; Demographics

Geo-demographic

Domestic70%

Institutional30%

North25%

East25%

West40%

South10%

North 25

East 25

West 40

South 10

Domestic 70

Institutional 30


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Water Purifiers - Market Segmentation ……(Cont’d)

Off-line 70

On-line 30

Product

Ultra violet technology

40

Resin based technology

60

Off-Line70%

On-Line30%

Ultra violet technology

40%

Resin based technology

60%

Product Variation

Type Share (%)


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Water Purifiers - Leading Brands

Aquapen

Alfa

Bubble Top

Puripack

Ultraline

Zero B

Pure Sip

Pureline

Waterguard

Puripack UV

Hello

Aquarius

Aquaguard

Moniba UB

Autoguard


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Water Purifiers - Major Players

Strategic Alliance

Company Collaboration

Aquatech Aqua Pure Techgy, USA

Thermax Culligan Intl, USA

Usha Shrirm Brila, Germany

Aquatech International

Ion Exchange

Usha Shriram Brita

Eureka Forbes

Singer

Kenstar (Videocon)

Pureline

Moniba Anand

Alco Industries

Therma-Culligan


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Water Purifiers - Industry Updates

Usha Shriram with its Brita water purifier already established, has launched India's 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.


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Sources

The Hindu India Stat.com Bottled water India.org Beverage Marketing Corp. International bottled water association


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Thank You!!Presented By:-

Pranjali Singh

(Research Analyst)

indian bottled water industry

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