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BUSINESS: BOTTLED WATER
Liquid Asset
The Rs 700-crore water business, growing at 70 per
cent every year, is attracting a flood of players. They now have to play
pure or go bust.
By Methil Renuka
Suddenly
everybody wants to sell purity. There's good money to be made; the market
is around Rs 700 crore and growing at 70 per cent every year. Last year
alone 150 players jumped in the fray for a slice of the pie. The branded
bottled water segment is, well, wet and sexy now.
Which is a change from 1993 when a Mr Ramesh
Chauhan sold off Parle's soft-drink brands (including Thums Up) to the
Coca-Cola Company and decided to focus on the mineral water business.
"People laughed at us in the beginning," says Chauhan. The product,
they said, was too niche. Who in India, apart from filmstars and fivestar
hotels and foreigners with weak stomachs, would spend money on bottled
water of all things?
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"Our
company is focusing on all non-alcoholic commercial beverages."
Shouvik Ganguly,
Coca-Cola
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Everybody did. Bisleri, Chauhan's product in
pet (polyethylene terepthalate) bottle, is now a Rs 400-crore company
with, he says, "a 60 per cent share" in the branded market.
He predicts his company will hit the Rs 1,000 crore mark in another two
years. He also prophecies, "The bottled water market will outstrip
the carbonated drinks market in three years. Today, the Railways itself
has 1,250 brands of water." According to an ORG-MARG report (January-December
2000), mineral water is 14 per cent of the turnover (Rs 6,000 crore) of
the bottled soft-drink industry, with per capita consumption of mineral
water in India at 0.5 litre every year.
Given the figures, no one is likely to laugh
at the seemingly incongruous vision of water over soft-drinks now. Every
MNC from Pepsi (Aquafina) to Coca-Cola (Kinley) to Nestle (PureLife) has
already tried to make a splash in the past year. The USP of all players
boils down to purity and safety, with each vying for the same consumer
trust. This has forced the action to shift to things like compactable
(crushable) packaging, proprietary design, tamper-proof seals and sophisticated
water treatment. Jargon rules: while someone does it by ozonisation, others
plumb for demineralisation and reverse osmosis to eliminate pathogens,
impurities and reduce the total dissolved solids in water.
First-mover and market leader Parle Bisleri
is beginning to feel the heat of competition. It has made a concerted
move from railway platforms, retailers and floating tourists to a 50-crore
target market in the home segment, and is trying to "consolidate"
its position with trendier ad campaigns to give water a new "young"
face. In keeping with that image make-over, its catch-phrase from "Pure
and Safe" has been changed to "Play Safe", wherever you
are. Even if you're in the sack.
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"The new standards will separate the quality players from the rest."
Vibha Rishi,
Pepsi Foods India Ltd
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It's an approach that finds favour with others.
Says Suveen Sahib, area manager, south Asia, of French major Danone which
markets the Evian mineral water (Rs 98 per litre) as "an alternate
beverage for lifestyle and fitness needs" in India: "People
have started associating bottled water with good health. Today, we have
500 families in Mumbai spending anything from Rs 1,000 to Rs 10,000 a
month on our water brand."
But selling bottled water was not easy to start
with. "It took a lot of unlearning to get a soft drink mind to think
in the water perspective," recalls Chauhan. It also required some
sound convincing skills-and almost six months-to get his men to believe
that a growth of 200 per cent was indeed possible. The potential existed,
of course, given the legendary poor quality of tap water and the public
fear about the safety of civic water. Now, Bisleri sells nine packs from
300 ml to 20 litre, and has entered the home segment by introducing a
first-of-its-kind home delivery system for its 20 litre jumbo jars through
its fleet of 2,000 trucks. With visibility in over 1.2 lakh retail outlets
across the country, Chauhan hit on the home segment because "retail
shops are getting crowded and there's good money in the home business".
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