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BUSINESS: BOTTLED WATER
Few Meet Quality Specifications
A
natural spill-over of the boom in the bottled water industry has been
the entry of many faceless, me-too players in the market. In an unorganised
industry amid allegations of tap water being passed off as "safe,
drinking water", credibility is a major issue. A study on bottled
water published by the Ahmedabad-based Consumer Education and Research
Centre as a test report in its Insight magazine (January-February 1998)
said of the 13 known brands, only three conformed to all the specifications.
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WATER WORKS
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# There
are around 500 players in the market.
# The Delhi market has at least 40 brands while Mumbai has 60.
# The unbranded bottled water market is estimated at about Rs 400
crore. |
Says Pritee Shah, editor, Insight: "Manufacturers
of bottled drinking water were selling water without any test on its potability.
None of the brands tested was free from bacteria, though all were found
to be non-pathogenic (not disease-causing). This disputed the claims of
some brands of being "germ-free" and "100 per cent bacteria
free". However, all of them were free from pesticide residues and
microbiological contamination." The Government's March 29, 2001 deadline
for mandatory Bureau of Indian Standards (BIS) certification and a PFA
licence for all players is over (see box). The standards for packaging
and bottles to be used have also been specified. Things threaten to get
tougher for small players, already pushed into a corner by the overbearing
presence of water majors like Bisleri and Bailley (No. 2 in the national
market in sales volume). The advent of the international majors can't
bode well for this lot.
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"Our company
will grow by an estimated 200 per cent this year."
Ramesh Chauhan, Parle
Bisleri
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All the multinationals mean serious business.
Paul Popelier, Nestle's vice president, water business, says his company's
decision to enter the market is long-term. Nestle's water plant at Samalkha
in Haryana conducts "over 100 microbiological and chemical tests
every day" to ensure the purity and consistency of water, the company
claims. For all this, they charge Rs 12 for a 1-litre pack (Rs 2 higher
than the market standard). Distribution is where Bisleri scores, and Nestle,
like the others, is looking for ways to strengthen its own network. Besides
grocers, general stores, bakeries and tobacco kiosks, the company is looking
at developing alternate trade channels like sweet-meat shops, canteens
and dhabas.
More bottling plants in a number of other locations
is another imperative. Pepsi Foods India started its Aquafina line in
Roha, Maharashtra, in 1999 and started distribution "in select markets"
in June last year. New bottling plants are coming up in Kosi, Bazpur,
Kolkata and Bangalore. Aquafina, available in 750 ml and 1 litre bottles,
claims to be "neck to neck" with its soft drink competitor Coca-Cola
in the water segment.
That's a claim Coca-Cola might like to contest.
They've had to do away with the doctor's certification embossed on the
bottles, but they seem to be doing all right. Says Shouvik Ganguly, Coca-Cola's
marketing manager (brands): "We are already No. 2 in the retail pack
segment (half-litre and 1 litre) with a market share of 3 per cent."
Kinley has three company-owned bottling plants located close to Delhi,
Mumbai and Bangalore and expects "to contribute about 5 per cent
of Coca Cola's turnover (Rs 3,000 crore) this year".
The best non-numerical proof that there is a
lot of action happening in the water business comes in the form of a newly
launched magazine. Everything About Water is about, well, everything about
the water business. They put out 80 pages of that twice every month. That's
how happening water is.
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