Section – A

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 Introduction
Only three decades ago few knew about mineral or spring water, and fewer still
thought that one day most Canadians would spend a lot of money to buy it!

Water forms an essential part of every human being. After air, water is the most
important necessity for life. Water plays a number of functions for the body. It serves
as the body’s transportation system, it acts as a lubricant, it regulates the body
temperature etc.

The eulogy for water is an unending thing. In fact, more than 2/3rd of the human body
is made of water. The importance of water for human body can be well accessed from
the fact that if the amount of water is our body is reduced by just 1-2%, we feel very
thirsty. If it’s reduced by 5%, our skin will shrink and we will have difficulty moving
our muscles and if it’s reduced by 10%, we will die.

Moreover with this commodity being a human necessity it makes best sense to do
business in. As a normal human being requires on an average needs 2-3 litres of water
everyday and world population is more than obn (growing at 2-3% annually), the
business opportunity is humongous and the potential is largely untapped.

Since ancient time people have used water from mineral spring, especially hot
springs, for bathing due to its supposed therapeutic value for rheumatism, arthritis,
skin diseases, and various other ailments. Depending on the temperature of the water,
the location, the altitude, and the climate at the spring, it can be used to cure different
ailments. This started the trend of using mineral water for drinking purpose to exploit
the therapeutic value of the water. This trend started gaining momentum in mid 1970s
and since then large quantities of bottled water from mineral springs in France and
other European countries are exported every year.

The bottled water industry is estimated to be a whopping Rs 1600 crore business. It

has grown at a rate of 38-40% annually over the past four years. Initially pitched at
the well-heeled, bottled mineral water brands like the French-manufactured Danone

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were promoted at clubs, fitness centers, cinemas, department stores, malls, ice-cream
parlors, cafes and retail sports outlets, besides restaurants, hotels and supermarkets,
with a price tag of Rs 70 for a 1 litre bottle. Other brands later began pitching for the
larger middle class and lower-middle class markets.

The safety of bottled drinking water

While the term bottled water is widely used, the term packaged water is perhaps more
accurate. Water sold in countries for consumption can come in cans, laminated boxes
and even plastic bags. However, bottled water is most commonly sold in glass or
disposable plastic bottles. Bottled water also comes in various sizes from single
servings to large carbouys holding up to 80 litres. Depending on the climate, physical
activity and culture, the drinking-water needs for individuals vary, but for high
consumers it is estimated to be about two litres per day for a 60 kg person and one
litre per day for a 10 kg child.

Drinking-water may be contaminated by a range of chemical, microbial and physical

hazards that could pose risks to health if they are present at high levels. Examples of
chemical hazards include lead, arsenic and benzene. Microbial hazards, include
bacteria, viruses and parasites, such as Vibrio cholerae, hepatitis A virus, and
Cryptosporidium partum, respectively. Physical hazards include glass chips and metal
fragments. Because of the large number of possible hazards in drinking-water, the
development of standards for drinking-water requires significant resources and
expertise, which many countries are unable to afford. Fortunately, guidance is
available at the international level.

The World Health Organization (WHO) publishes Guidelines for Drinking-water

Quality which many countries use as the basis to establish their own national
standards. The Guidelines represent a scientific assessment of the risks to health from
biological and chemical constituents of drinking-water and of the effectiveness of
associated control measures. WHO recommends that social, economic and
environmental factors be taken into account through a risk-benefit approach when
adapting the Guideline values to national standard. As the WHO Guidelines for
Drinking-water Quality are meant to be the scientific point of departure for standards

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development, including bottled water, actual standards will sometimes vary from the
Guidelines.

These facts about water added to the growing number of cases of water borne
diseases, increasing water pollution, increasing urbanization, increasing scarcity of
pure and safe water etc. have made the bottled water business quite lucrative. In
addition with getting pure drinking water from municipal taps in cities and towns
becoming a luxury the scenario has become so lucrative in business sense that the
opportunity is being misused by a number of companies especially in our country.

The use by wider section of population has also helped growth

of this industry.
Earlier it was privileged of the affluent class and foreign tourist and highly health
conscious people but the present decade, has witnessed increasing popularity among
average consumers, increasing leaving standards, disposable income, education and
awareness among the consumers domestic and foreign tourist, sophisticated business
houses and offices has sky rocketed the sales of bottled water in recent years.

Scarcity of potable and wholesome water at railway stations, tourists spots, and role
of tourism corp. etc. has also added to the growth. There is high scarcity index of
ground water in coastal areas and higher concentration of objectionable inorganic
constituents in many parts of country. This again enhanced the need for bottled
drinking.

The growing demand for bottled water speaks volumes of the scarcity of clean
drinking water and the quality of tap water. It has become an icon of healthy lifestyle
emerging in India. It is the pet material used in bottled water that makes a big
difference in taste. Almost all has traces of plastic flavor. The interesting scenario is
that we have, on the one hand, a vast majority of population which is struggling hard
to get access to potable water and on other, the new generation concentrated in urban
areas getting accustomed to bottled water ‘culture’ even though it means they have to
pay through their nose for it. Selling ‘safety’ –i.e. pure and simple water- has now
become one of the fastest growing industries in India despite the harsh truth it is build

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on the foundation of bad governance, inequality and obvious exploitation. However
bottled water provides the distance advantages of convenient packing, consistent
quality and is ubiquitous.

Market Explosion and Public Perception

This particular industry in India has never locked back after the economic
liberalization process of 1991-92. in fact the fastest growth in the consumption of
bottled water in the world has been recorded in India according to a new study
conducted by the US based earth policy institute. It even question the rising thirst for
bottled water with consumption tripling in India and more than doubling in china over
the past five years.

The sales of bottled water have exploded globally particularly in Europe, North
America and Canada in recent years, largely as a result of positive public perception
on the safety of mineral water. The corporate control and distribution over this
important liquid asset is growing as brisk rate in India. According to Bureau of Indian
standards (BIS), there are 1200 bottling plants (out of which 600 are in the state of
Tamil Nadu) and 200 Brands of packed drinking water across the country (nearly 80%
of which are local) batting over the markets which amply signifies the market is big
even by international standards. At 40% significant growth rate, the market is
expected to humble the fizzy drinks market soon. Nevertheless, in India the per capita
bottled water consumption is still quite low-less than five liters a years as compared to
the global average of 24 liters.

These are boom time for the Indian bottled water industry- more so because the
economics are sound. India is the tenth largest bottled water consumer in the world.
By taking into account the per capita water consumption of France (111 liter) and US
(45 liter) the future potential of our country in this sector is immense- there cannot be
anything more significant for the Indian economy. The consumption of smaller units
of 500 ml has increased by around 140% perceptibly. Even school children are
carrying the 500ml packs in their school bags. The 20 liter bulk water jars have found

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phenomenal acceptance in household and at workplace. Thus targeting the niche
audience (market) applied to the bottled water industry. With the growing market size,
one can imagine the employment opportunity being created with the surge in bottled
water industry.

Leading Brands, Price Range and Market Share

The bottled water market is dominated by major player such as coca-cola, PepsiCo,
Parle Agro, K. K. Beverages, Manikchand, Tata- Mount Everest although we have a
large number of small players. Parle was the pioneer among the major player when it
first launched in India,35 years ago.

Distribution vs. promotion

Parle’s bisleri has become a famous generic name like Xerox and Dalda. This
undisputed market leader has been looking to different but distribution is the key in
this low margin and high volume market. And since bottled water stated out as a
prestige product in India, companies offered retail margin of 20 to 40 % against 8 t0
10% on soft drinks. So promotional spends have become low, No wonder, the heavy
weight advertise, pepsi has not pushing advertising pedal for its water brand,
Aquafina. Time has come for companies to indulge in brand building activity by
squeezing retailer and distributor margins spend the money for advertising.

Market Structure

The Market Segmentation of Bottled Water in India

Segment Share (%)
North 25
East 10
West 40
South 25
Source: Indiastar.com

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In above table we show the market segmentation of this water across different regions
of the country assume that the consumption of bottled water indicates the property of
consumers in respective region.
The west region occupies the first place in the market while the south and the north
jointly occupy the second position. The market of east region is low. However, the
bulk of the bottling plants are concentrated in the southern region which is starved of
water, yet , a place like Chennai alone account for major part of total revenue.

Lucrative Business

What is amazing is that people are prepared to pay Rs. 10 for a liter of water-
especially when the cost of material input (0.25 paisa per liter excluding labors cost)
pales into insignificance before the price of the product. In nutshell, in manufacturing
bottled water, the major costs are not in the production of treated and purified water
but in the packing and marketing of it. Hence, the cost of packing can be as high as 15
to 35% of the price of the product. The cost of the bottle along cap and cartoon is the
single biggest cost between Rs. 2.50 and Rs. 3.75 for a one –little bottle. For water
sold in big plastic jars (20-50 liters), which are also reused, or in pouches, this cost is
much lower. This is precisely why company sell water at even Re. 1 a liter in a 20-25
liter jar and stills makes profits. Labor and establishment and marketing cost are
highly variable and depend on the location and size of the companies. Informal
sources indicate that the gross profits of this industry can be as much as between 20-
205%. The reason that companies do not have to bear the cost of the main row
material-water-has made this industry highly profitable.

Current Global Trends

Recent trend in bottle water industry include new product development, widespread
marketing and packaging efforts, and the emergence of new industries tapping into
bottle water, all aiming to gain markets further. The most conspicuous trend in the
bottled water industry is the development and flooding of a seemingly never ending
array of bottle water product. Among them are: bottle mineral water, spring water,
sparking water, well water, purified water, distilled water, vitamin infused water, mint

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flavored water, fruit-flavored water, hydrating water and now even super oxygenated
water and cosmeceutcal water. One Australian company even extracts water from
apples and oranges by freezing fruit juice and using a ’pressure chilling’ process to
separate the fruit from the water. Another significant trend is product marketing and
packing. Realizing the consumer cite taste, quality and purity as the top reasons for
drinking bottled water, bottles market and design bottlers to display their purity.
‘Straight from nature to you’ is indicative of untouched, pure natural water marketing.
Another popular ad slogan says that their bottle water is “so pure, [that they] promise
nothing. “ Other manufactures seek to carve out a new level in the bottled water
industry introducing high-end products. These bottles seek distinctions by marketing
their water origins, fortification or even bottle shapes, size and styles. Examples of
these include: bottle water that now comes in bullet shaped glass, icicle-shaped
plastic, see through labels, sports ball-sized water bottles and the ever-charging
unique cylindrical containers. Another packing trend in the bottled water industry is
multi-packs. As current bottled water consumption grows, more consumers are
turning to multi-packs to save time and money.

Overview
The cut-throat completion among the market players in packaged water industries has
come to stay in India. The share of the farm may dwindle if they don’t make any
concentrate effort to change its growth strategy as per the need of the hour.
Distribution has become critical for this industry due to the high volume and low
margin effort. The price may more or less remain strictly under this business as farms
are afraid of losing their customer to rival. The home segment and exploring of
country market the best avenues available for the farm to maximize the profit. Time
has come for the bottle water industries in the country to be innovative in their
flavors, the packaging design and promotion to attach highly conscientious customers.

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WHY PEOPLE DRINK BOTTLED WATER

 Alternative to other beverages

 Tre ndy
 Luxurious
 Convenience

 Worries about tap water

 “Bottled water is purer.”
 “Bottled water is just safer.”
 Differently regulated
 Hype, myth, and propaganda
 Perception of difference
 “Bottled water tastes better.”
 Placebo effect
 Caters to different “tastes” (preferences)
 Bottled water is better than tap water
 3 out of 4 cases, it is tap water

Source:
http://www.epa.gov/
http://www.cfsan.fda.gov/~dms/botwatr.html
(FDA/CFSAN website)
http://www.nrdc.org/water/drinking/

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SELECTED MACHINERY SPECIFICATIONS

1. Raw water storage tank.

2. Raw water feeding pump.
3. Multi graded sand filter.
4. Activated carbon filter.
5. Antiscalant dosing system.
6. Ultra violate disinfection system.
7. High pressure pump.
8. Reverse osmosis element.
9. Pressure vessel for element.
10. Electric control panel.
11. Micron filtration system.
12. Instruments & instrument panel.
13. Micron filtration for minerals controlling system.
14. Treated water transfer pump.
15. Treated water storage tank.
16. Fine polishing micron filtration system.
17. Ultra violet disinfection system.
18. Ozone generating set.
19. Ozone reacting set.
20. Ozone circulating pump.
21. R.O. membrane cleaning system.

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 Research Methodology
Research Objective
• Main Objective
o In depth study of Bottled water segment in beverages industry.

• Secondary Objective
o To find out over all market condition of bottled water segment.
o To find out opportunity in bottled water market.
o To find out future challenges for bottled water market.
o To study the Political, Economical, Social and Technological factor
affecting bottled water.
o To compare the market competition among different player.
o To find out future growth rate of bottled water market.
o To compare Indian bottled water market with Global market.
o To study the reason behind growth of the bottled water market.

Information Need:-
• Related to bottled water market
• Product history.
• Related to substitute product.
• Application of product.
• Global position of the market.
• Information about Brand portfolio in India.
• Macro environmental factor.
• Government policy related to bottled water market.
• Size and growth rate of the market and economy.
• Market position of player.
• Value chain of major companies.

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 • Opportunity and threats.

Research Design

It is a Descriptive Research design because our project includes points like

description of market characteristics or function rests totally on secondary data.

Data Collection and Source:-

• Based on Secondary Data
o Books, Magazine, News Articles, Websites, Search Engine and
Reference Report.

Limitation
• In market we have so many local brands but we have considered only major
brand of the market.
• The project is totally based on secondary data and there was nothing like
primary data.
• Time constraint.

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Section - B

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 Define Product
What is bottled water?

Drinking water: - water suitable for drinking.

Bottled water: - Drinking water (often spring water) that is put into bottles and
offered for sale.

Different types of bottled water: -

As per Encyclopedia Britannica, mineral water in defined as water that contains a
large quality of dissolved minerals or gases. The mineral water can be categorized
into mineral water and artificial mineral water.

Natural mineral water is obtained from natural springs & has a high content of
calcium carbonate, magnesium sulfate, potassium & sodium sulfate. It may also
contain gases like carbon dioxide or hydrogen sulfide. While mineral water produced
artificially by adding salts to distilled water or aerating it with carbon dioxide is called
artificial mineral water.

Mineral water is just one from of aerated water. It is water with high mineral & gas
content. Some of the minerals are Epsom salt, magnesia, iron, silica, boron, &
fluorine. The most common gasses found in mineral water are carbon dioxide &
hydrogen sulfide. It is mostly rainwater that has soaked into the ground & dissolved
the mineral matter.

While according to American & European Regional Codex Standard, a sample of

water is said to be natural mineral water only if: it is obtained directly from natural or
drilled sources from underground water – bearing strata. It is collected under
conditions, which guarantee the original natural bacteriological purity. It is bottled at
the point of emergence of the source with particular hygienic precautions. It is not
subjected to any chemical treatment.

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The bottled water Standard like FDA define the several different types of bottled
water based on specific characteristics of the product. Bottled water products meeting
the Standard of Identity may be labeled as bottled water or drinking water, or one or
more of the following terms:

Spring Water: - Bottled water derived from an underground formation from which
water flows naturally to the surface of the earth. Spring water must be collected only
at the spring or through a borehole tapping the underground formation feeding the
spring. Spring water collected with the use of an external force must be from the same
underground stratum as the spring and must have all the physical properties before
treatment, and be of the same composition and quality as the water that flows
naturally to the surface of the earth.

Purified Water: - Water that has been produced by distillation, deionization, reverse
osmosis or other suitable processes while meeting the definition of purified water in
the may be labeled as purified bottled water. Other suitable product names for bottled
water treated by one of the above processes may include "distilled water" if it is
produced by distillation, deionized water" if it is produced by deionization or "reverse
osmosis water" if the process used is reverse osmosis. Alternatively, "drinking water"
can be used with the blank being filled in with one of the terms defined in this
paragraph (e.g., "purified drinking water" or "distilled drinking water").

Mineral Water: - Bottled water containing not less than 250 parts per million total
dissolved solids may be labeled as mineral water. Mineral water is distinguished from
other types of bottled water by its constant level and relative proportions of mineral
and trace elements at the point of emergence from the source. No minerals can be
added to this product.

Sparkling Bottled Water: - Water that after treatment, and possible replacement
with carbon dioxide, contains the same amount of carbon dioxide that it had as it
emerged from the source. Sparkling bottled waters may be labeled as "sparkling
drinking water," "sparkling mineral water," "sparkling spring water," etc.

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Artesian Water/Artesian Well Water: - Bottled water from a well that taps a
confined aquifer (a water-bearing underground layer of rock or sand) in which the
water level stands at some height above the top of the aquifer.

Well Water: - Bottled water from a hole bored, drilled or otherwise constructed in
the ground, which taps the water aquifer.

Municipal/Tap Water: - We know it's the type of water piped right into your home.
While tap water isn't regulated it must meet the strict standards of the Environmental
Protection Agency (EPA). Municipal tap water is generally of excellent quality,
however, many people prefer the taste and enjoy the convenience of bottled water,
which, in most cases, undergoes additional processing and often retains the pleasant
characteristics of its natural source.

Bottled water different from Tap water: -

Bottled water is produced and distributed as a packaged food product and made
specifically for drinking. As a packaged food product, bottled water must adhere to
Good Manufacturing Practices (GMPs) required of all regulated food products as well
as specific GMPs unique to bottled water production and packaging. GMPs require
that each container of bottled water is produced in a sanitary environment and
packaged in sanitary, safety sealed containers. Bottled water is also subject to
misbranding and food adulteration provisions, which help ensure that consumers
receive safe, high quality bottled water and protects consumers from substandard
products.

In addition, members of the IBWA abide by the IBWA Model Code, which includes a
voluntary system called HACCP (Hazard Analysis and Critical Control Points).

Taste is another reason consumers choose bottled water. Chlorine is most often used
to disinfect tap water and can leave an aftertaste. Some bottlers use ozonation, a form

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of supercharged oxygen and/or ultraviolet light as the final disinfecting agent, neither
of which leaves an aftertaste.

Bottled water provides consumers with consistent safety, high quality, good taste and
convenient portability. To help ensure that bottled water is safe and of the highest
quality possible, all IBWA members use one or more of the following steps found in a
multi-barrier approach: source protection and monitoring, reverse osmosis,
distillation, filtration, ozonation and disinfection.

Bottled Water

Widely available in most countries bottled water is a relatively cheap and easy source
of safe drinking water. However, bottled water is only as safe as the source - you must
make sure that the seal on the bottle is unbroken as it is not unknown for locals to
refill empty bottles with tap water and try to sell them as new. There are recorded
instances of contaminated bottled water contributing to cholera epidemics.

• Carbonated Water is acidic enough (due to the dissolved carbon dioxide) to

kill contaminating bacteria. While not typically expensive, bottled water has
the disadvantage of being an additional expense, and is not always available.
Another downside to bottled water is that the plastic bottles are carried into the
mountains and none are ever carried out, thus producing a tremendous and
completely unnecessary waste disposal problem.

• Boiling is the most certain way of killing all microorganisms. The process of
heating water to a boil (212° F or 100° C) makes it hot enough long enough to
disinfect it, even at elevations as high as Everest Base Camp. You only need
to boil the water for a minute, even at high altitude. The disadvantage of
boiling water is that it requires time and equipment to heat the water.
• Chemical Purification adding chemicals to the drinking water kills
bacteria, microorganisms and viruses. This type of purification involves

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 adding a few drops or tablets to the water, shaking it and then letting it sit for a
certain period of time (usually ½ hour). There are 2 chemicals typically used
for chemical purification: Iodine and Chlorine.

• Iodine is available in many forms - in either tablets or crystals form, or as a

tincture - which makes it convenient to find, but can be confusing in knowing
ratios to use. Iodine has been shown to be very effective in inactivating
Giardia, but does not always work on killing Cryptosporidium. It is also a
very lightweight option, and can double as a necessary addition to your 1st Aid
Kit. Be aware that some people are allergic to iodine and cannot use it as a
form of water purification. Persons with thyroid problems or on lithium,
women over fifty, and pregnant women should consult their physician prior to
using iodine for purification. Also, some people who are allergic to shellfish
are allergic to iodine.

• Chlorine can be used for persons with iodine allergies or restrictions.

Chlorine is probably best used in an emergency situation. It is typically used in
larger quantities than iodine in order to purify the water, which often results in
an objectionable taste – even worse than the iodine taste. Chlorine is not
always effective against viruses. And it can be toxic in the event of an
overdose, so you need to be careful when diluting the solution.

Another disadvantage to chemical purification is that the killing effectiveness is

dependant on concentration of the chemical, temperature of the water, and contact
time. Cloudy water often requires higher concentrations of chemical to disinfect. The
colder the water, the less effective the chemical is as a purifying agent, so the water
needs to sit longer after treatment before drinking. Also, chemical purification often
adds a less favorable flavor to the water. Be aware that if you use flavor crystals (i.e.
Lemonade or Power Ade mix), this should be added after the recommended contact
time for purification but using them definitely helps neutralize the taste.

Source

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The water used is from protected well, an approved source which meets the Indian
standard IS:10500. The source is situated in an unpolluted area and well protected
from external contamination.

Purification
The water is processed with multi-stage purification processes such as -
Sand Filter, Activated Carbon Filter, Ultraviolet Disinfection, Ultra Filtration,
Reverse Osmosis, Ozonation.

Purification Processes

Sand Filter Activated Carbon Filter (ACF)

Eliminates load of total suspended Activated carbon is prepared by slowly

solids in the raw water.
heating coal or coconut shell. This
filter removes most of the organic
contamination and pesticide residuals
from the water. It also controls taste
and odour of water.

Ultraviolet Disinfection (UV) Ultra Filtration

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Water is exposed to UV light of
wavelength 245 nanometers (nm). A
dosage of 16000 microwatt/sq.cm. at
40°C for effective disinfection.
Reverse Osmosis
A high pressure membrane process to
eliminate dissolved impurities like
unwanted salts and retain minerals
which are essential to human body.
This done by carefully selecting the
membrane by a technology developed
by DIL.
Filtration
S.V.I.M. Kadi
Ultra filtration is a low pressure
membrane process that removes
dissolved organic macro molecules,
viruses, Pyrogen enzymes etc.
Ozonation
Ozonation is the strongest oxidizer and
disinfection agent which acts on broad
spectrum of microbiological organisms.
Oxyrich is disinfected by 0.3 ppm of
ozone. Ozone is 30000 times more
effective than chlorine. Use of chlorine
is eco unfriendly and produces THMs
(tri-halomethanes) in water, which can
cause cancer.
20
A water filter pumps water through a microscopic filter that is rated for a certain-size
organism. There are a number of devices on the market that filter out microorganisms.
The standard size rating is the micron (the period at the end of this sentence is about
600 microns). Depending on the micron rating of the filter, smaller organisms (like
viruses) can pass through. Be cautious when selecting a filter. You should know what
potential organisms you need to treat for. You don’t want to go to an area where a
virus like hepatitis it is present in the water (a problem in some developing countries)
with a filter that will handle only a larger organism like Giardia.

There is a difference between a water filter and a water purifier. Filters do not filter
out viruses, but there are water purifiers, like the PUR Scout, that pass the water
through both a filter and an iodine compound that kills any smaller organisms that
have passed through the filter. These purifiers kill all microorganisms down to 0.004
microns; however, even filters with purifiers added, have been shown to provide
incomplete disinfection of contaminated water. Also these filters with purifiers should
not be used by people who are allergic to iodine.

S.V.I.M. Kadi 21
 Define Substitute Product
and criteria for substitution
The real substitute of the bottled water is water pouches, coconut water and water
purifier and some far substitute like Fruit juice, Carbonated Soft Drinks. But talking
very specifically and precisely we can differentiate in two category Far substitute and
near substitute are as per below.

Close Substitute:
• Pouches water
• Coconut water
• Vending machines water
• Water purifier

Far substitute:
• Cold coffee
• Tea
• Alcoholic drinks
• Milk and Buttermilk
• Fruit juice
• Carbonated soft drink

From all information we review that not only bottled water market grow but also other
substitute product market also grow in the market.

S.V.I.M. Kadi 22
Criteria for Substitution:
Criteria of substitution as per our view are describe as per under.
• Availability
• Basic need of end user
• Affordability
• Seasons or climate condition
• Mind set of people
• Likes and perception

Above all are considered as a substitute criteria and all are define below.

Availability
This product need proper distribution channel because customer not loyal here
customer purchase product as per its own availability and in rural area people get
pouches easily so their market share is high in rural area.

Basic need of end user

End user basic need relative to bottled water is satisfy its thirst and customers satisfy
its need through fruit juice, Pouch water or carbonated soft drinks also.

Affordability
It is based on disposable income of the customer or family. When persons do not
afford bottled water then they divert for pouch water or any other low price substitute.
And also Indian people are more conscious about price.

Season or climate condition

In India generally people preferred hot drinks in winter and choose cold drinks and
juice in summer so it is totally based on the climate condition so the need of the
people is change as per climate changes.

S.V.I.M. Kadi 23
Mind set of people
Generally in India people are preferred tea or also offer tea to relatives so they not
easily choose bottled water at the time of thirst, and other side in foreign country
people preferred fruit juice or beer.

Likes and perception

This market is based on people perception. For example after know about pesticide in
bottled water people not go for bottled water but divert any other fruit juice or
coconut water.

A vending machine is a machine that dispenses purified water into customer's own
containers, again obviating the costs and environmental issues involved in
manufacturing, transporting, and disposing of, plastic bottles. When offered in low-
income areas, this practice makes purified water more affordable to local population.

S.V.I.M. Kadi 24
 Short History of Bottled Water
Man’s legendary quest for fresh water has led today to the convenience of bottle water
to meet the fast-paced life of modern peoples. Ours is the blue planet, and the
hallmark of life on Earth is water. But where did this colorless, odorless liquid first
come from?

10000 BC: “Bottled water” is born as mankind transports water in primitive vessels
and skins from natural spring sources to their dwellings.

218 BC: Hannibal rests his troops and slakes their thirst at source Perrier.

58 BC: Aqueduct delivered spring water refreshes Nero.

1002: Leif Erickson restocks his longboat with New World natural spring water.

1215: Signers of the Magna Carta toast to liberty with delicious water from local
springs.

1805: Napoleon keeps his spring water close at hand.

1845: Poland spring founded when summer visitors to the Maine resort wanted to
return home with the famed spring water.

1863: Perrier first bottled by decree of Napoleon ill for “the good of France.”

(Source: - http://www.nestle-watersna.com
http://www.finewaters.com)

S.V.I.M. Kadi 25
Recent discoveries in astrophysics suggest that water is not native to Earth but rather
were imported from the edges of our solar system as ice trapped in comets. Scientists
think this water was first delivered here more than four billion years ago. During the
meteor shower that gave the Moon most of its craters, Earth received five hundred
times more "hits" than its moon did; since the planet has a greater critical mass than
its satellite, Earth was also able to hold on to much of the water from the ice.

Eventually, water became one of the most important sub stances on Earth but for
civilizations to advance, it needed to be controlled. This process began about ten
thousand years ago with the development of agriculture, which required capturing,
storing, and distributing water.

The health benefits of water sources formed a less superstitious basis for appreciation
as Western civilization moved away from belief in gods and goddesses. Some sources
revered by pagans, such as Lourdes, became places of pilgrimage for health purposes
and retained some sense of mysticism.

With personal hygiene becoming a concern in late eighteenth century Europe, visits to
mineral springs, to drink or bathe in the curative waters, became fashionable. The
trend was set by the wealthy, who could afford to "take the waters".

Some of these destinations gained fame as "water hospitals" among them Contrex in
France and Fiuggi in Italy. Since the early eighteenth century, water from both these
springs was thought to be beneficial to kidney stones. By the nineteenth century,
numerous spa resorts were attracting the infirm and the idle vacationer. Many of these
resorts and springs live on today as familiar European brand names: Evian, San
Pellegrino, Perrier, Vittel, Vöslauer, Spa, Borsec, Chaudfontaine, Harrogate, and
many more.

Many well-known curative waters have been distributed throughout Europe as luxury
drinks since ancient Roman times. At first, the waters were typically free; the only
cost was shipping. But the owners of the now-famous spas discovered they could earn
revenue by selling the water for off-site use. This mineral water was sold in stoneware
jars, porcelain demi-jars, and, later, glass containers and bottles.

S.V.I.M. Kadi 26
Commercial exploitation of water sources began in France. Evian first opened a
thermal bath on the private estate of the king of Sardinia in 1824. The king authorized
sales of the water two years later, and a company was formed in 1829 to sell the
water. It was first bottled in earthenware; Evian did not begin bottling in glass until
1920.

Other European countries soon followed the French in selling their waters. England
introduced what’s thought to be its first bottled water, Malvern, at the Great
Exhibition of 1851 in London. Germany’s Apollinaris received a red triangle award
"an indication of outstanding quality"at a British trade show in 1892 and later
registered the symbol as its trademark. San Pellegrino packed 35,343 bottles during
1899, the Italian water’s first year of sales; by 1908 it was being exported throughout
the world, even to remote places like Peru, China, and Australia.1

The bottling of natural mineral waters reached its height in the late nineteenth
century; the rising popularity of "soda waters" then began to elbow mineral water out
of the market. The latter was at this time sold primarily as a curative and a luxury
drink for the wealthy.

Clever marketing strategies were applied to reinvigorate the natural bottled water
market. Evian again took the lead in the 1950s by selling its water with the powerful
claim, "to help lactating mothers and [provide] important minerals for infants."
Targeting a new generation of consumers showed great foresight, as this demographic
turned out to be the baby boomers, who took Evian to the top of the bottled mineral
water market.

1
http://www.nestle-watersna.com, http://www.finewaters.com

S.V.I.M. Kadi 27
 Product Life cycle (estimation
1990 to 2015*)
The stages through which individual products develop over time is called commonly
known as the "Product Life Cycle".

The classic product life cycle has four stages: introduction; growth; maturity and
decline
Table – 1
The Exponential Increase In Demand Bottled Water:1990-20152
Year Million Cases
1990-91 2.2
1991-92 2.6
1992-93 3.5
1993-94 4.7
1994-95 6.5
1995-96 8.5
1996-97 11.5
1997-98 15.5
1998-99 20
1999-2000 26
2000-01 33
2001-02 44.5
2002-03 55.6
2003-04 68.15
2004-05 82
2005-06 97
2006-07 112.85
2007-08 129.85
2008-09 146.8*
2009-10 164.45*
2014-15 265*

* Estimated Projects ( Prediction ) Source:indiastat.com

2
Advertising express May 2008, - pg- 55

S.V.I.M. Kadi 28
 300

250
million cases

200
150

100

50

00
-91

-94

-97

2 0 03
-04

2 0 06
-07

-10
-92

19 93

19 95
-96

19 98
-99

20 01
-02

-05

20 08
-09

-15
-

-
-20
91

94
95

97
98

00
90

92
93

96

01
02
03
04
05
06
07
08
09
14
99
19

19

20

20

20
19
19

19

19

20

20

20

20
19
year

(Source:- Advertising express May 2008, - pg- 55.)

Introduction Stage:
Here 1990 is select as a base year and from 1990 sales of Bottled water increase year
by year but not that much level up to 2004-05 so this stage covers under introduction
stage of bottled water industry. And after increase awareness among people and also
know about side effect of non purified water people diverse from tap water to bottled
water and this change increase sales of bottled water in market. In this stage firm
focus on branding and patent for maintain right to produce.

Growth Stage:
After 2005-06 bottled water sales increase in market and it shows growing stage of
the industry, because people are now use bottle water for status and for health safety.
Now in 2008 bottled water industry growing at a rate of 38% so it sales increase faster
as compared to past year so we can say that industry came under growth stage.
Maintain existing features and also add new things in product. Here broader audience
available for industry product.

S.V.I.M. Kadi 29
 Application of the Product
Application for the PAST

 Always water your plants during the early morning hours or

in the evening, when temperatures are cooler, to minimize
evaporation.
 Capture rainwater to water your plants.
 The leaves of plants and trees do not need to be watered. You
can therefore focus all the water on the roots of the plants
and trees to ensure that they absorb all of the water you are
giving them.3
 When you clean your fish tank, use the water you've drained
on your plants. The water is rich in nitrogen and phosphorus,
providing you with a free and effective fertilizer.
This also goes for water you boiled your pasta in for
example.
 The leaves of plants and trees do not need to be watered.
You can therefore focus all the water on the roots of the plants and trees to
ensure that they absorb all of the water you are giving them.
 Put your potted plants in a bucket or a sink full of water. Leave them for a few
minutes to allow the water to fully soak in and push out air trapped in the soil.

 Digging a small trench around the trees in your yard will allow the water to
soak in instead of running off.

 If you live in a dry area, or an area that has dry periods during the summer,
plant drought tolerant species that will survive with no or very little watering

3
http://www.wateryear2003.org

S.V.I.M. Kadi 30
Application for the PRESENT

 Different varieties of lawn grass have differing water

requirements. Consult your local nursery for varieties
which are appropriate to your area.
 When mowing the lawn, don't cut the grass shorter
than 2 cm. If you do, the grass won't have enough
leaf area to protect itself from the burning effects of
the sun.
 Lawn needs more water than a garden so when designing your landscape,
reduce the area covered by lawns as much as possible.

Application for the FUTURE

Spread mulch around your plants (75mm thick) to reduce
evaporation and prevent weeds. Mulch is a cheap and easy
way to prevent up to 73% evaporation loss. The best mulch is
a well-rotted compost which will also improve the soil
structure.

Weeds compete for water and nutrients in the garden. Once

they are removed good mulch will help to keep weeds away.

 Frequent watering makes your plants shallow rooted and more dependent on
you for survival. Less watering will toughen the grass and your plants and
encourage its roots to spread deeper.

 Look at the dials on the water meter when you are sure there is no water being
used in the home or garden. If any of the dials are moving, you may well have
a leak.

Sources:- http://www.wateryear2003.org

S.V.I.M. Kadi 31
Section - C

S.V.I.M. Kadi 32
Global Position of bottled water
Bottled Water Consumption Jumps

Bottled water represents the fastest growing segment of the global beverage market
with a market share of about 38%. World bottled water market is expected to reach
$65.9bn by 2012, stimulated by rising population, consumer spending patterns,
lifestyle trends and growing levels of health consciousness, among others.

The market is expected to grow rapidly in the coming years due to growing consumer
concerns about fitness, water quality and health. As stated by the recent report
published by Global Industry Analysts, global bottled water market is dominated by
Europe and the US, which together account for about 55% of the market value
estimated in the year 2008.

Bottled water will continue to fare well in the global beverage marketplace as a
healthy alternative to carbonated soft drinks. Gains in bottled water market will also
come from flavored varieties and convenient packaged formats, especially single-
serve packs.

Sparkling water market is dominated by Europe, which accounts for more than 75%
of the world market estimated in 2008. Western Europe comprises some of the world's
largest per capita bottled water consumer markets, which include Germany, France,
Spain and Italy. The largest proportion of bottled water consumers can be found in
Germany, as 88.2% of its adult population drinks bottled water. 4

The non-sparkling water market constitutes the bulk of bottled water shipments,
accounting for between 80-85% of the market in volume and value terms. Non-
sparkling bottled water is also expected to offer the highest growth opportunity,
outgrowing the sparkling bottled water market by three to four times. Market for non-
sparkling water in the US is projected to reach $15.1bn by 2012.

4
www.ibwa.org

S.V.I.M. Kadi 33
The major challenge for most companies is product innovation and differentiation as
water is still just water. Containers are an important part of bottled water, as they
constitute nearly 47% of cost. Even look, weight and price of the product are as
significant as the water itself.

For instance, Colorado-based Biota sells bottled water in biodegradable bottles that
are produced using corn in order to attract consumers who are ecologically conscious.
Some companies try to attract children by selling bottled water in attractive bottles
with vivid designs and colours.

Key players dominating the global Bottled Water market include Aqua Gold
International Inc, Boreal Water Collection Inc, China Water & Drinks Inc, Group
Danone, Danone Naya Waters Inc, Isbre Holding Corp, Nestle SA, PepsiCo, Quilmes
Industrials Sa-Adr, Saint Elie, San Miguel Corporation and The Coca-Cola Company.

GLOBAL BOTTLED WATER MARKET

Leading Countries' Consumption and Compound Annual Growth Rates
2002 – 2007

2007 Millions of Gallons CAGR*

Rank Countries 2002 2007 2002/07
1 United States 5,795.6 8,823.0 8.8%
2 Mexico 3,898.6 5,885.2 8.6%
3 China 2,138.4 4,787.8 17.5%
4 Brazil 2,541.8 3,621.1 7.3%
5 Italy 2,558.2 3,100.9 3.9%
6 Germany 2,291.5 2,743.2 3.7%
7 Indonesia 1,622.5 2,400.6 8.2%
8 France 2,225.6 2,283.2 0.5%
9 Thailand 1,277.0 1,533.1 3.7%
10 Spain 1,191.4 1,284.0 1.5%
Top 10 Subtotal 25,540.7 36,462.2 7.4%
All Others 9,054.2 13,407.3 8.2%
WORLD TOTAL 34,594.9 49,869.6 7.6%
* Compound annual growth rate
Source: Beverage Marketing Corporation

GLOBAL BOTTLED WATER MARKET

Per Capita Consumption by Leading Countries
2002 – 2007

2007 Gallons Per Capita

S.V.I.M. Kadi 34
 Rank Countries 2002 2007
1 United Arab Emirates 35.2 68.6
2 Mexico 37.7 54.1
3 Italy 44.2 53.3
4 Belgium-Luxembourg 32.7 39.5
5 France 37.1 35.8
6 Germany 27.8 33.3
7 Spain 29.7 31.7
8 Lebanon 24.9 29.3
9 United States 20.1 29.3
10 Hungary 13.5 28.5
11 Switzerland 24.2 28.2
12 Slovenia 18.8 25.2
13 Austria 20.9 25.0
14 Czech Republic 21.1 24.6
15 Croatia 14.9 24.3
16 Saudi Arabia 23.8 24.1
17 Cyprus 21.4 24.0
18 Thailand 20.1 23.6
19 Israel 12.4 23.2
20 Portugal 19.9 22.4
GLOBAL AVERAGE 5.6 7.6

Source: Beverage Marketing Corporation

Europe and North America both contributed more than 60% of global market sales of
bottled water it shows more awareness of bottled water in market and Asia is after this
two area Asia cover 26% from global sales.

Bottled water—a general term referring to natural mineral water, spring water, and
purified water supplied to consumers in bottles—is the world’s fastest-growing

S.V.I.M. Kadi 35
commercial beverage. Global consumption of bottled water more than doubled
between 1997 and 2005, reaching a total of 164.5 billion liters, or 25.5 liters per
person. While Europe and North America still dominate the bottled water market,
consumption in Asia and South America has increased dramatically over the past five
years, expanding at 14 percent and 8 percent a year respectively.

The United States is the world’s largest consumer of bottled water, with Americans
drinking 28.7 billion liters in 2005. But consumption per person is a different story: in
2005 each Italian, on average, drank more bottled water than anyone else in the world
—192 liters, compared with 99 liters for Americans. Among the top 10 countries,
Brazil, China, and India have doubled or even tripled consumption between 2000 and
2005, though per capita intake in China and India is still far below the global average.
Altogether, almost three quarters of the world’s bottled water is consumed in the top
10 countries.

Worldwide, people buy bottled water in order to have safe drinking water, especially
consumers in developing countries who face unreliable municipal water supplies,
water scarcity, and continual water contamination. In most industrial countries,
however, where municipal water is better regulated, people drink bottled water also
for better taste, for convenience, and as a substitute for other beverages. In the United
States, calorie-free bottled water has attracted consumers concerned about obesity.

Urbanization, improved living standards, office working environments, and

aggressive marketing strategies have helped boost the global sales of bottled water.
Home and office delivery of bottled water has become a popular service and supplies
nearly 28 percent of the water consumed.

The difference in cost between bottled and tap water is staggering: the bottled version
costs from 240 times to more than 10,000 times as much. The Pacific Institute, a
California-based think tank, found that bottled water sold in most industrial countries
costs $500–1,000 per cubic meter, compared with 50¢ per cubic meter of California’s
high-quality tap water. Most of what consumers pay goes into production, packaging,
transportation, advertising, retailing, marketing, and profits—not the water itself. In
2005, selling bottled water in the United States generated more than $10 billion in
revenue.

S.V.I.M. Kadi 36
Bottled water is regulated as a food product in the United States and Canada, while
the European Union has two directives: one on natural mineral water and another on
drinking water that includes bottled spring or purified water. Regulation codes for
bottled water generally cover the composition, contaminants, processing
requirements, and labeling. The Codex Alimentarius—an international food code
initiated by the World Health Organization and the Food and Agriculture Organization
— can be adopted by countries that lack national regulations.

S.V.I.M. Kadi 37
 United State
Bottled water emerged as the second largest commercial beverage category by volume
in the United States in 2003, and, despite its significant stature, it continued to grow at
a significant pace in 2007. The category is growing even more forcefully on a global
scale but in the U.S., volume is unparalleled.

In 2007, total U.S. category volume surpassed 8.8 billion gallons, a 6.9% advance
over 2006’s volume level. That translates to over 29 gallons per person, which means
U.S. residents drink more bottled water annually than any other beverage, other than
carbonated soft drinks (CSDs).5

U.S. BOTTLED WATER MARKET

Volume and Producer Revenues
2000 - 2008(P)

Millions of Annual Millions of Annual

Year Gallons % Change Dollars % Change
2000 4,725.1 -- $6,113.0 --
2001 5,185.3 9.7% $6,880.6 12.6%
2002 5,795.7 11.8% $7,901.4 14.8%
2003 6,269.8 8.2% $8,526.4 7.9%
2004 6,806.7 8.6% $9,169.5 7.5%
2005 7,538.9 10.8% $10,007.4 9.1%
2006 8,253.5 9.5% $10,857.8 8.5%
2007 8,823.0 6.9% $11,705.9 7.8%
2008(P) 9,418.0 6.7% $12,573.5 7.4%

(P) Preliminary
Source: Beverage Marketing Corporation

While CSDs still have volume and average intake levels more than twice as high as
bottled water, the soft drink market has been struggling recently, because of
competition bottled water. Per capita consumption of bottled water has been growing
by at least one gallon annually, thereby more than doubling in a decade.

U.S. BOTTLED WATER MARKET

Per Capita Consumption
1997 – 2007

5
Beverage Marketing Corporation

S.V.I.M. Kadi 38
 Gallons Annual
Year Per Capita % Change
1997 13.5 --
1998 14.7 8.3%
1999 16.2 10.2%
2000 16.7 3.5%
2001 18.2 8.6%
2002 20.1 10.6%
2003 21.6 7.2%
2004 23.2 7.5%
2005 25.4 9.7%
2006 27.6 8.4%
2007 29.3 6.4%

Source: Beverage Marketing Corporation

The industry enjoyed a nine percent growth rate from 1996 to 2000 in the United
States, which made the U.S. the world's largest market and a product that was
growing faster than any other beverage in that time period. Now bottled water is
reaching the mature stage of the product life cycle and a few large firms dominate the
industry.
Drinking bottled water, then, is not a benign practice; plainly, it wastes money and
causes environmental damage. It seems possible to suggest that succumbing is
allowing oneself to be manipulated in the most basic way. Bottled water, after all, is a
huge business. One-billion bottles of water are consumed in the United States a week,
and it is estimated that 38 million bottles are thrown into landfills annually.

The consumption of bottled water is expanding exponentially both in the United

States and worldwide. This consumer preference is placing new stresses on
groundwater supplies and on associated stream systems. The United States leads the
world in total bottled water consumption, although it still lags behind Europe in per
capita consumption. In 2002, Americans consumed more than 6 billion gallons of
bottled water, or about 21 gallons per person. Since 1992, the annual percentage
increases have ranged from 8.2 to 18.4 percent. In the larger context of groundwater
consumption, the percentage allocated to bottled water is small, but the impacts are
often highly concentrated and substantial. The United States pumps about 77 billion
gallons of fresh groundwater per day.6

6
American beverages Association

S.V.I.M. Kadi 39
The above graph shows that all beverages growing on an average 6 to 7 % but bottled
water segment growing at the rate of 87% it shows market potentiality of bottled
water.

ASIA

S.V.I.M. Kadi 40
; 9.6% of total industry volume)/2007 (17.5%)
• Indonesia is the 7th market in the world (9.1billion liters; 5.5% of total industry

S.V.I.M. Kadi 41
 • Thailand is the 9th market in the world (5.7 Thailand is the 9th market in the
world (5.7 billion liters; 3.1% of total industry volume billion liters; 3.1% of
total industry volume
• India is the 10th market in the world (3.4 billion India is the 10th market in the
world (3.4 billion liters; 1.8% of total industry volume liters; 1.8% of total
industry volume
• Korea is the 13th market in the world (2.8 billion Korea is the 13th market in
the world (2.8 billion liters; 1.5% of total industry volume) liters; 1.5% of total
industry volume)
• Japan is the 16th market in the world (2.5 billion Japan is the 16th market in the
world (2.5 billion liters; 1.3% of total industry volume) 7

7
Beverages Marketing Corporation

S.V.I.M. Kadi 42
 China
Market Highlights

• China is the world's third-largest consumer of bottled water, with sales

expected to surpass 15 billion litres by 2008, exceeding a value of $4.9 billion.

Customers

• The large disparity in incomes between urban and rural Chinese means that
most Western-style consumerism is concentrated in China's cities. The rural
population cannot typically afford consumer products such as bottled water.
• Brand, price and taste are the factors that most influence urban Chinese
consumers' choice of bottled water.

MARKET OVERVIEW

• China's water resources, which stand at 2200 cubic metres per person,
represent only about one quarter of comparable countries' resources.
Furthermore, the distribution of China's water resources is uneven, with south
China having an abundance of water, while the north and west regions
experience regular droughts. Furthermore, China's use of water is highly
inefficient; China consumes 7-15 times more water to produce one unit of
gross domestic product (GDP) than developed economies. For example, in the
United States, one tonne of water results in about $38 worth of GDP, while in
China one tonne of water translates to only $3-4 of GDP.
• China's robust and unchecked economic growth is one of the main reasons the
country faces severe water pollution and, consequently, shortages of safe
drinking water. About 700 million Chinese drink water contaminated with
human and animal waste, and/or chemicals such as fluorine, arsenic, sodium
sulfate and bitter salt. The Chinese government reports that water from 53% of

S.V.I.M. Kadi 43
 mainstream rivers, 50% of lakes and 35% of ground water is not fit for human
consumption due to pollution.
• According to Euro monitor, sales of bottled water by volume are expected to
surpass 15 billion litres by 2008. The value of all bottled water sales is
expected to rise from $3.7 billion in 2003 to more than $4.9 billion by 2008.
• China's bottled water import market grew to $13.6 million in 2005, up from
$4.4 million 2003, and consisted mostly of unsweetened mineral water (52%),
and sweetened waters - including aerated and minerals waters (46%).
• Between 1999 and 2004, the compound annual growth rate (CAGR) for
bottled water consumption in China was 20.9%, the second-highest rate in the
world (India has a 25% rate). Euro monitor forecasts that the market for
bottled water will continue to experience strong CAGR of 13.5% through
2008.
• Despite strong growth in volume sales of bottled water, there is substantial
downward pressure on price due to intense competition. The average cost of a
domestic brand bottle of water in China is about $0.25, while Euro monitor
reports that profit margins on a 24-pack case ranges from only $0.03 to $0.08.
Comparatively, a bottle of Evian costs approximately $2 in China, and is
aimed at an affluent market. Packaging and marketing may well be the key to
differentiating brands, which would allow bottled water producers to increase
prices.
• Bottled water accounts for 39% of the soft drinks produced in the Chinese
market. Other major categories are carbonated soft drinks (30%), ready-to-
drink tea (15%) and fruit juice and fruit drinks (10%).
• There is significant room for growth in bottled water consumption in China.
On a per-capita basis, the Chinese population consumed only 7 L of bottled
water in 2003. Comparatively, each Italian consumed 203 L of bottled water
while those in the United States consumed 82 L; the typical Canadian
consumed 46 L of bottled water in 2003. Sales of bottled water are expected to
increase by 90% between 2003 and 2008, due to the combined impact of lower
prices and concerns over polluted water.
• The consumption of bottled water in China differs significantly based on
geographic region and the urban-rural divide. Table identifies the size and

S.V.I.M. Kadi 44
 CAGR of the bottled water market in each of China's six regions. The
northwest, southwest and mid-China regions are expected to have the
strongest growth in bottled water consumption through 2008; the urban
centres of Xi'an, Lanzhou, Chengdu and Chongqing will drive most of this
growth.

Region CAGR (2003-08)

East China 12.0%
North and Northeast China 12.0%
Mid-China 16.0%
South China 12.0%
Southwest China 16.0%
Northwest China 16.0%

OPPORTUNITIES

• Increasingly, urban families are shifting towards the purchase of bottled water
over having to boil tap water for consumption. According to Euro monitor this
has resulted in an increased demand for a variety of pack sizes such as 18.9
litre, 11.35 litre, six litre, 1.5 litre and 0.75 litre. Potential opportunity may
exist as domestic manufacturers scramble to meet the demand for larger sizes.
• Canadian companies are more likely to find success targeting the urban
Chinese population. Urban Chinese have a greater level of affluence and,
consequently, can better afford bottled water than rural Chinese. They also
have a higher level of exposure to Western consumer products.

S.V.I.M. Kadi 45
KEY PLAYERS

• Regional suppliers dominate distribution in the highly fragmented Chinese

bottled water market. Important regional bottled water manufacturers include
Zhejians Yangshengtang Foods Co. (makers of Peasant's spring), Shenzhen
C'est Bon Food & Beverage Co. (C'estbon) and Guangzhou Watson's Food &
Beverage Co. (Watson's).
• Only three brands are available nationally, of which Wahaha (owned in part by
French conglomerate Groupe Danone) is the largest with 19% market share.
The two other national brands are the domestically owned Peasant's Springs,
with a 10% market share, and Robust, which is also partly controlled by
Group Danone and hold an 8% share.

• While China ranks as Canada's tenth-largest export market for bottled water,
there is ample opportunity to increase exports. Canadian exports of bottled
water to China are growing rapidly, but are still small in value terms, growing
from $35 121 in 2003 to $118 968 in 2005. Canada's top bottled water exports
in 2005 were natural and other unsweetened waters ($50 586), followed by
unsweetened mineral and aerated waters ($48 756), and sweetened waters
-including mineral and aerated waters ($19 626).8

8
www.bottledwater.org

S.V.I.M. Kadi 46
 South Africa
The South African National Bottled Water Association (Sanbwa) believes that
changing lifestyle trends rather than South Africa ’s economic boom of the past two
years are driving the more than 20% year on year growth of the local bottled water
industry.

Research by independent specialist food and beverage research house, BMI, shows
that the South African bottled water market grew by an estimated 33.0% during 2005
and an additional 27.6% in 2006 - following on a consistent annual growth trend in
excess of 20% since 2001.

Levels of disposable income in South Africa are rising now, the growth trend in the
bottled water industry started eight years ago and the rate of growth has been
consistent. “Which means that people buying bottled water because they have more
money then before.” They’re buying it because they believe it contributes to their
wellbeing – and, if you want to drink water rather than any other beverage, it’s more
convenient to have a bottle of water with you than have to look for a tap.

“Also, although tap water is perfectly safe, bottled water can have a more appealing
taste. So it’s not healthy in a boring way – it’s fun. And these days, people want health
to be fun and not all hard work.”In other words, bottled water is about choice rather
than economics.”

The new regulations ensure that water is bottled to internationally accepted quality
and safety specifications. Sanbwa’s specifications for its member producers are even
more stringent. Members represent more than 80% of all the bottled water produced
in South Africa, so when consumers see the Sanbwa logo on bottles they have the
confidence of knowing they’re making a clear choice for quality.

S.V.I.M. Kadi 47
 Europe
Rising health concerns in Europe have created opportunities within the bottled
water market, which traditionally has lagged behind the soft drink sector in
terms of popularity.

As consumers become increasingly health conscious, they are switching from higher
calorie carbonated soft drinks to bottled water. In addition, the European bottled water
market benefits from the general reluctance in the population to drink tap water.

New analysis from Frost & Sullivan (financialservices.frost.com), European Bottled

Water Industry: Investment Analysis, finds that the market earned €24.52 billion in
2006 and is expected to grow at a compound annual growth rate of 2.5 percent in
Western Europe and 17.7 percent in Eastern Europe during 2007-2010.

An increasing awareness of obesity-related health risks is causing a shift away from

carbonated soft drinks toward healthier alternatives such as bottled or flavored water,
driving the European bottled water market. Being a life product, the bottled water
market is controlled by stringent laws and regulations and is considered very safe for
consumption.

Overall, the Eastern European market is likely to outpace the Western market in
growth due to its larger untapped potential. While flavored/enhanced water appears to
have the brightest prospects, still water continues to account for the biggest share of
market volume. The home and office delivery (HOD) segment also has great potential
for growth, as it is a largely unexplored market.

Bottled water companies will also have to combat the campaigns mounted by
municipal utility companies, which accuse bottled water companies of bottling the
same water that is freely available via the utilities for a price. The bottled water
companies need to initiate public awareness campaigns and publish statistics to
counter this point.

S.V.I.M. Kadi 48
There are also concerns regarding pollution created by the disposal of non-
biodegradable packaging material. Companies have to demonstrate corporate social
responsibility by using environmentally safe materials.

In Europe bottled water industry grows rapidly in spain this industry grow at the rate
of 7 annually and all other organization also growing rapidly. So here opportunity for
grabs new market.

S.V.I.M. Kadi 49
 LATIN AMERICA
Bottled Water Consumption

From 2000-2005 the compounded annual growth rate for bottled water was 9.6%
higher than any other beverage category.

However over the last five years Latin American Bottled Water sales increased
approximately 14% per year. South America bottled water sales have achieved
consistent growth in recent years, despite economic difficulties which affected many
countries at the start of the decade. This is attributed this to not just the perception of
bottled water as a basic foodstuff but also a growing awareness of health and wellness
issues. The region is led by Mexico, which boasted sales of more than 14bn liters in
2005, giving it a 45% share from consumption of over 130 liters per person. Brazil
follows with a 25% share from a volume of 7.6bn liters. Per the below graph the

S.V.I.M. Kadi 50
United States and Mexico, were the largest national markets in 2004. Five year
growth rates through 2005 for the world’s leading consumers include 16.5% for
China, 23.4% for India, 12.4% for Brazil, 8.6% for Mexico Note: Fiber Water has
Intellectual Property coverage in every country below except Indonesia.

AUSTRALIA
Australia has experienced a 20% growth in bottled water sales from last year with
over 1000 brands of water available in the country.

While clean safe drinking water is vital for human health, Australians are becoming
increasingly thirsty for bottled water products. And with the current big push from
beverage companies of this ‘new’ product, the market is expected to keep growing to
a worth of over $460 million per year.

Bottled water is an unjustified luxury that, except for essential safety or medical
reasons, is simply a fashion statement roaming free of environmental responsibility.
The life cycle of a plastic bottle goes through various stages - producing the package,
water sourcing, transport of a heavy product, merchandising, sale and eventually
disposal. There are many serious implications at each of these stages.

The Australian Drinking Water Guidelines which provide the framework for those
who manage and deliver Australia’s water resources are far more stringent than the
Australia New Zealand Food Standards Code that regulates bottled water. A recent
analysis of bottled water published in The Australian, found that the best selling
bottled water was no cleaner than the cheapest brand and none of the bottled water
tested was any better than tap water from Melbourne, Sydney and Adelaide (which is
regarded as having the murkiest tap water). In fact, an estimated 25% of bottled water
is found to actually be just tap water in a bottle.9

About the Association

9
http://www.bottledwater.org.au/scripts/cgiip.exe/WService=ASP0003/ccms.r?PageId=5001

S.V.I.M. Kadi 51
Who is ABWA
One of the largest and fastest growing International Association is Asia and The
Middle East. The ABWA has gone through many changes in its short life as the
dynamics of the group have changed. Founded in September 1992, it was initially
named the "Far East Chapter" which was later changed to the "Asia Pacific Chapter"
and then to the Asia Chapter. With the formation of the new International Council of
Bottled Water Associations taking over the role and position of the International
Bottled Water Association which is now confined to the United States of America
territory only, the Asia Chapter has now become independent and is officially called
the Asia Middle East Bottled Water Association (ABWA) since May 2000. ABWA has
its own logo, its own training body and a common standard for regulations and
inspections through the application of the Model Code. The Model Code is mandatory
through mandatory annual inspections for all bottler association members of ICBWA
and its International Chapter members. Each member's factory must also have a
Certified Plant Operator (CPO). ABWA is a founder member of ICBWA.10

Permanent Secretariat

A Permanent Secretariat was formed and operational since October 1993 based in
Jakarta. The activities of the Secretariat is, among others, to keep and maintain good
communications with members, act as a source of information and provide technical
assistance when required either direct or through appointed Technical Consultants,
and to keep an on-line link with Headquarters, update data of all members, recruit
new members, distribute materials on technical matters/Plant Operator Manuals/Plant
Inspection Handbook, negotiate cost and liaise with officially appointed inspection
bodies for the Mandatory Inspection Program, and the Certified Plant Operator
examination time-table, schedule inspection visits to members' individual plants,
organize workshops/training programs/conventions, certification programs, and other
events beneficial for members. The Secretariat also publishes the Asia Middle East
Bottled Water magazine twice a year, monthly (or more) e-newsletters, monthly
technical bulletins and other regulatory or market information.

10
www.ibwa.org

S.V.I.M. Kadi 52
Annual Mandatory Inspections

Pre-Inspections and Annual Mandatory Inspections are done through third parties
contracted by ABWA. For Asia (except for Indonesia) and the Middle East, this
function is assigned to Johnson Diversey Company (JDC). Specifically for Indonesia,
ABWA has appointed P.T. Suhita Jaya to perform this role with an emphasize on
training, inspecting and certifying refill-stations. As a result of the prolonged
monetary crisis in Indonesia since 1998 and the incapability of the government to
install proper municipal water supply infrastructure, refill-station business
mushroomed and has reached a number of more than 7000 units, compared to about
300 branded bottled water manufacturing facilities, throughout the 17,000 island of
Indonesia. Both organizations have been approved as authorized inspectors by the
International Council of Bottled Water Associations (ICBWA).

ABWA’s objectives

• To assist its members to prepare legislative and regulatory steps and actions
whenever they are non-existing in their countries, review existing regulations
which may need improvement and changes to meet international standards and
regulations such as Codex Alimentarius.
• To assist its members to prepare for sale the highest and finest quality of
packaged bottled water which will be in the best interest of the industry and
the welfare of the general public.
• To promote through education, government relations and public relations, the
use of bottled water as healthy drinking water and as an alternate source for
sugared drinks or other beverages.
• To establish a continuing educational program and technical assistance to
industry members, their officers and employees in quality control and the
production of the highest possible quality of bottled water.
• To facilitate the exchange of technical, scientific and government relations
information amongst industry members.
• To correctly implement the Model Code through mandatory annual
inspections/audits and Certified Plant Operator programs.

S.V.I.M. Kadi 53
 • To monitor the correct application of the logo of the Association as the quality
certification logo on products of members within the territory.

• To socialize the standards of the Association and to advise the public of

qualifying bottler members having passed the standards of the Association
through its mandatory annual inspections. 11

INTERNATIONAL BOTTLED
WATER ASSOCIATION

The IBWA Model Bottled Water Regulation, known as the “Model Code,” was first
published in 1982. At that time, the U.S. Food and Drug Administration’s regulations
for bottled water were limited in scope. IBWA developed a set of standards that could
be used as minimum standards to which association members would subscribe and to
encourage state agencies to adopt it as a model for their own bottled water
regulations. IBWA has continued to advance the Model Code in the 1980s, 1990s, and
up to the present day.

In November 13, 1995, FDA published a standard of identity and quality for bottled
water at 21 C.F.R. §165.110. The Model Code was revised to adopt the provisions that
FDA had promulgated, but it was still considered a document that could be used to
raise the standards for bottled water and distinguish IBWA bottlers from others in the
industry. This was done partly by adopting industry and regulatory requirements that
were sometimes more stringent than FDA, primarily in the area of good
manufacturing practices (GMPs). In 2000, IBWA adopted the Hazard Analysis of
Critical Control Points (HACCP) system into the Model Code.12 This was a
significant advance for the industry since HACCP was not mandated for bottled water

11
www.bottledwaterindia,org
12
www.ibwa.org

S.V.I.M. Kadi 54
at either the federal or state levels of government. The association felt it was
important to adopt HACCP.

The IBWA Model Code has adopted many of the state requirements for bottled water.
However, there are some instances where an individual state requirement may not be
included in the Model Code, such as source and finished product monitoring
requirements for certain substances, and bulk water hauling regulations. If a bottler
sells in a particular state, they must ensure they comply with the state bottled water
regulations. IBWA bottler members are encouraged to use the contact list of state
regulatory agencies.

"Bottled Water" means water that is intended for human consumption and that is
sealed in bottles or other containers with no added ingredients except that it may
optionally contain safe and suitable antimicrobial agents. Fluoride may be optionally
added within the limitations established in 21 CFR Section 165.110(b)(4)(ii). The
common or usual name of the resultant product must reflect these additions. Bottled
water may be used as an ingredient in beverages (e.g., diluted juices, flavored bottled
waters). It does not include those food ingredients that are declared in ingredient
labeling as “water”, “carbonated water,” “disinfected water," "filtered water," "seltzer
water," "soda water," "sparkling water," and "tonic water." The processing and
bottling of bottled water shall comply with applicable regulations in 21 CFR Part 129.

"Mineral Water" means water containing not less than 250 parts per million (ppm)
total dissolved solids (TDS), coming from a source tapped at one or more boreholes
or springs, originating from a geologically and physically protected underground
water source. Mineral water shall be distinguished from other types of water by its
constant level and relative proportions of minerals and trace elements at the point of
emergence from the source, due account being taken of the cycles of natural
fluctuations. No minerals may be added to this water.

S.V.I.M. Kadi 55
Rules

 All bottled water products shall meet the chemical, physical, and
microbiological standard of quality prescribed by this Code of Practice
attached as Appendix A. All bottled water products shall be free of coliform
bacteria, including E. coli.
 Bulk water tankers, storage tanks, hoses, pumps and connections used for
loading, transporting and unloading of bulk water shall be constructed of
materials that are FDA food-grade, smooth, non-absorbent and easily cleaned
such as stainless steel (300 series).
 Tankers, hoses, pumps, and other appurtenances shall be cleaned, sanitized
and inspected on a routine basis.
 For microbiological contaminants (e.g., total coliform) analyze daily a
representative sample from a batch or segment of a continuous production for
each type of bottled water produced by the plant. Such analyses shall be
performed daily by qualified plant personnel and at least weekly by an
approved laboratory.
 If the TDS content of mineral water is below 500 ppm, or if it is greater than
1,500 ppm, the statement "low mineral content" or the statement "high mineral
content," respectively, shall appear on the principal display panel following
the statement of identity in type size at least one-half the size of the statement
of identity but in no case of less than one-sixteenth of an inch. If the TDS of
mineral water is between 500 and 1,500 ppm, no additional statement need
appear.13

13
www.bottledwater.com

S.V.I.M. Kadi 56
Global environmental affect

“Even in areas where tap water is safe to drink, demand for bottled water is increasing
—producing unnecessary garbage and consuming vast quantities of energy,” reports
Earth Policy Institute researcher Emily Arnold. Although in much of the world,
including Europe and the U.S., more regulations govern the quality of tap water than
bottled water, bottled water can cost up to 10,000 times more. At up to $10 per gallon,
bottled water costs more than gasoline in the United States.

“There is no question that clean, affordable drinking water is essential to the health of
our global community,” Arnold asserts, “But bottled water is not the answer in the
developed world, nor does it solve problems for the 1.1 billion people who lack a
secure water supply. Improving and expanding existing water treatment and sanitation
systems are more likely to provide safe and sustainable sources of water over the long
term.” Members of the United Nations have agreed to halve the proportion of people
who lack reliable and lasting access to safe drinking water by the year 2015. To meet
this goal, they would have to double the $15 billion spent every year on water supply
and sanitation. While this amount may seem large, it pales in comparison to the
estimated $100 billion spent each year on bottled water.

Once it has been emptied, the bottle must be dumped. According to the Container
Recycling Institute, 86 percent of plastic water bottles used in the United States
become garbage or litter. Incinerating used bottles produces toxic byproducts such as
chlorine gas and ash containing heavy metals tied to a host of human and animal
health problems. Buried water bottles can take up to 1,000 years to biodegrade.
Worldwide, some 2.7 million tons of plastic are used to bottle water each year. Of the
bottles deposited for recycling in 2004, the U.S. exported roughly 40 percent to
destinations as far away as China, requiring yet more fossil fuel.

Meanwhile, communities where the water originates risk their sources running dry.
More than fifty Indian villages have complained of water shortages after bottlers
began extracting water for sale under the Coca-Cola Corporation’s Dasani label.
Similar problems have been reported in Texas and in the Great Lakes region of North

S.V.I.M. Kadi 57
America, where farmers, fishers, and others who depend on water for their livelihoods
are suffering from concentrated water extraction as water tables drop quickly.

The environmental impacts of bottled water also need to be considered. Excessive

withdrawal of natural mineral water or spring water to produce bottled water has
threatened local streams and groundwater aquifers. And producing, bottling,
packaging, storing, and shipping bottled water uses significant amounts of energy. In
addition, millions of tons of oil-derived plastics— mostly polyethylene terephthalate
(PET) are used to make the water bottles.

PET bottles have comparatively lower environmental impacts than glass or aluminum
by requiring less energy to recycle or remanufacture, and they do not release chlorine
into the atmosphere when incinerated, which PVC does. But without proper recycling,
massive amounts of PET bottles in the waste stream pose serious challenges to land
uses as well as to water and air quality around landfills.

S.V.I.M. Kadi 58
Section – D

S.V.I.M. Kadi 59
 Comprehensive study of Indian bottle
water market

India to Face Severe Water Crisis in The Future

The per capita water availability in India is projected to decline to about 1,140 cubic
meters per year in 2050 from 1820 cubic meters per year recorded in 2001 according
to the the Intergovernmental Panel on Climate Change (IPCC).

"India will face a severe water crisis in 20 years if the government doesn't change its
ways and clashes are already taking place because the resource is so scarce." This was
the warning by the World Bank way back in 2005. "Estimates reveal that by 2020,
India's demand for water will exceed all sources of supply." 14.

All these reports point to just one thing for us now. That we should be on serving
water and be judicious in its use. If water is wasted today then its our future
generation which will suffer because of it. So everyone needs to make a point from
now to save water in anyway they can.

If we cannot do that then the future is very clear. Water will be one of the most
expensive commodities and everyone will have to buy water shelling out huge amount
of money for the same. The implications could be worse then these if action is not
taken now.

Water infrastructure projects should also speeden up in the country through public-
private partnership. This is of immense importance in a country where rural
population has very little access to safe drinking water. What these infrastructure
projects will also ensure is employment generation and in the current global crisis the
country need to stand up and generate local employment through these opportunities
and challenges.
14
World Bank report

S.V.I.M. Kadi 60
With vast population base, growing middle class population and strong
macroeconomic environment, the Indian food & drinks market has emerged as the
rapidly growing segment in the Indian retail industry. Rapid transformation in the
lifestyle of Indians, particularly those living in Urban India, has resulted in a dramatic
increase in the demand for processed or health food, packaged and ready-to-eat food
products and water specially packaged in bottle.

India is developing nation and whose growth last five year increase highly. The
growing demand for bottled water speaks volumes of the scarcity of clean drinking
water and the quality of tap water. It has become an icon of healthy lifestyle emerging
in India. It is of the pet material used in bottled water that makes a big difference in
taste. Almost all has traces of plastic flavor. The interesting scenario is that we have,
on the one hand, a vast majority of population which is struggling hard to get access
to potable water and on other, the new generation concentrated in urban areas getting
accustomed to bottled water ‘culture’ even though it means they have to pay through
their nose for it. Selling ‘safety’ –i.e. pure and simple water- has now become one of
the fastest growing industries in India despite the harsh truth it is build on the
foundation of bad governance, inequality and blatant exploitation. However bottled
water provides the distance advantages of convenient packing, consistent quality and
is ubiquitous.

The fastest growth in the consumption of bottled water in the world has been recorded
in India according to a new study conducted by the US based earth policy institute. It
even question the rising thirst for bottled water with consumption tripling in India and
more than doubling in china over the past five years.15

The sales of bottled water have exploded globally particularly in Europe, North
America and India in recent years, largely as a result of positive public perception on
the safety of mineral water. The corporate control and distribution over this important
liquid asset is growing as brisk rate in India. The packaged water business in the
country is estimated to be a whopping RS 1600 Cr and is growing at an immense rate
of 40% annually. According to Bureau of Indian standards (BIS), there are 1200
15
www.bottledwaterindia.web

S.V.I.M. Kadi 61
bottling plants (out of which 600 are in the state of Tamil Nadu) and 200 Brands of
packed drinking water across the country (nearly 80% of which are local) batting over
the markets which amply signifies the market is big even by international standards.
At this significant growth rate, the market is expected to humble the fizzy drinks
market soon. Nevertheless, in India the per capita bottled water consumption is still
quite low-less than five liters a years as compared to the global average of 24 liters.

Indian Scenario:

IN 1967, Bisleri set up a bottling plant for manufacturing and marketing its mineral
water but that time the concept of mineral water was failed. The brand was later on
sold off to Parle group acquired the Bisleri of Italy for launching soda water but later
launched bottled water also. The launch at that time was a big flop as concept of
buying water that too the Indian public did not accept form. The market remained
dormant for quite long (for a period of 20 years or so). The market through out this
period was formed only by the premium products that too available through 5-star
hotels.

In early 1990s with onset of liberalization policy by the Indian government, coming in
of cola majors, sell off of local soft drink brands of Campa, Thums Up, Gold Spot etc.
by parle to coke and other factors led Bisleri to test waters again. Bisleri re-launched
its bottled water in 1994. With exposure of media and exposure to international life
styles, deteriorating levels of portable water, increases in a number of water borne
classes, increases in awareness about health and hygiene and other related factors led
to acceptability of concept of mineral water. The market has not looked back ever
since then and has grown leaps and bounds to such an extent that a number of genuine
as well as fly-by-night operations have entered it to milch it.

Bottled water slaking consumers thirst.

The Indian bottle water industry has grown phenomenally over the past decade. A
major part of the demand stems from out of home consumption by people on the

S.V.I.M. Kadi 62
move, because the quality of drinking water available otherwise is suspect. Of course,
some also consume bottled water (or high price mineral water in some instance) as a
style statement. While it has its positive aspect, the bottle water industry is often
questioned for its over-extraction of the ground water, Its very high cost of delivery
and massive generation of solid waste in the from of non-biodegradable plastic
bottles. is this industry really slaking in consumer’s thirst or is it being too expensive
and wasteful?

The Big Boom

The bottle water industry has un-doubted been one of the fastest growing business
sectors in India. The way it has grown since the early 1990s is indeed astounding.

And the high growth rate is expected to continue into future. Starting from a small
base, the growth was exponential up to early years of current century. There after,
there was a decline in the pace of growth, and we now witness a comparatively linear
growth, but nonetheless fairly rapid.

The bottle water industry is reported to have growth nine-fold over the past decade
from around 15 million cases in 1997-98 to an estimated 130 million cases in2007-08
(1case=48 liters)this traction to a compounded annual growth rate 24% per annum. In
same year, the growth rate has been as high as 40%. The market size is further
projected to increase to 265 million cases by the year 2014-15 this works out of a
projected growth rate of nearly 11% a year. While one has crossed the exponential
growth phase experienced during the industry’s nascent period, there is lot of
untapped potential and the industry would continue to experience double digit growth
rates for several years to come.16

In terms of value, the Indian bottled water segment is estimated currently at Rs.3000cr
per annum and expected to double within the next seven years. The international
players currently see India as the destination with a lot of growth possibility. India is
already the tenth largest bottled water consumer in the world.

16
Advertising Express. May, 2008. pg 55-58.

S.V.I.M. Kadi 63
A major part of the demand for bottled water stems from out of home consumption by
people on the move, because the quality and safety of drinking water available
otherwise is suspected the fear of contracting water-borne infection prompts many to
go in for bottled water during journey and when one is away from home. Of course,
some also consume bottled water (or high price mineral water in some instance) as a
style statement.

In part the industry pews its existence to the poor quality of portable Water supplied
by the municipal authorities/water supply boards and further to the inadequate
hygienic standard prevalent in most public eating place, where the water served of
often contaminated. The demand has been further fueled due to increasing income and
changing lifestyle of the urban middle and upper classes of the population. It is also
triggered by advertising and wide –spread distribution of the product.

Bottled water companies earn extraordinary profits

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, says the website of the North American
"Think Out side the Bottle" campaign. Not only is the Coca-Cola but there
thousands of brands in India's $445 million packaged water industry. "Whatever
figures you come across in the bottled water business would be underestimated,"
says Chandra Bhushan, associate director of the New Delhi-based Center for Science
and Environment that campaigns to protect ground water resources. He said
companies earn extraordinary profits by selling water at 10 rupees (24 US cents) or
more per liter after a production cost of 25paise, or 0.25 rupee per liter. The water is
drawn mostly from public sources.

Not just bottlers are involved. In south India, thousands of fuel trucks converted to be
water carriers sell ground water to households and establishments at about $10 for
5,000 liters. 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.

S.V.I.M. Kadi 64
Proliferation of brand
Bisleri India’s first bottled water brand, was lunched by parle beverages way back in
1967. in continues to be among and top three brands sold in India even today, and is
often used as generic name for referring to bottled water.

We have come a long way since 1967.the demanded for bottled water was extremely
low during the initial years, or rather during the 1990s that the industry really begun
to take off and hundreds of manufacture big and small entered the fray. PepsiCo
lunched Aquafina in 1999; when the industry’s growth curve was at its steepest. Other
multinational such as coca-cola (with its kinley brand) and Nescafe (with pure life)
are also competing for slice of this lucrative and fast-growing market.

The leading packaged drinking water brands in India today include Aquafina, Bisleri,
Ganga, Hello Himalaya, Kinley, Oxirich, Royal Challenge Yes, besides many regional
brands. Parle’s bisleri, coca-cola’s kinley and PepsiCo’s Aquafina are top three brands
and together command the major marker share among the player in the organize
sector the given exhibit present a college showing some prominent brands in India
market.

The bottled water business in India can be categorized into three groups based on
price: premium natural mineral water, natural mineral water and packaged drinking
water. The industry is quite fragmented, with over 1800 bottling plants all over India.
There are more than 200 brands, nearly 80% of which are regional. The small scale
player sell non-branded product in the mofussil market. The regional players operate
plants replete with well/bore wells, osmosis techniques and UV radiation units.

Today bottled water sold in prestigious location such as luxury hotels, reports,
restaurants and air ports. It also available at railway station, in train, at bus station,
and in innumerable small outlets.

Bottled water is sold in small container – the most popular being the 1 liter bottle. It is
also sold in bottles of 2 liter, 1.5 liter and half a liter. It is sold in bulk to institutional

S.V.I.M. Kadi 65
and to caterers in 12, 20, 25 liter package. The institutional segment account for
annual market size of 700-1000cr.

Bisleri has recently launched the “natural mountain water” brand and the company is
quite optimistic about its market penetration. It is also reported the several Indian and
global giants such as consumer goods business of wipro ltd, coca-cola, nestle, and
France’s denote have been in the race for acquiring bisleri. Coca-cola, which acquired
Thumps Up, Limca, Gold Sport, Citra, Rim-Zim and Maaza from Parle, is also in the
fray for Bisleri given its anxiety to build a strong portfolio of non carbonated drinks.

With the entry of big players and possible corporate takeover, the water industry is
slated to post a healthy growth rate. Wipro brought unza holdings ltd. The Singapore-
based is costumer goods market. Coca-cola fully acquired us vitamin water maker
glaceau and its full range of water brands. While tata tea recently bought stake in
Mount Everest mineral water’s Himalaya brand and sold its 30% equity stake in glace
to coca-cola.

According to industry estimates, natural mineral water sell at a premium to bottled

water and command a 9% share of the processed water maker in India. Mount Everest
holds a 75% share of this market. The premium imported players in natural mineral
water are “Evian” from France, San Pellegrino and Perrier.

Driving of growth
The industry’s extraordinary growth is due to the improper municipal water supplies,
debilitating water borne disease such as malaria, and evolved health consciousness of
the people as well as the tremendous tourist traffic. Chennai is one of the main
markets and account for a significant part of India’s packaged water consumption.
According to the industry estimates, 700 thousand liters of water are sold in this city
everyday. Interestingly, the demand for water is the some right round the year. Apart
from domestic and commercial use of packaged water, the Indian railway offers a
huge market. Bottled water brand are here to stay and are going to be on a first growth
track with the entry of the large liquor companies. The UB group has established
around 29 plants all over the country for rolling out the kingfisher brand of packaged

S.V.I.M. Kadi 66
water. Also, SAB miller has launched royal challenge and Hayward’s 5000 brands of
packaged water through more than 40 plants all over India.

Moreover, as result of rising aspirations among consumer on aspects such as quality,

style and taste, and with changing lifestyle, many have graduate to bottled water. Ina
major sift, all these factor including the ease of carrying, and water being served cold,
have become issues for drawing customers’ attention and building brands. Consuming
premium bottled water is now a prestige symbol and is related to the extent of
property in different region. The western region account for 40% of the market and
the eastern region just 10%.the cost of entry and exit is low in industry; one does not
require much equipment to make bottled water.

There are stringent standard for drinking water in many countries, and there are
various gradation as well. India lags far behind in this respect. Since many small-scale
suppliers have entered the business, there serious concern about the safety of the
bottled water is available in the market. It is mandatory that every bottling water plant
obtain a certification of meeting BIS standard before commencing commercial
production. The government withdrew the licenses of eight bottled water units in
2003 since their products were found to contain pesticide-residual, significantly in
excess of the permissible limits. According to the European economic commission
report the maximum residue limit for total pesticides is 0.0005 mg per liter, and
0.0001 mg per liter for single pesticide. India has to yet come out with a compressive
policy on pesticide residue and vector control in drinking water.

Since the most of the bottling plants in the country depend on ground water, one is
often faced with protests from the communities that are dependent on the groundwater
in the vicinity of the bottling plant. Another development is that in some in stance,
farmers have entered the water market, thereby posing a serious thereat to the ground
water levels in agriculturally productive area. When some farmer begins selling their
ground water, it results in excessive extraction, lading to decline in water tables,
thereby affecting agriculture in the surrounding as well. In some part Karnataka, the
farmer have switched from cultivating traditional crops to less-water requiring crops,
for cashing in by selling in surplus ground water.

S.V.I.M. Kadi 67
Inherent Challenges
Around 600 of the 1800 water bottling plants in India are concentrated in Tamil Nadu
alone. Since the state is water starved, this is constraint for the industry. It would be
commendable if the bottling companies can find alternative sources to meet this water
requirement- such as rain water harvesting; or develop a means of recharging the
ground water extracted by them. The water industry draws enormous quantities of
ground water, but a mere 30 paisa per 1000 liter of water, as cess to the government.
Water thus works out to be a super-low cost input by any industry standard. As such,
the water resource ministry has recently recommended that the bottled water and
beverages industry which uses water as basic raw material should pay a far higher
cess than other industries. Further, the cess should bring the cost of ground water
extraction on par with the cost of recycling waste water. Experts opine that the water
bottling business is definitely justified in paying a much higher cess, considering the
enormous damage that the causes to ground water resources.

The confederation of Indian industry (CII) suggested that any industry should be
allowed to extract ground water only if it is sets up an aquifer recharge plant. This
should be monitor by periodic scientific water audits. It should be necessary for large
ground water utilizing industries to undertake treatment and recycling of that waste
water. This would encourage better water cleaning technologies and usage of treated
waste water efficiently as an alternative sources. Public-private-partnership for
recycling ground water, instead of injecting the waste water underground is called for.

The bottled water industry uses PET (polyethylene terephalate) bottles, which are
discarded after single use and thereby add to the solid waste. Plastics being non-bio-
degradable increase consumption of bottled water leads to increased challenge of
waste disposal.

The global water market size is currently estimated at around $350bn per annum. Yet
expert says the industry is “young” and that there is tremendous potential for further
growth. The market potential has attracted many new entrants and has led to fierce

S.V.I.M. Kadi 68
competition. In response the market stalwarts are coming up with new variant such as
flavored vitaminized and herbal water.

India’s bottled water market is very small even when compared to that is country such
as Indonesia, Malaysia and Singapore, where the industry is already worth rs.15000-
20000 cr. At barely 5 liter a year, the per capita consumption of mineral water in India
is even lower- a mere 0.5 with the compared to 111 liter in Europe and 45 liter in the
USA. However, the total annual bottled a water consumption has risen repeatly in
recent time. Distribution is the crucial element for the growth of the industry both for
consumer and institutional sales.

Water is both social as well as economic good providing access to say drinking water
to its citizens is the responsibility of the state. The High-tech water purifier and
bottled water can not reached the majority of Indian population. When the vast
majority does not have ready and adequate access to even raw water for household
needs, it also stands out as an ethical and moral question as to how far we can
encourage the bottled water industry. As some element of it stand out as money
frustration of conspicuous consumption, at the cost of low cost water for the masses
and for the agriculturists.

Affordable and safe portable water for the masses in the need of the hour. By
achieving better cost efficiencies in production, packaging and distribution even
bottled water can be priced far lower than it is today. For example, bottled water sold
to institutional buyer reusable 25 liters canisters, is priced at just at Rs. 1 per liter as
against Rs. 10 for a liter of the same water sold in a PET bottle. In Chennai, a
company called TEAM sells water in plastic pouches at very low price even with
existing system, the cost composition suggest that there is significant scope of
reduction of price if the inventory holding cost can be reduced, i.e. the trader margins
can be reduced drastically, if the inventory can turn over much faster. A reverse
distribution system for collecting and recycling the used bottles can reduce the
problem of solid waste industry achieves a healthy growth without depleting the
ground water resources and causing environmental damage?

S.V.I.M. Kadi 69
Major Players in Indian bottle water

• Parle's Bisleri
• Coca Cola with its brand Kinley
• PepsiCo with its brand AquaFina
• Manikchand with its brand Oxyrich
• K.K.Beverages with its brand Kingfisher

India had the world's third largest GDP - $4.02 trillion (PPP) in 2006-07 - which is
touched to reach $27 trillion by 2050, becoming the third largest economy after China
and the USA. Given the scenario, boom times are ahead for packaged water (or
treated water).17

Bottled water or the packaged water category, estimated to be over Rs 1,600 crore
(which according to the Bureau of Indian Standards are more than 1,800 in number),
is "witnessing an unprecedented amount of action."

In other words, domestic companies Parle, United Breweries, Tatas, DS Foods and
multinationals PepsiCo and Coca-Cola, the world's largest aerated drinks maker, are
all "battling for leadership" in the rapidly growing packaged water market in India. As
things stand, food and beverages (not to speak of tobacco) account for the largest
consumption categories (40%) in India, which has emerged as one of the fastest
growing economies in the world with about 8% annual GDP growth.

Bisleri (the current market leader) was the first-of-its-kind packaged water brand in
the country when it was launched in 1967. It has now made a foray into packaged
natural spring water, a category which has been witnessing exponential growth, in
double digit figures, over the past couple of years. Dr Krishna also noted that India
was the first market outside the US to have PepsiCo's Aquafina launched in 1999
when the market was just beginning to grow.

17
Indian economy review 2007-08

S.V.I.M. Kadi 70
This summer, Coca-Cola's $4.1 bn global acquisition of the US-based vitamin water
brand Glaceau (formally known as Energy Brands Inc) to expand its non-carbonated
beverage line made headlines, even as the Tata group which agreed to sell its 30%
stake to Coke by the year end, had cash registers ringing with its acquisition of
mineral water brand, Himalayan. In June this year, Tata Tea acquired the Mount
Everest Mineral Water Company that manufactures the Himalayan brand of spring
water ( a 44% stake for Rs 210 crore), making it the largest acquisition of a packaged
water firm in the domestic market.

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, the total annual
bottled water consumption has risen rapidly in recent times - tripling between 1999
and 2004 - from about 1.5 billion litres to five billion litres.

The rise of the Indian bottled water industry commenced with the economic
liberalization process in 1991. “The market was virtually stagnant until 1991, when
the demand for bottled water was less than two million cases a year. Since 1991-1992,
it has not looked back, and the demand in 2004-05 was a staggering 82 million cases."

Bottled water is sold in a variety of packages: pouches and glasses, 330 ml bottles,
500 ml bottles, one and 5-litre bottles and even 20-50-litre bulk water packs. The
bottled water business is divided broadly into three segments in terms of cost:
premium natural mineral water, natural mineral water and packaged drinking water.
Premium natural mineral water includes such imported brands as Evian, San
Pellegrino and Perrier, which are priced between Rs 80 and Rs110 a litre. Natural
mineral water brands like Himalayan and the indigenous Catch brand owned by DS
Foods Ltd are priced around Rs 20 a litre. Packaged drinking water is the biggest
segment and includes brands such as Parle Bisleri, Coca-Cola's Kinley and PepsiCo's
Aquafina which are priced in the range of Rs10-12 a liter.

Player Market share

Parle- Bisleri 40%

S.V.I.M. Kadi 71
 Coca cola- Kinley 24%
PepsiCo- Aquafina 11%
Other 25%

As per market estimates, Parle's Bisleri has held on to its 40% market share even as
Kinley and Aquafina "are fast catching up". Aquafina has approximately 10%. The
rest, including the smaller players, have 20-25% of the market share.

Coca-Cola India which has captured 20 -25 % share of the packaged mineral water
category with its brand Kinley, is all set to enter the flavored and sparkling water
segment that was, till recently, the domain of Catch.

With the opening up of the non-carbonated beverages market, Dr Krishna predicts that
the flavored water market is going to witness the largest influx of capital. Gearing up
for the market, Bisleri plans to introduce its range of flavored waters shortly. PepsiCo
is also considering the possibility of introducing flavored water in the Indian market
given the consumer's increasing discomfort with carbonated drinks.

As regards the retail industry, Double-digit growth was expected of the current retail
sector, which was in the region of $300 billion. Organized Indian retail sales were set
to grow at 38% CAGR (Compound Annual Growth Rate) and reach $35 billion
alongside $130 billion investment in infrastructure by the year 2010. Supermarkets
have increased their share of the food and grocery trade in the last five years. The
annual growth of department stores is 24% which is faster than overall retail. There
has also been an explosion of shopping malls - as many as 150 new shopping malls
will be set up by 2008.

Indian middle class was "characterized by disposable incomes set to increase at an

average of 8.5% per annum till 2015. The consumption splurge and additional
purchasing power were due to the increase in working women and wealth creating
industries, e.g. software/ telecom/ BP

In another important development, the big retailers have begun to target the hidden
consumption power in the rural areas.

S.V.I.M. Kadi 72
With an "enabling credit environment, increasing comfort in borrowing (increase in
credit cards, personal loans) and easy availability of finance (low EMIs) private
consumption was growing at 10% and spending on discretionary items (non basic)
increasing at an average of 9%; food, beverages and tobacco constituted the largest
consumption categories (40%).

To take advantage of this new brand consciousness, more and more elite and premium
brands have been entering or getting set to enter the Indian market

The all-India market for packaged water is about 145 million growing at rate of 40%
per annum although now only 5% of total beverage market, branded bottled, water is
the fastest growing beverage industry Over 500 brands prevalent in the water segment

The out break of water-bome disease, erratic municipal supplier and health
consciousness have all contributed to the growth of industry. Total market size of the
bottled water is Rs.2000crore, of this around Rs.1700crore is in the hand of
organization sector and the rest is with unorganized sector.

After fighting a pitched battle for market share in the carbonated drinks sector,
PepsiCo India and Coca Cola India are now shifting their attention to packaged water
business in India.

For starters, PepsiCo India is revamping its packaging and communication strategy to
promote its brand Aquafina, while Coca-Cola is beefing up its operations to pump up
volumes.

Meanwhile, Amul is reconsidering its foray into the packaged water business in
Gujarat On the company’s strategy, Homi Battiwala, vice-president (emerging
categories) PepsiCo India said, “We are introducing ‘Aquafina’ (500 ml) in a brand
new pack with translucent labels. To announce the news, we are launching a mass
media campaign titled ‘Go’.”

S.V.I.M. Kadi 73
“Created by JWT India, PepsiCo’s new ad campaign highlights the ‘convenience
factor’ in its communications. PepsiCo’s arch rival Coca-Cola is also harping on the
convenience factor of Kinley to woo new consumers.

“According to a spokesperson from Coca-Cola India, “Kinley finds a special appeal

amongst consumers who have an on the ‘Go lifestyle’, looking for hygienic and
trustworthy drinking water while being on the move.”

A few months ago, Coca-Cola India has introduced its premium mineral-enriched
product ‘Schweppes Water’ in 45 select locations across Mumbai. On the other hand,
PepsiCo India is planning to launch its own enhanced water products under the brand
name ‘Aquafina’.

According to industry sources, PepsiCo is planning to introduce its global enhanced

water brands in India-to reach out to a wider target audience. Currently, Pepsi's global
brands in the enhanced water category include, Sobe, Aquafina Alive and Propel. 18
When contacted Battiwala said, “We are investigating the opportunities for enhanced
water brands in India.”

However, he was reluctant to reveal further details on the company’s new launches.
As for Coke’s foray into the enhanced water sector in India, the company
spokesperson said, “In keeping with consumer preferences and needs, Coca-Cola in
India is continuously evaluating all its offerings within its product portfolio. However
currently there are no plans to launch Glaceau in India.” Competition seems to be
really hotting up in the cool packaged water business in India.

India

India is one of the biggest and most attractive water markets in the world. The boom
time for Indian bottled water industry is to continue- more so because the economics
18
Review of PepsiCo

S.V.I.M. Kadi 74
are sound, the bottom line is fat and the Indian government hardly cares for what
happens to the nation's water resources.

Most multi-national (MNC) companies view India as the next big market with a lot of
potential and growth possibility. Several MNCs are waiting in the wings to expand a $
287 billion global water market into India. There is a huge market being exploited by
the packaged water industry, and it's growing at 40% per annum.

With over a thousand bottled water producers, the Indian bottled water industry is big
by even international standards. There are more than 200 brands, nearly 80 per cent of
which are local. Most of the small-scale producers sell non-branded products and
serve small markets. In fact, making bottled water is today a cottage industry in the
country. There are investments worthy mid-cap companies in this segment.

Despite the large number of small producers, this industry is dominated by the big
players - Parle Bisleri, Coca-Cola, PepsiCo, Parle Agro, Mohan Meakins, SKN
Breweries and so on. Parle was the first major Indian company to enter the bottled
water market in the country when it introduced Bisleri in India 25 years ago.

The ground water realities

Industry sources estimate that the total Indian water market is worth more than $1
billion - consisting of approximately one-third for water provisioning, one-third for
municipal water treatment and one-third for industrial water treatment. The overall
water market is growing at 15-20 percent per annum.

In just 50 years a water-rich nation has been reduced to a water-insecure one. By

2025, the per capita availability of water is likely to slip below the critical mark of
1,000 cubic meters. And with 82% of our villages overdrawing groundwater to meet

S.V.I.M. Kadi 75
their needs and cities ferrying water from peri-urban areas, the country is close to
exhausting its groundwater reserves.

India has 16 percent of the world's population, 2.5 percent of the land mass and 4
percent of the world's water resources. These limited water resources are depleting
rapidly while the demands on them are increasing. Drinking water supplies in many
parts of India are intermittent. Transmission and distribution networks for water are
generally old and badly maintained, and as a result, are deteriorating.

Corporate control over water and water distribution in India is growing rapidly: the
packaged water business is worth $250 million, and it's growing at a huge 40-50%
annually. Around 1,200 bottling plants and 100 brands of packaged water across the
country are battling over the market, overdrawing groundwater, and robbing local
communities of their water resources and livelihoods.

Genie is out of the bottle

India is the tenth largest bottled water consumer in the world. Today it is one of
India's fastest growing industrial sectors. The rise of the Indian bottled water industry
began with the economic liberalization process in 1991. The market was virtually
stagnant until 1991, when the demand for bottled water was less than two million
cases a year. However, since 1991-1992 it has not looked back, and the demand in
2004-05 was a staggering 82 million cases.

The per capita bottled water consumption in the country is still quite low - less than
five liters a year as compared to the global average of 24 liters. However, the total
annual bottled water consumption has risen rapidly in recent times - it has tripled
between 1999 and 2004 - from about 1.5 billion liters to five billion liters. 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.

Indeed, the bottled water industry is one of the most thriving sectors in India.
According to another section of market observers, the market is growing at a

S.V.I.M. Kadi 76
whopping rate of about 55 percent annually. Though exact figures are not available,
the market is growing for sure. Even though it accounts for only 5 percent of the total
beverage market in India, branded bottled water is the fastest growing industry in the
beverage sector.
Bottled water is still not perceived as a product for masses though; the scene is
changing slowly thanks to low pricing and aggressive marketing strategies adopted by
new entrants. Some surveys show that truck drivers on highways form a major chunk
of bottled water drinkers. Penetration in rural areas is another significant factor that is
likely to play a key role in the development of the bottled water trade.

Bottled water is sold in a variety of packages: pouches and glasses, 330 ml bottles,
500 ml bottles, one-liter bottles and even 20- to 50-litre bulk water packs. 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 and packaged drinking
water. Leave alone the metros, where a bottled-water manufacturer can be found even
in a one-room shop, in every medium and small city and even some prosperous rural
areas there are bottled water manufacturers.

Consumption of bottled water in India is linked to the level of prosperity in the

different regions. The western region accounts for 40 per cent of the market and the
eastern region just 10. 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. This is a major problem because southern India, especially Tamil Nadu, is
water starved.

The majority of the bottling plants - whether they produce bottled water or soft drinks
- are dependent on groundwater. They create huge water stress in the areas where they
operate because groundwater is also the main source - in most places the only source -
of drinking water in India. This has created huge conflict between the community and
the bottling plants.

The branded bottles

S.V.I.M. Kadi 77
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. While the single largest share in the mineral water market might still
belong to an Indian brand -- Parle's $52 million Bisleri brand has a 40 percent share --
multi-national corporations are not far behind. Nestle and Danone are vying to
purchase Bisleri, and Pepsi's Aquafina and Coke's Kinley brands have been extremely
successful in edging out many of the small and medium players to buy-outs and
exclusive licensing deals.

Kinley and Aquafina are fast catching up, with Kinley holding 20-25 per cent of the
market and Aquafina approximately 11 per cent. The rest, including the smaller
players, have 20-25 per cent of the market share. News reports indicate that other
MNCs like Unilever are also eying the market.

Currently, Kinley is being manufactured in 15 bottling plants across the country and
according to Coca-Cola India President Alex von Behr, Coke had invested nearly $1
billion in India between entering the market in 1993 and December 2001. Behr says
that Coke expects a significant portion of our turnover to be accounted by pure water
business.
Almost all major national and international brands have taken a plunge. Parle's Bisleri
that virtually monopolized the bottled water market is now vying with Nestle, Coca
Cola, PepsiCo, Manikchand, UB and Britannia. According to a national-level study,
there are close to 200 bottled water brands in India. Nearly 80 per cent of these are
local brands.

Premium natural mineral water includes brands such as Evian, San Pelligrino and
Perrier, which are imported and priced between $2 - 2.5 a litre. Natural mineral water,
with brands such as Himalayan and Catch, is priced around 40 cents a liter.

The Indian bottled water market, which has more than 250 brands, is expected to
undergo a major consolidation phase, and the need for standards and regulations is of
great importance, according to Ita Thaher, Secretary General of the Asian Bottle
Water Association (ABWA). She said that the Indian bottled water market is valued at
more than $250 million and is growing at a rate of 60 per cent.

S.V.I.M. Kadi 78
The major growth in packaged water, however, was in the bulk water segment.
According to estimates, bulk water packs of 20 liters, targeted at the institutional and
home segments, grew at a rate of 30-40% in 2002 alone. Bisleri re-invented its 20-
litre jumbo home pack, fitted with a spout, to acquire a more 'consumer-friendly'
image.

According to industry estimates, the main consumers of packaged water are no longer
restricted to the upper class but include middle class and lower-middle class families
as well. The 'rural' market is currently dominated by tourists and travelers; packaged
water is now beginning to be seen as an essential appendage to any form of travel.

Cost Of one liter bottled water

S.V.I.M. Kadi 79
 Cap Cost
Rs.0.25

Bottled Cost
Rs.1.50 to 2.50

Label Cost
Rs.0.15 to 0.25

Other Cost: - Treatment Cost- Rs.0.10 to 0.25, Carton Cost- Rs.0.50,

Transportation cost- Rs.0.10 to 0.25, Others [tape and cases] - Rs.0.25,
Total Cost [Excluding Labour, marketing and tax] - Rs.2.85 to 4.25,
Selling Cost - Rs.10.0 to 12.0

(Source: - http://www.hinduonnet.com/fline/fl2307/stories/20060421006702300.htm)

Bottle water packages: -

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 even 20- to 50-litre bulk
water packs. 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
and packaged drinking water.

S.V.I.M. Kadi 80
The government apathy: In April 2002, the government of India announced a new
water policy based on privatization. The social activists allege that this policy was
shaped entirely by the World Bank recipes for the water sector.

In comparison to global standards India's bottled water segment is largely

unregulated. Safe water is rated with a different yardstick in different countries. In
India, the aspect has been overlooked for long. Indian consumers tend to believe that
any bottled water is safe water. This may not be the case.

Several small players have entered the trade in India to capitalize on the craze, with
no check on them. Some serious doubts have been raised about the safety of so-called
bottled water available. There has hardly been an involvement of any statutory body
in defining specific standards. The Bureau of Indian Standards (BIS) has just recently
got involved in the process.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has

proposed expediting setting up of Water Regulatory Authority, urging the Planning
Commission to build a strong case for its creation to the government. The Chamber's
proposal which will be submitted to the Deputy Chairman, Planning Commission, Dr.
Montek Singh Ahluwalia by its President, Anil K. Agarwal, stresses that water is
crucial and hardly any good job is being done in this area. As only a third of country
are under irrigation with assured canal water or ground water supplies. Maintenance
of irrigation system is poor which is partly because water tariff are very low and do
not cover the costs of tariff and maintenance, said the Chamber proposal.

Turbulent future
India faces a turbulent water future. Unless water management practices are changed -
and changed soon - India will face a severe water crisis within the next two decades
and will have neither the cash to build new infrastructure nor the water needed by its
growing economy and rising population.

S.V.I.M. Kadi 81
World Bank draft report, `India's Water Economy: Bracing for a Turbulent Future,'
says by 2020, India's demand for water will exceed all sources of supply unless the
country's management practices are changed, and soon.

Climate change projections show that India's water problems are only likely to
worsen. With more rain expected to fall in fewer days and the rapid melting of
glaciers - especially in the western Himalayas - India will need to gear up to tackle the
increasing incidence of both droughts and floods.

India can still store only relatively small quantities of its fickle rainfall. Whereas arid
rich countries (such as the United States and Australia) have built over 5,000 cubic
meters of water storage per capita, and China can store about 1,000 cubic meters per
capita, India's dams can store only 200 cubic meters per person. Moreover, India can
store only about 30 days of rainfall, compared to 900 days in major river basins in
arid areas of developed countries.

A water thirsty country

According to a document recently published by the Delhi office of the international
NGO, Water Aid, even if this target is reached within a decade, as the UN seeks to do,
"29% of the rural population, or 244 million people, and 23% of the urban population,
or 90 million people, would still lack access to adequate safe, sustainable water".

Another estimate shows almost the same figure. The projected increase in population
by the year 2025 indicates that the per capita availability of water is likely to slip
below the critical mark of 1,000 cubic meters. Though projections vary India's
population by 2050 will in all probability balance between the low variant of 1,345
million people and the high variant of 1,581 million people.

The fact that most of this population growth will be accounted for by urban areas will
add to the existing water crisis in the cities. By 2050, 48% to 61% of India's
population will be living in urban areas.

S.V.I.M. Kadi 82
Even if the middle variant of 55% is taken into consideration, 800 million out of the
projected total population of 1,450 million will be in urban areas, adding an
unprecedented 500 million people to the present urban population of 309 million.
While rural water demand is assessed on an allocation of 40 liters per capita per day
(lpcd), the corresponding urban demand is against a norm of 135 lpcd. A population
shift means additional demand on already shrinking urban water resources.

Massive investments needed

Estimates reveal that by 2020, India's demand for water will exceed all sources of
supply. Notwithstanding the catastrophic consequences of indiscriminate pumping of
groundwater, government actions - including the provision of free power - have
exacerbated rather than addressed the problem.

In just 50 years a water-rich nation has been reduced to a water-insecure one. By

2025, the per capita availability of water is likely to slip below the critical mark of
1,000 cubic meters.

There is clearly an urgent need for action. First, India needs a lot more water
infrastructure. Compared to other semi-arid countries, India can store relatively small
quantities of its fickle rainfall. Whereas India's dams can store only 200cu.m.of water
per person, other middle-income countries like China, South Africa, and Mexico can
store about 1000cu.m Per-capita. New infrastructure needs to be built especially in
underserved areas such as the water-rich northeast of the country where investments
can transform water from a curse to a blessing. The country needs to invest in water
infrastructure at all levels - from large multipurpose water projects to small
community watershed management and rainwater harvesting projects.

The government is increasingly dependent on aid for water infrastructure projects

from institutions like the World Bank. As liberalization and free markets are the
guiding principles of these agencies, they are pushing full cost recovery and reduced
public control. This is shifting the flashpoint for water conflicts from agrarian basins

S.V.I.M. Kadi 83
and rural areas to the cities, where the battle is on for the control and management of
municipal water supplies.

MNC manufacturers of water and wastewater treatment equipment either have a

presence in India or have ensured that their products are easily available in India now.
Canadian companies are eyeing the Indian water market keenly. Canada's companies
have expertise in disinfection, non-chemical treatment, membrane technology and
clean environment technologies. They are also strong in lake water management and
municipal water supply systems. The Netherlands has technical leadership in
activated carbon treatment technology, membrane technology and wastewater
treatment.

According to industry sources, PepsiCo is planning to introduce its global enhanced

water brands in India-to reach out to a wider target audience. Currently, Pepsi's global
brands in the enhanced water category include, Sobe, Aquafina Alive and Propel.

The packaged drinking water market in India is huge and growing. On account of the
dominant presence of unorganized regional players in the market, estimates for the
actual size of this segment vary. However, it is believed that the domestic bottled
water industry is around Rs.1500 to Rs.1800 crore in size and growing at the rate of
around 40% per annum. This is way ahead of the growth rate of 7.6% reported for
global market as a whole in 2006. The domestic demand has increased from 2 million
cases in 1990 to an estimated 68 million cases by 2006. In fact, India is estimated to
be the 10th largest bottled water consumer in the world. Market experts disclose that
there are more than 1,800 water brands in India, of which most are local and regional
brands that are often classified under the unorganized sector. The key brands in the
organized sector include Bisleri (Parle), Kinley (Coca-Cola), Oxyrich (Manikchand),
Aquafina (Pepsi Foods), etc.

S.V.I.M. Kadi 84
1) PEPSICO
Pepsi has AquaFina brand of mineral water in the market. The company entered into
bottled water business in September '99 the company has targeted its product towards
youth segment and has so far focuses only on one size of the PET bottle, that too
750ml. Though the company is present only in selected market as of now, it has plans
of increasing share in the market by expanding its PET bottles portfolio as well as
distribution reach.

2) COCA-COLA
The company has entered in the business in May'00 through its brand, Kinley. The
Kinley brand is already being used for its soda water. The company has tied up with
Kothari Beverages, of Yes brand of mineral water, for manufacturing coke's brand at
Yes facilities.

3) BISLERI
The brand is a product of Parle International and presently is the market leader with
more than 38% market share. The company pioneered the concept of bottled water in
the Indian market as early as 1967. The company is also credited with SKUs of
500ml, 1.2lts, 1.5its and 2 Liters in the Indian market..

Other players in the market with strong regional presence are: Brilliant, Yes, Hello,
Purette, Fountain, Himalayan, Golden Eagle, Prime, Pure Natural Aqua, Ganga,
Florida, Metro etc.

4) HIMALAYAN
Mount Everest Mineral Water Limited is a public limited company incorporated in
1991 with its plant at Dhaula Kuan in Sirmour District of Himachal Pradesh. The
company's plant is utilized to bottle natural mineral water under the brand name
HIMALAYAN together with inhouse facility to manufacture food grade PET Bottles
and tamper proof caps. Himalayan natural mineral water is available in six pack sizes
namely, 2 ltr, 1.5 ltr, 1 ltr, 750 ml, 500 ml, and 200 ml.

S.V.I.M. Kadi 85
The water is sourced from a large pristine and protected acquifer, which flows well
below the earth’s surface. The water is collected in the catchment area and travels
through rocks, clay and soil, thereby collecting the minerals available therein. The
process of traveling from the catchment area, reaching the acquifer and then being
bottled takes a period of over 20 years. The acquifer has a recharge capacity of 1
billion litres every year.

The Tata group, through Tata Tea, have acquired 31.73% holding in the Company
partly by purchase of shares from the investors, who had bought the shares from Dr.
Balsara in 2001, and partly by preferential allotment.Tata Tea, being the single largest
shareholder of the company, and with the management being firmly with the Tata
group, the company is now A TATA Enterprise.

Different company Ranking

Ranking of the samples (Bottles)
Sr. Name of pH Chlorides sum of Final
Rank TDS<500mg/L Rank Rank
No. sample (6.5-7.50) <200 mg/L Ranks Ranks
1 Bisleri 7.2 3 34.66 3 22.23 5 11 I
2 Kinley 7.6 6 28.9 2 18.56 3 11 I
3 Yes 7.8 7 55.4 5 14.65 1 13 III
4 McDowells 7 1 68.78 7 56.62 10 18 VI
5 Bailley 6.9 2 76.54 8 42.39 6 16 V
6 Gallons 7.4 5 146.78 9 56.21 9 23 V
7 Oxyrich 7.2 3 24.49 1 45.89 7 11 I
8 Oxyfina 7.3 4 47.87 6 16.48 2 12 II
9 Aquafine 7.6 6 35.67 4 21.53 4 14 IV
10 Cheers 8 8 268.56 10 54.22 8 28 VII

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. Natural
mineral water, with brands such as Himalayan and Catch, is priced around Rs.20 a
litre. 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.10-12 a litre.

S.V.I.M. Kadi 86
Brand wise information

Aquafina
Aquafina

700 Anderson Hill Rd

Purchase, NY 10577
Tel: 914 253 2000
Website: www.aquafina.com
President/CEO: Steve Reinemund
(chairman)

Type Water Beverage

Manufacturer PepsiCo, Inc.
Country of origin United States
Introduced 1994

Water Analysis

*(Mg/l=milligrams per liter)

*(PP/l=pints per liter)

Aquafina is a brand of bottled water. It was first distributed in Wichita, Kansas in

1994, and was distributed across the United States, Canada, Turkey, Saudi Arabia,
Vietnam, Pakistan and India. As of 2003, it had become the United States' top-selling
bottled water brand in measured retail channels. Aquafina is sold in 12-fluid ounce,
500-milliliter (16.9 fl oz), 20-ounce, 24-ounce, 1-liter, and 1.5-liter bottles. Aquafina
uses PepsiCo's own seven-step purification system, which it calls HydRO-7, which
includes charcoal filtration, reverse osmosis, and ozonation. PepsiCo states in
marketing material that this system removes substances that may be in other brands of
bottled water. As of July 27, 2007, PepsiCo put a disclaimer stating the water comes
from a "public source" on each bottle. Aquafina uses the term "Purified Drinking
Water" on its label. In Canada the current 1.5 L bottle of water displays

S.V.I.M. Kadi 87
"Demineralized Treated Water". Michelle Naughton, a Pepsi-Cola North America
spokeswoman said, "If this helps clarify the fact that the water originates from public
sources, then it's a reasonable thing to do." 19

Innovations: Aquafina is available in 20-ounce, 24-ounce, 1-liter and 1.5 liter

PET bottles. Aquafina also produced a non-caloric carbonated product, Aquafina
Sparkling, in two flavors, Citrus Twist and Berry Burst. Aquafina Flavor Splash is a
sweetened beverage using various flavors and Splenda(r).

Distribution: Available throughout the United States and selected countries

overseas.

Alliances: Carolina Panthers, Arizona Diamondbacks, PGA (Professional Golfer's

Association), and official bottled water of Atlantic Coast Conference.

PepsiCo produces several other products under the Aquafina label:

• Aquafina Sparkling, carbonated flavored water, available in Berry Blast

(Raspberry), and Citrus Twist
• Aquafina FlavorSplash, flavored water (without carbonation), and artificially
sweetened with Sucralose, available in Grape, Citrus Blend, Wild Berry, and
Raspberry.
• Aquafina Alive, a low calorie, vitamin-enhanced water beverage, available in
Berry Pomegranate, Peach Mango and Orange Lime.
• Aquafina plus+, a low calorie (120 calories per 591mL bottle), vitamin
supplement water beverage available in "Blackberry Grape", "Pomegranate
Cherry","Passionfruit Citrus" and "Orange Tangerine".

Hyderabad: Pepsi today entered a new business segment with the launch of Aquafina
Bulk Water. Venturing into the new business, Pepsi unveiled its premium-quality
international bottled water brand Aquafina in 25-litre packs in Hyderabad. Aquafina,

19
www.aquafina.com

S.V.I.M. Kadi 88
the largest-selling bottled water brand in the US, is being launched in large packs for
the discerning direct-to-home consumer for the first time anywhere in the world.

In line with Pepsi's total commitment to the highest quality standards, Aquafina 25-
litre meets stringent international and national standards for water purity benchmarked
against the new norms for packaged water effective January 2004, says a company
press release.

The Aquafina 25-litre pack uses the most advanced state-of-the-art purification system
in the country. The stringent purification process namely Chlorination, Sand
Filtration, Activated carbon purifier, 5 Micron Polisher, Ultraviolet, Reverse Osmosis,
1 Micron Polisher and Ozonation. Reverse Osmosis (RO), using the best of membrane
technologies, is at the heart of the Aquafina purification process.

Aquafina is also set to establish a unique 'Gold Standard' direct-to-home (DTH)

model in India. Pepsi brings world-class service to the consumer's doorstep with
AquaMan - a deliveryman trained to deliver and provide efficient and hygienic
service to consumers.

PepsiCo is one of the world's largest makers and sellers of waters, sports drinks, juice
and soft drinks. The acquisition of V Water in the UK will create significant
opportunities, and PepsiCo is committed to investing in the V Water brand and
building an exciting future for the company.

PepsiCo (NYSE: PEP) is one of the world's largest food and beverage companies,
with 2007 annual revenues of more than $39 billion. The company employs
approximately 185,000 people worldwide, and its products are sold in approximately
200 countries. Its principal businesses include: Frito-Lay snacks, Pepsi-Cola
beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. The PepsiCo
portfolio includes 18 brands that generate $1 billion or more each in annual retail
sales. PepsiCo's commitment to sustainable growth, defined as Performance with
Purpose, is focused on generating healthy financial returns while giving back to
communities the company serves. This includes meeting consumer needs for a
spectrum of convenient foods and beverages, reducing the company's impact on the
environment through water, energy and packaging initiatives, and supporting its

S.V.I.M. Kadi 89
employees through a diverse and inclusive culture that recruits and retains world-class
talent.

S.V.I.M. Kadi 90
BISLERI

Mineral Water under the name 'Bisleri' was first introduced

in Mumbai in glass bottles in two varieties - bubbly & still
in 1965 by Bisleri Ltd., a company of Italian origin. This
company was started by Signor Felice Bisleri who first
brought the idea of selling bottled water in India.

Parle bought over Bisleri (India) Ltd. In 1969 & started

bottling Mineral water in glass bottles under the brand
name 'Bisleri'. Later Parle switched over to PVC non-
returnable bottles & finally advanced to PET containers.

Bisleri Mountain Water:

Bisleri Natural Mountain emanates from a natural spring, located in Uttaranchal and
Himachal nestled in the vast Shivalik Mountain ranges. Lauded as today's 'fountain of
youth', Bisleri Natural Mountain Water resonates with the energy and vibrancy
capable of taking you back to nature. Bisleri Natural Water is bottled in its two plants
in Uttaranchal and Himachal Pradesh

This product is bottled drinking water at its best. Bisleri with added minerals has a
TDS count (total dissolved solids count) of approximately 100. It contains minerals
such as magnesium sulphate and potassium bicarbonate which are essential minerals
for healthy living. They not only maintain the pH balance of the body but also help in
keeping you fit and energetic at all times.

Bisleri with added minerals is also put through multiple stages of purification to
ensure the elimination of all forms of bacteria. This makes the water you drink
completely safe to consume. Bisleri with added minerals is available in 250ml cups,

S.V.I.M. Kadi 91
250ml bottles, 500ml bottles, 1 litre bottles, 1.5 litre bottles, 2 litre bottles and 5 and
20 litre cans.

As a soft drinks company, we had Thums Up, Gold Spot and Limca (cola, orange
drink and lemonade) but no soft drink company was complete without a soda. So we
merely used the name and launched Bisleri soda with two variants -- carbonated and
non-carbonated mineral water.

But three decades ago, what could we say about a category that had no market? We
didn't know our target group. Then, since bottled water is colourless, tasteless and
odourless, it was not an easy product to advertise.

Thus, the earlier brand building efforts focused on Bisleri being healthy with adequate
minerals. The Italian name added a dash of class to it. The first print ad campaign
captured the international essence and showed a butler with a bow tie, holding two
bottles of Bisleri.

The punchline was, "Bisleri is veri veri extraordinari" (the spelling of the punchline
was designed to capture the consumer's attention). The campaign was successful and
we were being noticed as someone who catered to the need for safe, healthy drinking
water.

However, the real boost to mineral water came in the early-to-mid-1980s when we
switched to PVC packaging and later to PET bottles. The PET packaging did not just
ensure better transparency -- we could now show sparkling clear water to the
consumers. It also meant better life for the water.

Meanwhile, Bisleri soda was doing well but we had to discontinue production as we
sold our soft drink brands to Coca-Cola in 1993. But my interest was in building
brands and not in bottling soft drinks. That's when I started to concentrate on
developing the Bisleri water brand.

Initially, though bottled water was something only foreigners and non-resident Indians
consumed, we still had to increase the distribution, which meant the dealer margins

S.V.I.M. Kadi 92
reduced. And because of limited sales, the dealer margin had to be kept high to
compensate low sales. Now we had to push sales.

But to reach out to the masses, we had to make the category more affordable. The
introduction of a comfortable-to-carry 500-ml bottle for just Rs 5 in 1995 not only
answered that need, but also meant doing away with carrying the excess water or
throwing it away if you were to buy a one-litre bottle.

The idea was a success and gave the company a growth of 400 per cent. We also
introduced the 1.2 litre bottle in 2000, which was aimed at those who share their
water. This also gave us the advantage of higher margins that a crate (12 bottles)
generated.

With other brands joining the fray, things were hotting up -- the bottled-water market
was estimated at Rs 300 crore (Rs 3 billion) and was growing at 50 per cent a year.
Bisleri had captured 40 per cent of the market.

We realised it was time to move to the next level -- the bulk segment. Several
commercial establishments had no access to piped water. We tapped into this segment
by introducing the 12-litre container, followed by the 20-litre can. The bulk segment
also helped bring down the price per litre from Rs 10-12 a litre to about Rs 3 a litre.

At present, the bulk segment constitutes 60 to 70 per cent of our sales and we intend
to increase it to 80 per cent in the next two years. With water scarcity in several cities,
even households are demanding bottled water now.

The home pack was made more user-friendly by introducing pouring spouts and jars
with dispensers. At the same time, we were constantly looking for new ways to tap the
market. We noticed that during wedding receptions, the older guests (above 50 years
of age) generally stayed away from ice cream, soft drinks and so on.

Hence, we introduced free sampling of Bisleri at the tables where the elderly guests
would sit. Soon customers were ordering bottled water on special occasions.
Currently, the consumption of bottled water is far in excess of soft drinks on such
occasions.

S.V.I.M. Kadi 93
The other major challenge was distribution. I still have the mindset of a soft drink
seller. Soft drink sales are in glass bottles and the distribution model is built around
picking up empty bottles and getting them back to the factory. That's not the case with
the retail bottled water packs (below 2 litre). But a product that's not available where
it's needed, is useless.

The number of outlets where Bisleri is available has increased from 50,000 in 1995 to
2,00,000 at present. But that is not enough -- we need to keep looking for different
avenues. Take stationery shops and chemists, for instance. They don't keep soft drinks
but sell Bisleri. That is the kind of exclusivity we look for to get ahead of the
distribution network that soft drink companies talk of.20

Filteration
Every drop of Bisleri water is purified as per international standards to ensure that
your Bisleri experience always remains pure and satisfying for longer. The following
is a brief understanding of the water treatment process.

CHLORINATION: Kills micro organisms. Remove organic matter.

ARKAL FILTER: Removes suspended matter and turbidity.
CARBON FILTER: Removes residual chlorine & odours
REVERSE OSMOSIS: Removes organic material. Controls total dissolved solids in
the water.
ADDITION OF MINERALS: For the purpose of maintaining a balanced mineral
content
MICRON FILTRATION: Additional safety measures to guarantee purity.
OZONATION: Ensures water remains bacteria free for longer life.

It is our commitment to offer every Indian pure & clean drinking water. Bisleri Water
is put through multiple stages of purification, ozonised & finally packed for
consumption. . Rigorous R&D & stringent quality controls has made us a market
leader in the bottled water segment. Strict hygiene conditions are maintained in all
plants.

20
www.bilseri.com

S.V.I.M. Kadi 94
To maintain strict quality controls in every unit, we not only purchase caps from
approved vendors, we also manufacture our own bottles, in-house. To be at par with
International standards, we have recently procured the latest state-of-the-art
machinery which has not only helped us improve packaging quality but has also
reduced raw material wastage and doubled production capacity.

NEWS
Bisleri has been the first to introduce mineral water to India. For over 30 years, Bisleri
remains the poineers in the bottled water industry with its ever-evolving innovations
and product offerings.

From investing crores into the natural water business to completely revamping the
packaging, Bisleri has always been in the news. Please use the links on the left to read
articles from various publications and view video snippets from news channels.

Bisleri is committed to meeting the needs of its customers across the country. To
effectively service the end consumer Bisleri has been working to continuously
establish fresh bottling and distribution capacities.

S.V.I.M. Kadi 95
 Himalayan Natural Spring Water

Langtang National Park

Dhunche 6, Rasuwa, Nepal
Tel: +91 22 26281238
Fax: + 91 22 26371005
Website:
www.himalayanspringwater.com
Email:
minakshirana300@hotmail.com
President/CEO: Mr. K. N. Rana

Water Analysis
*(Mg/l=milligrams per liter)
*(PP/l=pints per liter)

Bicarbonates: 25.8 PPM

Calcium Ion: 1.3 PPM
Fluoride: ND PPM
Magnesium: 0.42 PPM
Potassium: 0.7 PPM
Silica: 3.0 PPM
Sulfates: 0.2 PPM
Sodium: 0.83 PPM
Total Dissolved Solids: 14 PPM *(except TDS which are parts per million)

S.V.I.M. Kadi 96
Company History: Himalayan Natural Spring Water Company (P) Ltd. is a
private limited company established under the company act 2021 in the Company
Registrar's office in the year 2004. This company's production plant is at the foot hills
of the Majestic Langtang Himalayan Range, Langtang Valley at a height of 2,500
meters above sea level. The factory is also confined within the Langtang National
Park where the government of Nepal has controlled access. The best equipments and
technology available are used for the collection of water from the source at a height of
3,000 meters to the production plant. The 13,000 square meter production plant
consists of a state-of-the-art-machinery from renowned machinery manufacturers
including pet bottle manufacturer M/s ASB Nissei, Japan and bottling line from M/s
Ave Industries S.P.A. Italy.

The source and the surrounding:

The rain and the snow falls in the Majestic Langtang Himalayan Ranges at an average
height of 7,000 meters high where there is absolutely no pollution since the beginning
of the planet, turns into icy rocks and glaciers. So every drop of Himalayan Natural
Spring Water is from the rain and the snow falls high in the Himalayan Ranges which
slowly melts and finds it's way filtering through 4,000 meters of Himalayan bedrock.
This wonder of nature was created since the beginning of time as it flows through the
natural purifying filters for more than two decades. The water is insulated from any
external influences by dense layers of protective clay and oozes out as springs at a
height of 3,000 meters in the Langtang National Park within the conversation areas
strictly controlled access and therefore free from environmental pollution.21

Innovations: This is the only type of unique industry which is located at a height of
2,500 meters in order to reach the source and avoid any type of pollution. This
pristine Himalayan natural spring water is packaged in pet bottles in 6 sizes 350 ml,
500 ml, 900 ml, 1 liter, 1.5 liters and 2 liters. This water has already been tested in
USA, Japan, South Korea, Malaysia and India and the concerned governments have
given permission for the sale of water in the respected countries. Interested buyers can
21
www.himalayanspringwater.com

S.V.I.M. Kadi 97
directly contact us and we will inform you the nearest possible distributor to provide
the water. We are seeking for like minded people to join us in this project as
distributors for the world market. As mentioned earlier, this pristine spring water has
been approved by the governments of Japan Food Analysis Center and the FDA from
USA, South Korea, Malaysia and India. Hence we are confident and optimistic that
this pristine water will be approved in all countries and we will be able to serve this
nature's gift all over the world. Himalayan Natural Spring Water is seeking for
importers, distributors, partners, joint ventures, markets all over the globe.

S.V.I.M. Kadi 98
Aava Water

1620 Broadway, Suite B

Santa Monica, CA 90404
Tel: (310)849-4468
Fax: (310)510-6857
Website: www.aavawater.com
Email: dariu@aavah2o.com
President/CEO: Behram Mehta

Water Analysis

*(Mg/l=milligrams per liter)

*(PP/l=pints per liter)

Calcium Ion: 19.64 Mg/l

Fluoride: 0.87 Mg/l
Magnesium: 6.40 Mg/l
Sodium: 31.66 Mg/l

Company History: Move over Alps and Himalayas. The worlds oldest mountain, the
Aravallis has surprised the world over with its natural mineral water known as Aava
Water.

Innovations: * 2007 Global Bottled Water Congress Mexico City Award for best
bottle design. Accreditations including: * HACCP * BIS * ISO 9001:2000 * ISO
14001:2004 (Environmental friendly practices)

Distribution: * Currently growing at 400% per annum in South East Asia. * Opening
USA operations 2008 * A confined aquifer capacity of 4.1 billion liters and daily
recharge rate of 3 million liters per day.22

22
www.aavawater.com

S.V.I.M. Kadi 99
Kinley
Asia wide
Brand Name: Kinley

Drink Type: Water

Kinley: Kinley is a high quality bottled

water processed with added minerals
popular among adults who seek a better
quality of life and a healthy lifestyle.

Available in the following flavor:

Unflavored.
Available in the following locations:
Afghanistan, India, Maldives and
Pakistan.

World wide
Brand Name: Coca-Cola
Drink Type: Soft Drink

Coca-Cola: Coca-Cola is the most popular and biggest-selling soft drink in history, as
well as the best-known product in the world. Created in Atlanta, Georgia, by Dr. John
S. Pemberton, Coca-Cola was first offered as a fountain beverage by mixing Coca-
Cola syrup with carbonated water. Coca-Cola was introduced in 1886, patented in
1887, registered as a trademark in 1893 and by 1895 it was being sold in every state
and territory in the United States. In 1899, The Coca-Cola Company began franchised
bottling operations in the United States. Coca-Cola might owe its origins to the United
States, but its popularity has made it truly universal. Today, you can find Coca-Cola in
virtually every part of the world.

S.V.I.M. Kadi 100

Available in the following flavors: Cola, Cola Green Tea, Cola Lemon, Cola Lemon
Lime, Cola Lime, Cola Orange and Cola Raspberry.

Coca-Cola Quality System

The Coca-Cola Quality System (TCCQS) is our branded quality management system.
Developed by a global, cross-functional team and endorsed by senior management of
The Coca-Cola Company along with our top bottling partners, it is the framework
around which the Coca-Cola system coordinates and guides its activities, drives
continuous improvement and relentlessly strives for quality in everything we do.

This third evolution of TCCQS supports the four principles of our corporate
citizenship framework -- providing quality in the marketplace, enriching the
workplace, strengthening the community and preserving the environment. The quality
system reflects our integrated approach to managing quality, the environment, and
health and safety.

In the United States, bottled water and tap water are regulated by two different
agencies; the FDA regulates bottled water and the U.S. Environmental Protection
Agency (EPA) regulates tap water. Most of the water used to make DASANI® comes
from water utilities which must meet EPA regulations. 23

The FDA regulates food products, including bottled water. Food manufacturers are
responsible for producing safe, wholesome and truthfully labeled food products. The
FDA has established numerous regulations for bottled water including Good
Manufacturing Practices, quality standards, and definitions of the types of bottled
water. By law, FDA bottled water quality standards must be at least as stringent and
protective of health standards as EPA tap water standards.

To demonstrate compliance with FDA's bottled water standards, The Coca-Cola

Company periodically analyzes DASANI to ensure that our consumers are receiving
safe and purified water of the highest quality.

23
www.cocacola.com

S.V.I.M. Kadi 101

Manikchand

Brand Name : Oxyrich

About Manikchand

Dhariwal Industries Ltd - Food & Beverages

division has one of the most modern and comprehensive packaged drinking water
facilities spread across India. The facilities are fully integrated with in house facilities
for manufacturing of Preforms, Closures/Caps and Bottle Blowing. The labels and
cartons are also made in the group companies to ensure total control on quality and
processes.

In a short time we have established ourselves across the length and breadth of India.
Our plants are spread over the western, southern and northern regions.

We are continuously expanding our existing facilities and setting up newer plants at
various locations. Our bottling capacities are not only the most modern but also
amongst the largest too. We have existing capacity to bottle over 3.6 crore liters a year
(360 lakh bottles of 1 liter each).

A philosophy, a pinnacle of success

The Manikchand Group is not just a multi product dynamic corporate with a global
presence. It is not just a trendsetter in every sphere it is present in. It is not just
another name for innovation.

What Manikchand really stands for is a philosophy that filters down to every aspect of
its operations. A philosophy that reflects in every product, every endeavor, every act.
The philosophy is strikingly simple, embrace excellence every day.

A true Indian FMCG, Manikchand’s ever-expanding product portfolio consists of Pan

Masala, Tobacco Products, Mouth Freshners, Electrical Switches, Offset Printing,
Flexible Packing, Real Estate and Construction, Wind Farms, Packaged Drinking

S.V.I.M. Kadi 102

Water, Tea and Match Boxes. The Group’s infrastructure is spread across Pune,
Mumbai, Bangalore, Hyderabad, Vadodara and Tinsukia in Assam. Over and above
we have an extensive nationwide network of franchisees, distributors and consignee
agents.

Across products, across locations, across markets, spread over 50 countries, there is
only one name that embodies Oonche Log, Oonchi Pasand - Manikchand.

The Pinnacle of glory

Manikchand Group was established over six decades ago with the singular vision of
achieving absolute leadership through continuous excellence and steadfast
commitment. Today, with a business that encompasses 12 industries, and presence
across three continents, the Group has manifested this vision, and is poised to soar
even higher.
Our business ventures include the revolutionary to the trendsetting; the innovative to
the ingenious. The Group has leadership position across the industries with one of the
widest and varied port folios in the industry.
The Manikchand Galaxy – our range of products and service :

• Tobacco,Pan Masala and Mouth Freshners

• Electric Switches
• Flexible Packaging
• Packaged Drinking Water

• Real estate & Constructions

• Wind Farms
• Offset Printing
• Flour Mills

S.V.I.M. Kadi 103

Oxyrich Products
200 ml
500 ml
1 ltr
1.5 ltrs
2 ltrs
20 ltrs

Water at its purest - yet another quality product from Manikchand. Taral is one of the
purest packaged drinking waters, being processed with multi-stage purification
processes which include:

• Sand Filter
• Activated Carbon Filter (ACF)
• Ultraviolet Disinfection (UV)
• Ultra Filtration
• Reverse Osmosis
• Ozonisation

S.V.I.M. Kadi 104

 Evolution

After carrying out a detailed survey of Bottled Water in India, it was

realized that the Bottled Water market in India was growing at a
phenomenal pace; as consumer awareness for pure and safe drinking
water was increasing day by day and an Indian on the move was
becoming more health conscious than ever before.

Kothari Beverages, another venture of Kothari Group which

manufactures Bottled water under the brand name Yes, was introduced in the year
1994 to cater to the growing need of Indian consumer. The state of art manufacturing
facility at Nadiad (Gujrat) is the India's largest and fully automatic bottled water
manufacturing plant.

1994 Yes was first launched in two major states of western India - Gujrat and
Rajasthan which was catered from our Nadiad factory. It was an instant success
capturing more than 60% of the market share in just a couple of months.

1995 Second plant was commissioned in Northern India at Kanpur, in the state of
Uttar Pradesh in April 1995.

1996 This year witnessed the third plant being commissioned in Southern India at
Bangalore as well as fourth plant at another Northern Indian state - Himachal Pradesh.
1997 In April 1997, we successfully made our fifth bottled water plant operational in
commercial capital of India - at Mumbai.

1997 By this time, Yes bottled water had already gained a national presence and
created its image as one of the leading bottled mineral water brands of India.

S.V.I.M. Kadi 105

To carry the wave of success forward, Kothari Beverages is now poised for rapid
expansion programme. It has already set-up three franchisee owned manufacturing
units at Kathmandu in the neighbouring country of Nepal, Raipur in Madhya Pradesh
(Central India) and also at Jaipur in Rajasthan and has plans to commission five more
manufacturing facilities at Hyderabad, (Ahdhra Pradesh), Tamilnadu, West Bengal,
Assam and Goa by the year 2000 with a combined production capacity to process 1.0
million ltrs of water per day.

Backward Integration

Further, Kothari Beverages while growing in a rapid and dynamic manner, has also
started backward integration by setting up it's own facility for manufacturing of PET
bottles for bottled water for total in-house consumption.

Diversification

While Kothari Beverages has already created a strong brand in the bottled water
market and also has nurtured a wide distribution network, it has also started
diversifying into synergetic consumer products and eatables. Yes has already
successfully launched a wide range of Yes brand Namkeens in Northern India.

Kothari Beverages, is on it's way to become a leading company in the Foods and
Beverages industry in the next millenium.

Yes bottled water comes in a variety of packings.

Glasses Glasses meet the single time need of an individual and are suitable for one
time consumption

Pouches Yes water pouches are similar to glass packing except that these packing are
flexible and the transportation of poches can be done with ease.

Bottles Bottles are suitable for use by family or a group of people. Just right for a
traveller, picnic day and casual get-togethers. Of course the high quality PET bottles
are reusable as well

S.V.I.M. Kadi 106

Bubble top and Matka
This is just the right combo for large regular use. The bubble top is available
in larger quantities of upto 20 liters and the same can be fitted over any
standard water cooling machine.

We also have a special simple water unit called matka. It is similar to a conventional
pitcher with high quality and low cost. This is targetted at common household or
office use.

Packing Size
Pet Bottles • 0.5 Ltr
• 1.0 Ltr
• 1.5 Ltr

• 2.0 Ltr
HIPS/PET Glasses • 125 ml
• 200 ml

• 250 ml
Pouches • 200 ml

• 300 ml
Polycarbonate Bottles • 18.0 Ltr

• 20.0 Ltr
Matka Used with Bubble top

S.V.I.M. Kadi 107

 11 The bottled water controversy

It is strange that in our country only a scam or a startling negative research finding
seems to gain media and public attention. Poor quality bottled water has been allowed
to be marketed for more than a decade; some 200 brands have mushroomed in the last
five years.

Retail trade, on the railway platform or by the Railways, very often promoted and
marketed the poorest quality bottled water, because many manufacturers were happy
to mark the MRP as Rs 12 or 15, for a one litre bottle, while they sold them to the
retailers at Rs 3 or 4 per litre.

Hence retailers and even some government institutions made the maximum profit and
pushed these low quality brands. Bottled water was often packed in PVC bottles,
known to be injurious to health, and even pouches, in which it is still being sold in
many parts of the country.

It is only two years ago that the health ministry and Bureau of Indian Standards
decided to specify standards for water, and made it mandatory for manufacturers to
mark the BIS certificate number on the labels.

Sadly, even now, brands without BIS certification are being sold on bus stands and in
rural markets. What is worse is the rampant sale of water in pouches in South India
and Gujarat.

If only the consumer could see the dirty rubber pipes from which municipal water is
filled into these pouches, he surely would revolt. The fact that under the very nose of
the government and BIS, water in pouches continues to be sold is most disturbing.

At the time the BIS was being formulated, a few companies marketing international
brands had argued that while they would fully conform to the BIS standards in quality,
as the international brands they marketed had higher quality standards, they should be
exempt from marking the BIS certification number on the bottles, since they felt
brands having higher quality standards should lay claim to this by marking their labels
as 'Pure'.

S.V.I.M. Kadi 108

It must be understood that international companies cannot dilute their brand image or
equity by selling the same brand they market globally at inferior quality standards
here. It would be interesting to establish how many companies market the same
international brand in India.

Aquafina, a Pepsi brand, is probably the largest selling bottled water brand in the US.
In India, exactly the same exacting quality standards had to be adhered to, and the
first batch from each factory was approved by Pepsi headquarters before the Aquafina
brand was allowed to be produced and marketed in India.

Another very important criteria that the BIS or the Ministry of Health must lay down
for selling packaged water, is the minimum equipment required in each factory, the
metal to be used for pipes, and the minimum standards for filling equipment.

This will ensure quality. It is also essential that the quality of packaging material used
be specified, whether it is bottles, cups or pouches. Currently good brands use PET,
and not PVC; this is a must.

BIS is currently evaluating changing the standards of bottled water, this should read
packaged water. It would be beneficial if they engaged in dialogue with international
and national companies, and arrived at the standards used in most developed
countries.

Health authorities in these countries would never allow marketing of water, which is
not totally safe, as this could lead to lawsuits. Purified Water will have quality
standards, different from Natural Spring Water, and the advertising claims must
clearly differentiate between the two.

The main question the government has to respond to is the number of laboratories
with honest scientists it has, to check that packaged water meets the quality standards
for water and the packaging material used.

If the Government cannot enforce these standards and prevent many of the 200 brands
which are sub-standard or allow water sold in cups, or pouches, and cannot ensure
minimum quality equipment to be used in the factories, what is the use of just having
standards and fooling the public?

S.V.I.M. Kadi 109

Companies with brand equity and standards to protect and promote, will invest
heavily to guarantee quality, others who sell by giving high retail margins, will get
away by either taking care of local inspectors, or local laboratories, using their
financial advantage to pervert the 'system'.

The Bottled Water controversy should be put to rest, international quality standards
adopted, and quality brands allowed to claim superiority of quality in their
advertisements, labels etc.

All claims, as always, must stand scrutiny and be substantiated, and if wrong claims
are made, punishment should follow, however, depriving the consumer of knowledge
of what he is buying is being unfair to him.

Let us quickly close the controversy, get new standards introduced, but most of all, it
is the government that must ensure that only such brands that meet standards and
have the minimum factory equipment to meet standards are allowed to be sold; those
producing sub-standard water, or spurious branded water must be heavily penalized.24

24
Review of PepsiCo Chairman, Business Standard

S.V.I.M. Kadi 110

 Controversy between for Trade mark “Himalaya”
Bisleri International would like to clarify its stand to the members of the press and the
public at large against the charges levelled by Tata's Mount Everest Mineral Water
Ltd., (ME) on the breach of copyright for use of the Himalayan brand name. Bisleri
International believes that the word Himalaya is a generic name and cannot be used as
a registered trademark.

On 17th June, 2008 Mount Everest Mineral Water filed a case in Delhi High Court
for an interim injunction to prevent Bisleri from using the word "Himalaya,
Himalayan". It was a bizarre case, where they had no objection for Bisleri using the
existing label, where it says "from the Himalayas" in one line as against the new label,
yet to start (still under printing) where "from the Himalayas" is written in two lines. It
is strange because there is a distinction being sought between Himalaya, Himalayan
and Himalayas.

Mr. Ramesh Chauhan, Chairman and Managing Director, Bisleri International has
questioned the authenticity of the claims saying, "Bisleri had launched its mountain
water 'from the Himalayas' in December 2006. We question the delay in filing an
objection to the authorities. And the second point that comes to my mind is the
company trying to hide its marketing failures, which is the real reason behind the
legal move.
While no final order has been issued, Bisleri and Mt. Everest have come to an interim
arrangement, where Bisleri continues to use the present packaging and label that says
"from the Himalayas" as a descriptive word. As part of the provisional arrangement,
Bisleri has agreed to suspend using the domain www.bislerihimalayan.com. There is
no question of Bisleri trying to or wanting to use the word Himalayan as a Trademark
because Bisleri is the Trademark and is far more recognized and has a tremendous
market value.

In December 2007, Bisleri introduced the new packaging of their mountain water
from the plant in Uttaranchal, in the Himalayas. In the month of April 2008, Mt.
Everest Mineral Water Ltd., launched its new packaging of Himalayan in Mumbai
market.

S.V.I.M. Kadi 111

Pesticide in Bottled water
The European Economic Commission directs that the maximum residue limit for total
pesticides is 0.0005 mg per litre, and 0.0001 mg per litre for a single pesticide. These
pesticides include organ chlorines, organ phosphorous, chlorpyrifos, malathion and
DDT, which can cause serious physical impairment ranging from damage to the
central nervous system to various cancers and congenital malformations.

A significant recommendation of the parliamentary committee was the need to

introduce norms to monitor the quality of ordinary drinking water. Such monitoring
would also serve to highlight major sources of contamination of ordinary drinking
water, which is what most people in the country drink.

S.V.I.M. Kadi 112

PEST

S.V.I.M. Kadi 113

 PEST Analysis
A scan of the external macro-environment in which the firm operates can be
expressed in terms of the following factors:

• Political
• Economic
• Social
• Technological

The acronym PEST (or sometimes rearranged as "STEP") is used to describe a

framework for the analysis of these macroenvironmental factors. A PEST analysis fits
into an overall environmental scan as shown in the following diagram:

Environmental Scan

/ \

External Analysis Internal Analysis

/ \

Macroenvironment Microenvironment

P.E.S.T.

Political Factor: -

S.V.I.M. Kadi 114

Political factors include government regulations and legal issues and define both
formal and informal rules under which the firm must operate. Some examples include:

Norms and Regulation

BIS: Bureau of Indian standards is a premier organization engaged in setting

standards for various products and services. According to BIS, experience chemists
and microbiologists are a must to carry out the tests as per the ISI specification.

ISI: Indian Standard Institution is the former name of BIS but till date ISI is the
MARK given by this organization.

PFA: Governed under Prevention of Food Adulteration Act 1954, this agency
safeguards the interests of the consumers through constant check on the food and
beverage sector.25

FDA A regulated packaged food product

Bottle water adheres to federal and state regulation and standards. At the federal level,
bottle water is regulated as a packaged food product, governed by the U.S. Food and
drug administration. At the state level, bottled water is regulated in various ways,
typically through state environmental, Food or agricultural agencies. IBWA industry
standards are in several cases stricter than both federal and state regulations.

It is compulsory for all the manufacturers who intend to set up the processing unit, to
obtain the ISI mark from Bureau of India Standards.

Unless the inspection is done by the staff, tests carried out in an independent lab and
official confirmation and license number is obtained, unit can’t commence
commercial production.

Indian bottled water is governed under 2 categories:

25
http://www.cfsan.fda.gov/~dms/botwatr.html

S.V.I.M. Kadi 115

 1. Packaged Natural Mineral Water [ Under IS: 13428:1998, Amendment 1-5
upto15th October 2004]

2. Packaged drinking water [ Under IS : 14543: 2004 ]26

Implication:- The Govt. has also got into the action by imposing stringent
legislations regarding wastewater treatment. There is also a compulsory requirement
of Environment Clearances from Pollution Control Boards at the Centre and the
states. The recent Supreme Court directive to move polluting units out of Delhi is also
likely to act as an impetus to future sales of water treatment equipment. Also at the
same time, many existing treatment plants would need to be replaced or upgraded to
meet with more stringent standards. This norms directly affect to quality of the water
when norms was liberal at that time people not got quality product but now due to
political interferences all player produce quality product and also norms increase
entry barrier in the industry.

Tax Policy:- Reduction in Excise duty from 16 per cent to 8 per cent.

(Source:Budget: 2008-09)

The Rs 1,600-crore packaged bottled water industry may grow at over 25 per cent
from 2008 after reduction in Excise duty on packaged drinking water will encourage
more regional players to enter the business, thereby fuelling growth in industry
currently dominated by few players like Coca-Cola’s Kinley, Pepsi’s Aquafina and
Bisleri, apart from regional brands.

This may also result in a reduction in the prices of branded packaged waters by 10-15
per cent from next year. In order to promote clean and hygienic packaged water, the
food processing industry wants VAT to be in the range of 0-4 per cent. The proposal is
meant to encourage regional companies to start bottled water and packaging plants.

26
www.bottledwater.web

S.V.I.M. Kadi 116

According to an industry estimate, there are over 600 known regional branded water
companies in the country and another 800 firms wish to enter this market at the
regional level.

“Since packaged drinking water fulfills the basic needs of the consumer outside the
house and is an essential item of consumption, the duty should be drastically cut,” CB
Gupta, advisor, Federation of Indian Chamber of Commerce and Industry (Ficci),
said.

“If the duty is brought down, the Rs 1,600-crore packaged drinking water industry is
expected to go up by 25-50 per cent,” said Samir Barde, director, Confederation of
Indian Food Trade and Industry (Food wing of Ficci).

Consequence: - By way of taxation, if it will reduce then what happen. There may be
reduction in prices of packaged water. Nowadays, people threaten from psychological
pricing that today people worth bottled water at Rs. 12 and more so, that reduction of
tax will result into 10-15% reduction in price of bottle i.e. people not habitual for
psychological pricing and they are very price conscience.

Also, due to reduction in taxes it helps to bottled water to enter in the growing
industry which results into increase in employment opportunity. Around 800 another
player wishes to enter in regional level.

Environmental Regulations

S.V.I.M. Kadi 117

The Minister for Human Resource Development and Science and Technology, Dr.
Murli Manohar Joshi underlined the need for stringent measures to check
contamination of bottled water.

Expressing concern over the reports of pesticides in bottled water, in a letter to the
Prime Minister, Shri Atal Bihari Vajpayee, Dr. Joshi pointed out that scientists and
experts belonging to his Department have found considerable merit in the findings of
the Centre for Science and Environment (CSE).

The NGO sample survey conducted this year had revealed pesticide residues at
undesirable levels in bottled drinking water and suggested that BIS standards are not
sensitive enough to reveal the level of these residues.

The current standards prescribed by the Bureau of Indian Standards (BIS) for
packaged drinking water and natural mineral water covered under the relevant
Prevention of Food and Adulteration Act are obviously inadequate, he stressed. These
standards are only qualitative and not precise the pesticide residues should be below
detectable limits, when tested in accordance with the relevant methods.

The anti-bottled water arguments made are that, unlike tap water, bottled water uses
up oil and other fossil fuels to be produced and shipped, fills up landfills, represents
wasted money, and does not go through nearly as rigorous filtering and cleansing
processes. However, supporters of bottled water are quick to counter that bottled
water is not simply tap water in a bottle and the oil used is minimal in comparison to
that of general transportation or other packaged foods and beverages. In addition,
bottled water is regulated by the Governed under Prevention of Food Adulteration Act
1954, which requires bottled water to comply with bottled water-specific standards, as
well as regulations required of all food products.

It also takes water to make a bottle. If a container holds 1 litre it requires 3 to 5 litres
of water in its manufacturing process (the higher estimate includes power plant

S.V.I.M. Kadi 118

cooling water). By one estimate the total amount of water used to produce and deliver
one litre bottle of imported water may be as high as 6.74 litres.

In terms of groundwater impact, both withdrawals for the public supply and private
bottled water stock have significantly less impact nationally than irrigation, (the
heaviest user of groundwater at 68 percent), industrial, and farming uses. Only 19
percent of groundwater withdrawals in 2000 were used for public-supply purposes.

Implication:- 40% of bottled water is really just re-packaged tap water.

It takes two minutes to drink a bottle of water, but it takes thousands of years for
that piece of plastic garbage to go away. This will result into environment impact.
Government pressure is to make the product more eco-friendly and also NGO
work for reduce pollution.

Product Labeling Requirement

The labeling of the product should have following provisions & the features
• Label should have
 customer brand name
 the name of the product category
 name and address of the manufacturer
 net weight or volume
 the batch number
 the name of source or place of origin of the product
 the date of packaging
 the date of expiry
 direction for storage
 treatment for disinfection
 the license or certification from the concerned authority
Source:- www.ibwa.com )

Implication:- Via this political rules all players provide total detail of product to the
customer, because of increase in health consciousness among people. When it is
strict then player not cheat with the customer.

Wage legislation- Minimum Wage & Overtime

S.V.I.M. Kadi 119

 (Source:-Minimum wage act 1948)

The Payment of Wages Act, 1936

S.V.I.M. Kadi 120

The Payment of Wages Act, 1936 was enacted to regulate payment of wages to
workers employed in Industries and to ensure a speedy and effective remedy to them
against illegal deductions and/or unjustified delay caused in paying wages to them.
The existing wage ceiling under Payment of Wages Act, 1936, was fixed at Rs. 1600/-
pm in 1982. With a view to enhance the wage ceiling to Rs. 6500/- p.m. for
applicability of the Act, to empower the Central Government to further increase the
ceiling in future by way of notification and to enhance the penal provisions etc., the
Payment of Wages (Amendment) Act, 2005, which was passed by both Houses of
Parliament, has been notified on 6.9.2005 as an Act 41 of 2005 by the Ministry of
Law & Justice. Subsequently, the Ministry of Labour & Employment has issued the
Notification No. SO 1577(E) to make the Payment of Wages (Amendment) Act, 2005
effective from the 9th November 2005.27

Industry standard
The bottled water industry also employs additional measures to help ensure the safety
and quality of its product, beginning with the source, all the way to packaging. Bottler
members of the IBWA must adhere to the IBWA model code, which requires members
to undergo annual, unannounced plant inspections. These inspections are conducted
by an independent third-party organization and assess compliance with all applicable
federal and state regulations and industry requirements. The IBWA model code, in
several cases, is more stringent than state and federal regulations and has been
adopted by more than a dozen states as their standard for bottled water regulation.
(Source: www.bottledwater.org )

Industrial safety Regulation

The World Health Organization (WHO) publishes Guidelines for Drinking-water

Quality which many countries use as the basis to establish their own national
standards. The Guidelines represent a scientific assessment of the risks to health from
biological and chemical constituents of drinking-water and of the effectiveness of
associated control measures. WHO recommends that social, economic and

27
www.govtofindia.com

S.V.I.M. Kadi 121

environmental factors be taken into account through a risk-benefit approach when
adapting the Guideline values to national standards. As the WHO Guidelines for
Drinking-water Quality are meant to be the scientific point of departure for standards
development, including bottled water, actual standards will sometimes vary from the
Guidelines. It should also be noted that water used for making edible ice should be
subject to the same drinking-water standard and include specific sanitary requirements
for equipment for making and storing ice. For water in carbouys, similar sanitary
requirements for dispensing devices need to be observed.

Overview:- Political factor reduce entry barrier in this industry because here
government reduce Excise duty from 16% to 8% and increase profitability of the firm.
Other side norm are not follow that much strictly so many unorganized player also
came in bottled water industry without follow strict and perfect rules of the water
purification. But other side some safety, environmental rules, industry norms and
minimum wage pay scale are followed. so overall it favorable for this industry.

Economic Factors: -
S.V.I.M. Kadi 122
Economic factors affect the purchasing power of potential customers and the firm's
cost of capital. The following are examples of factors in the macro economy:

Economic Growth

Growth in % Income %
Consumption %
9 8.1
8 7.6
7.2
Percentage

6.8 6.6 7
7
6 5.6 5.3
5 4.2
4 3.6
3 2.2
2 1.1
1
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year

(Source:- www.indiabudget.nic.in )
Growth is of interest not for its own sake but for the improvement in public welfare
that it brings about. Economic growth, and in particular the growth in per capita
income, is a broad Quantitative indicator of the progress made in improving public
welfare. Per capita consumption is another quantitative indicator that is useful for
judging welfare improvement. It is therefore appropriate to start by looking at the
changes in real (i.e. at constant prices) per capita income and consumption.

S.V.I.M. Kadi 123

Implication:- After increasing in income people consume more as compared to the
past year so it increase consumption of bottled water and people also spend money
after their welfare, it increase the rate of spending money on behalf of their primary
need. After increase income people lifestyle also change and it affect consumption of
bottled water.

• Economic measures
1. Sustaining and achieving GDP of 8-9 % in next 5 years.
2. Allowing foreign direct investment in more sectors so as to maintain the
growth rate.
3. Giving prime importance to infrastructure development and attract FDI in this
sector.
4. Improving educational & healthcare facilities.
5. Simplifying procedures and relaxing entry barriers for business coming from
outside the nation.
6. Poverty decline.

(source:- Economic Survey 2007-08)

Implication:- After declining the poverty line people spend more money on behalf of
their primary need and go to status need that is bottled water for example. Also when
poverty line decline that means people becomes literate and they do not compromise
with health and safety.

GDP (purchasing power parity)

S.V.I.M. Kadi 124

 Country
Value
Name Rate
United 13,86 1%
States 0
China 7,043 10%
Japan 4,417 1.30%
India 2,965 7.6%
Germany 2,833 1.7%
United 1.9%
2,147
Kingdom
Russia 2,076 7.5%
France 2,067 1.9%

(Source: - http://www.indexmundi.com )

The economic impact of bottled water consumption is especially relevant in

developing countries, where tap water is often of poor quality and where, even if the
quality of tap water may be acceptable, it is often difficult to obtain reliable data on
the quality of tap water.

The liberalization process in India started 5 years back, with consistent reforms during
this phase, the Indian economy is expected to achieve a growth of about 9 % this
financial year.

India is one of the fastest growing economies in the world and by the year 2020 it is
expected to be the third largest economy after the United States and China.

The GDP per capita (at purchasing power parity) is also expected to jump during this
period from approximately USD 3100 to USD 5000. This along with the fact that a
majority of the population would be in the working age group by 2020, would lead to
not only a larger but also a richer consumer base, making it one of the most attractive
markets in the world. The industrial growth at current prices in the financial year
2007-08 reached 10.7 %, service industry grew by 8.9% & agriculture at 5.6 %.

Consequences: - for economic growth on one hand consumer income & consumption
gap becoming narrower and also government favoring about economic measures like
expending to infrastructure, allowing FDI, educational & healthcare facilities, poverty
decline. So, in terms of the industry the growth will increase as economic measures is
favoring.

S.V.I.M. Kadi 125

Inflation Rate
Definition of Inflation rate (consumer prices): This entry furnishes the annual
percent change in consumer prices compared with the previous year's consumer
prices.

Inflation rate
Year (consumer
prices) (%) (Source: -http:
2000 6.7
2001 5.4
2002 5.4
2003 5.4
2004 3.8
2005 4.2
2006 4.2
2007 5.3
2008 5.9

//www.indexmundi.com/g/g.aspx?v=71&c=in&l=en)

Implication:- when inflation rate increase then prices of the raw material increasing
and it directly affect market price of the product. Also in this type of situation people
are not spend more on behalf of primary goods because all primary goods price
increase more as compared to other product. And it reduce consumption of primary
good.

S.V.I.M. Kadi 126

Labor Cost

Treatment and purification account for the next major cost. Even with the state-of-the-
art treatment system with reverse osmosis and membranes, the cost of treatment is a
maximum of 25 paise a litre (Rs.0.25/litre). Therefore, the cost of producing 1 litre of
packaged drinking water in India, without including the labor cost, is just Rs.0.25. In
a nutshell, in manufacturing bottled water, the major costs are not in the production of
treated and purified water but in the packaging and marketing of it.

The cost of a bottle, along with the cap and the carton, is the single biggest cost -
between Rs.2.50 and Rs.3.75 for a one-litre bottle. For water sold in big plastic jars
(20-50 litres), which are also reused, or in pouches, this cost is much lower. It is
precisely owing to this that companies sell water at even Re.1 a litre in a 20-50 litre
jar and still make profits. Labour and establishment and marketing costs are highly
variable and depend on the location and size of companies. Informal discussions with
industry members reveal that the gross profit of this industry can be as much as
between 25 and 50 per cent.

Implication:- we have already seen that labor cost is totally variable and depend on
location, in urban area labor cost is higher so ultimately increase in production cost
compared to rural area in which we get labor at low price and increase profitability.
When inflation rate increase then automatically labor charges also increases in market
it directly affect labor cost in production.

S.V.I.M. Kadi 127

Labor Workforce

Year Labor force

2002 406000000
2003 406000000
2004 472000000
2005 482200000
2006 496400000
2007 509300000
2008 516400000
Source:-

http://www.indexmundi.com/g/g.aspx?v=72&c=in&l=en

Implication:- From above table we can say that labor workforce continuously
increase so it reduce the cost of labor in industry. Also easily get workforce from the
market with experience or expert because in market competition among work force
increase and it reduce bargaining power of labor.

Exchange Rates

S.V.I.M. Kadi 128

 U.S.Dollar Euro
Exchange Rate Change (%) Exchange Rate Change (%)
2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08
April 44.90 42.20 1.40 -0.40 55.20 57.00 3.40 -2.20
May 45.40 40.70 1.10 -3.50 58.00 55.10 4.80 -3.30
June 46.00 40.80 1.30 0.20 58.30 54.70 0.50 -0.70
July 46.00 40.80 1.00 -0.90 59.00 55.40 1.20 1.20
August 46.50 40.80 0.10 1.00 59.60 55.60 1.00 0.40
September 46.10 40.30 -0.80 -1.20 58.80 56.00 -1.40 0.70
October 45.50 39.50 -1.30 -1.90 57.40 56.20 -2.40 0.30
November 44.90 -1.30 57.80 0.70
December 44.60 -0.70 59.00 2.10
January 44.30 -0.70 57.70 -2.20
February 44.20 -0.20 57.70 0.00
March 44.00 0.40 58.30 0.70

Source:- RBI Review

Implication: - From 1991 new resolution had been taken that is liberalization,
privatization and globalization. Globalization works country to country business in
which exchange rate given above. if exchange rate change then it will impact on
business because all part or technology related to bottled water business imported
from foreign so exchange rate affect business investment. When exchange rate
increase than it will increase cost of technological product which is imported from
foreign.

S.V.I.M. Kadi 129

 Social Factors: -
Social factors include the demographic and cultural aspects of the external
microenvironment. These factors affect customer needs and the size of potential
markets. Some social factors include:

Demographic
Demographic and economic indicators
2004 2005 2006 2007 2008
Population aged
65+: January 53,417.99 55,077.92 56,718.11 58,352.63 59,992.44
1st ('000)
Population
density (people 366.52 372.24 377.93 383.60 389.23
per sq km)
GDP measured
at purchasing
power parity 2,096,261.84 2,354,378.01 2,668,742.52 2,996,508.06 3,305,360.18
(million
international $)
Real GDP
growth (% 7.89 9.13 9.82 9.34 7.80
growth)
Annual rates of
inflation (% 3.77 4.25 5.80 6.37 7.93
growth)
Consumer
expenditure 401,452.51 459,641.07 505,017.08 620,680.35 716,715.04
(US$ million)
Annual gross
income (US$ 494,544.90 565,701.32 621,197.41 759,760.60 776,126.28
million)
Annual
disposable
468,998.16 535,823.07 588,719.14 719,282.81 734,356.59
income (US$
million)

Source World Economic Factbook

• International Marketing Data and Statistics

• Future Demographic

S.V.I.M. Kadi 130

Implication:- Annual disposable income increase year by year it shows high expense
for status and rich life style. So here good market for bottled water and other drinks.
And people are becoming status seeker so they use more bottled water.

Health Consciousness

As the water supplies today are stretched to meet the demands of the ever increasing
population, more and more people in the urban areas are looking towards bottled
drinking water to meet some of their demands. While safety and health remain the
most important considerations they aren’t always founded on facts. Hence arise the
need for having specific standards, especially in the wake of certain water related
disasters.

WHO publishes Guidelines for Drinking Water Quality based on which countries
have their own national standards, Though stricter standards are applied for control in
Packaged Drinking Water, it is not always easy to maintain such standards because of
long periods and higher temperature of storage. Also there is no agency to detect fraud
at the level of manufacture or distribution

Keeping the above considerations in mind it is necessary to formulate policies which

do not separate it from health and develop an integrated food and Water resource
management.

About 25% of bottled water sold is simply re-processed/used municipal (city) water.
While there have been few comprehensive studies, one analysis several years ago
found that about 22 percent of brands that were tested contain, in at least one sample,
chemical contaminants at levels above strict state health limits. If consumed over a
long period of time, some of these contaminants could cause cancer or other health
problems at rates higher than those considered tolerable by the regulatory body setting
the standards.

S.V.I.M. Kadi 131

Bottled water processed with distillation or reverse osmosis lacks fluoride ions which
are sometimes naturally present in groundwater. The drinking of distilled water may
conceivably increase the risk of tooth decay due to a lack of this element. However,
most people continue to cook with common tap water and this is thought to
potentially provide sufficient fluoride to maintain normal prophylaxis in many
instances. Any other minerals in tap water such as calcium and magnesium are present
in such minuscule amounts that their absence is compensated for many thousands of
times over by other dietary sources. On the other hand, some people wish to avoid
exposure to fluoride, particularly systemic ingestion of fluoride in drinking water, and
may choose such bottled water for this feature. Bottled water is typically printed with
expiration dates. However, industry associations claim "bottled water can be used
indefinitely if stored properly."

Implication:- The market is expected to grow rapidly in the coming years due to
growing consumer concerns about fitness, water quality and health. It is the social
responsibility to produce a safe and qualitative water for customer also follow all
national and regional law for quality measure and help to the society. And when
people are more conscious about health then it directly affect the consumption level of
people.

S.V.I.M. Kadi 132

Population Growth Rate
Definition of Population growth rate: The average annual percent change in the
population, resulting from a surplus (or deficit) of births over deaths and the balance
of migrants entering and leaving a country. The rate may be positive or negative. The
growth rate is a factor in determining how great a burden would be imposed on a
country by the changing needs of its people for infrastructure (e.g., schools, hospitals,
housing, roads), resources (e.g., food, water, electricity), and jobs. Rapid population
growth can be seen as threatening by neighboring countries.

Population
Year
growth rate (%)
2000 1.58
2001 1.55
2002 1.51
2003 1.47
2004 1.44
2005 1.4
2006 1.38
2007 1.606
2008 1.578
(Source:
http://www.indexmundi.com/g/g.aspx?v=24&c=in&l=en)

Implication:- From the above table we can say that there is market potential for India
because it always growing rate. So in India always population increase year by year
and it directly affect total consumption of consumer goods. It will increase the
consumption of bottled water.

Emphasis on safety

S.V.I.M. Kadi 133

NRDC conducted a four-year review of the bottled water industry and the safety
standards that govern it, including a comparison of national bottled water rules with
national tap water rules, and independent testing of over 1,000 bottles of water. Our
conclusion is that there is no assurance that just because water comes out of a bottle it
is any cleaner or safer than water from the tap. And in fact, an estimated 25 percent or
more of bottled water is really just tap water in a bottle -- sometimes further treated,
sometimes not.

Choose to buy bottled water and are concerned about its safety, buy brands with a
known protected source and ones that make readily available testing and treatment
information that shows high water quality.

Implication:-by threat of safety norms the entry barrier will be stronger and it reduce
the competition among national player.

Lifestyle Trends
Lifestyle indicators

S.V.I.M. Kadi 134

 2004 2005 2006 2007 2008
Consumer expenditure
144,356.9 164,905.1 182,089.9 221,046.2 250,331.6
on food (US$ million)
Internet users ('000) 35,000.00 60,000.00 89,892.80 128,876.83 167,876.93
New registrations of
1,038.29 1,106.54 1,311.12 1,606.12 1,795.39
passenger cars ('000)
Consumer electronics
143,885.79 163,804.26 191,773.64 229,424.42 282,464.52
(Rs million)
Dog and cat food (Rs
824.66 947.52 1,056.60 1,198.64 1,352.62
million)

Source

• World Income Distribution

• Who Buys What
• World Consumer Spending
• World Consumer Lifestyles Databook

Implication:- Here consumer expenditure on necessary goods increase year by year

so it is opportunity for necessary good producer to increase market share & volume of
product. Also people are follow western culture in routine life spend more money on
behalf of consumer goods day by day it increase the consumption of bottled water
because mostly foreigner use bottled water.

Age distribution

S.V.I.M. Kadi 135

(source:- www.censusindia.gov.in )

Count 0-14 years 15-64 years 65 years and older

Total
ry male Female male female male female

China 168,040,006 152,826,953 439,736,737 413,454,67341,200,29746,573,816 1,261,832,482

India 175,228,164 165,190,951 324,699,562 301,821,38323,925,37123,138,386 1,014,003,817

Food Choice by generation

Food \Age 18-34 35-53 54-65 65+

Pasta 81% 76% 60% 56%
Bottled water 56% 47% 37% 19%
Low fat yogurt 33% 31% 29% 22%
Calcium fortified orange juice 29% 28% 30% 34%
Cranola/ breakfast 25% 18% 9% 7%
Sport drink 20% 15% 7% 9%
brown rice 18% 21% 17% 13%
Bottled tea 15% 13% 9% 5%

Implication :- choice of bottled water also depend on generation and age of people
from above graph we can say that below50 year people consume more bottled water
and in India this portion is more and increase from past few year so it increase the
demand of bottled water.

Literacy rate:-
Definition of Literacy: This entry includes a definition of literacy and Census Bureau
percentages for the total population, males, and females. There are no universal
definitions and standards of literacy. Unless otherwise specified, all rates are based on

S.V.I.M. Kadi 136

the most common definition - the ability to read and write at a specified age. Detailing
the standards that individual countries use to assess the ability to read and write is
beyond the scope of the Factbook. Information on literacy, while not a perfect
measure of educational results, is probably the most easily available and valid for
international comparisons. Low levels of literacy, and education in general, can
impede the economic development of a country in the current rapidly changing,
technology-driven world.28

Year Literacy (%)

2000 37.7
2001 37.7 Source:
2002 37.7
2003 48.3
2004 48.3
2005 48.3
2006 48.3
2007 47.8
2008 47.8

http://www.indexmundi.com/g/g.aspx?v=39&c=in&l=en

Thanks to higher levels of literacy and awareness and higher quality expectations,
demanding consumers also evinced "readiness to pay premium prices for deriving
intangible value (notwithstanding) a high degree of differential price structures
between branded and unbranded goods."

Career
Bottled water industry is growing at mouth watering rate of 40 percent per year.
Current market size of bottled water industry is Rs 1,800 crore and is expected to

28
www.censusindia.com

S.V.I.M. Kadi 137

grow upto Rs 2200 crore by 2010. With the growing market there is a growing
demand for employees in bottled water industry.

It is surprising, but there are around 1600 brands of bottled/packaged water in India.
This market has witness the exponential growth rate and industry predicts it will soon
be the largest segment in the soft drinks market, outstripping even carbonated drinks,
which have been losing market to both, fruit drinks/juices and packaged drinking
water.

With the growing market size, one can imagine the employment opportunities being
created with the surge in bottled water industry. It’s just not manufacturing of bottled
water any more. Professionals required in this industry are engineers with mechanical,
electrical and chemical background.
Organized packaged water industry provides unique employment opportunities to the
locals under following segments:

• Geological Engineers (Water Diviners):

• Mechanical / Electrical Engineers
• Chemical Engineers
• Chemist
• Microbiologists
• Researchers
• Marketing & Distribution
(Source:- http://www.merinews.com/catfull.jsp?articleID=137322 )

Implication :- This factor directly affects social responsibility of the industry and also
this industry grow at the rate of 35% to 40% so here employee are safe and it increase
the level of recruitment.

Culture

S.V.I.M. Kadi 138

India business culture is very strict and you should seek information on India culture
in business before doing international business in the Indian culture.

Punctuality is important in India. Because of this, you will want to be at meetings on

time. The attire, which is worn for business in India, will generally be suits, which is
similar to the attire worn in Western countries. If you bring a gift for a business
associate, it should only be given after the meeting is over. India has a sizeable
Muslim population, so you should be cautious when offering gifts of alcohol. It is
important to always drink bottled water in India. Much of the water in the country is
contaminated. When you eat, it is best to dine at well-known establishments. You will
want to avoid restaurants, which do not practice good hygiene. Driving in India can be
dangerous. Many people don't follow the traffic rules. If possible, always have
someone drive you around.
Another custom is to eat with your fingers but remember only of the right hand ...
Besides the main dishes, there are also countless irresistible snacks available on every
street corner, such as samosa, fritters, dosa and vada. For the more conservative
visitor, western cooking can always be found. Indeed, the best styles of cooking from
throughout the world can be experienced in the major centers in India. Tea is India’s
favorite drink, and. many of the varieties are famous the world over. It will often
come ready brewed with milk and sugar unless "tray tea”, is specified. Coffee is
increasingly popular..Nimbu Pani (lemon drink), Lassi (iced buttermilk) and coconut
water and milk straight from the nut are cool and refreshing. Soft drinks (usually
sweet) and bottled water are widely available, as, are ’Western alcoholic drinks.
Indian beer and gin are comparable with the world’s best, and are not expensive. Note
that Liquor Permits are required in Tamil Nadu and Gujarat.

Media Views and Advertising and Publicity

S.V.I.M. Kadi 139

With growth as strong at it has been, the industry has come into the spotlight.

Indian people are prefer news paper more in routine life so all bottled water supplier
focus on newspaper for giving any advertise relating to bottled water. 84% of ad
spends went to Newspapers It affect directly regional and local customer also.29

Technological Factors: -
29
AdEx Jan-jun’2005

S.V.I.M. Kadi 140

Technological factors can lower barriers to entry, reduce minimum efficient
production levels, and influence outsourcing decisions. Some technological factors
include:

Recent technological development

R&D activity

• Special Advantages of IIECI Mineral Water Plant ::

• Plant design on latest state of art – European technology, compact, decent
• Offered total imported systems
 Sealed Packed IS0-9001 MEMBRANE– HYDRAUNATICS – California,
U.S.A.
 Micron Cartridge Filter Bag – AmeteK – Suzuki – Japan
 Anthracite

Manufacturing stage wise inspection

• After fabrication of the unit

• At the time of assembling of the unit.
• While fitting of sealed pack Membrane.
• Inspection of fully installed and running plant for 3 days at our factory with
testing.

IIECI offers Membrane Cleaning facility at its Factory, for enhancing life of
Membrane Systems.

A Range of System sizes are available to match your bottling needs

IIECI offers complete system including Packaging / filling / Sealing line on Turnkey
basis.

Plant is designed on 10% higher capacity & T.D.S. i.e. 279 ppm, for better result in
future.
IIECI offers you 70% recovery of plant

S.V.I.M. Kadi 141

 (Source:- http:/www.b2bindia.co.in/indianione.exchange/mineral_water_plant)

Implication:- Zero Maintenance: With the best design plant has absolute zero
maintenance. The replacement of consumable is also low. Further, preventive and
periodic maintenance are easy and can be done by any persons. Above all activity
shows latest technological changes in bottled water segment and it reduce the cost of
production and wastage of water in production. Also all technology produce quality
product in market and increase the level of reliability of customer among company
product.

Automation

Industrial RO system

S.V.I.M. Kadi 142

 (Source:-www.ampac.com)

Technology incentive

• Bottled Water Companies Use Hollow Fiber Technology to Reduce Operating

Costs
• Eliminate feed water variability
• Minimize cost
• Maximize uptime
• Bottle blowing machines today, are enhanced by new technology.

Purification

A robust framework enables precision and adds value to a process. Equipped with the
right tools and techniques, goals are achieved and perfection attained.

The process of manufacturing packaged drinking water through internationally

employed methodologies at OXYRICH is supported by the most modern and
sophisticated infrastructure. Right from sourcing the raw water to various stages of
filtration and the final packaging, global standards are followed to ensure purity,
quality, and superiority.

Five force model

S.V.I.M. Kadi 143

Rivalry among competitors (High)
• More number of unorganized player in market.
o Out of 1800 player only 20% are organized.
o 200 brands compete in market.30
In bottled water market most of the brands are unorganized
because people are price conscious and prefer easy availability
of bottled water so unorganized player increase the competition
among the player.
• Growing at the rate of 38% to 40% from past two year.31
o Growing faster than GDP growth rate.
o Industry comes under growing stage.

30
http://www.naukrihub.com/india/fmcg/overview/bottled-water
31
http://investorideas.com/IiI/News/080706.asp

S.V.I.M. Kadi 144

 Bottled water segment increase 30 to 40% and that’s why
players are compete internally for capturing high market share
of growing industry. Also players are interested capture more
market share before industry came under maturity stage.
• Less option available for product differentiation.
o Flavored water not captures that much market.
In bottled water market product differentiation is less so
everybody compete for takes their position and relative market
share of their own brand and it increase the rivalry among
competitors.
• High profitable industry.
o Total cost is between 5 Rs. To 7 Rs. And sold in market at 10 to 12 Rs.
per 1 liter bottled.
In every industry all players are interested to increase
profitability of firm and in bottled water industry all ready
player get maximum return and maintain that margin all player
compete with each other.

• Switching cost for customer is nearer to zero in bottled water market.

In beverages industry switching cost for customer is nearer to zero so
all players provide maximum benefits to its customer and it increase
the competition among rivalry.
• Low exit barrier.
Investment in bottled water technology is not that much high so
competitors easily exit from the market and it reduce the rivalry among
competitors.

S.V.I.M. Kadi 145

Factor Low Moderate low Medium Moderate High High
Unorganized player 
Growth Rate 
Switching cost 
Exit barrier 
Margin 
Product Differentiation 

Domestic companies Parle, United Breweries, Tatas, DS Foods and multinationals PepsiCo
and Coca-Cola, the world's largest aerated drinks maker, are all "battling for leadership" in the
rapidly growing packaged water market in India. As things stand, food and beverages (not to
speak of tobacco) account for the largest consumption categories (40%) in India. 32

Threats from new entry ( High)

• The fastest-growing and most attractive beverage category in the world.

Bottled water is most attractive industry in beverages category in the
world and that’s why other player are interested to invest in attractive
industry.
• Annual growth rate more than 38%33
Indian bottled water market grow at the rate of 30 to 38 % so many
players are interested to capture market of bottled water because the
growth rate is higher as compared to GDP so the profitability is higher
as compared to other business.

• Large pool of buyers but no one accounts for a significant fraction of overall
market demand.

32
www.fnbnews.com
33
http://www.merinews.com

S.V.I.M. Kadi 146

 In market buyers demand is more as compared to supply of bottled
water so many other players are interested to get market gap of demand
and supply and get profit from the market.
• Buyer needs and requirements increase in market.
o Due to the concerns over the safety of tap water.
o An increased focus on health and fitness.
o The hectic on-the-go lifestyles of consumers.
o Attracted by the convenience, purity and portability.
Above all points are attract more number of player in market
for satisfy the need of the market and many non organized
player are enter in market for capturing untapped market.
• Enhance waters offered higher margins.
In bottled water the cost of production and raw material is not high.
One liter bottled produce in 3 to 5 Rs and sell in market at more than
10 Rs so manufacturer get maximum profit in this segment.
• Low investment at initial stage.
• Entry Barrier
In bottled water market entry barrier is low so it increases threats from
new entry.
• Brand name is not important but customer focus on easy availability.
In bottled water market customer are not that much conscious about
the brand name of the different player but customer are focus on easy
availability of bottled water so regional player are also easily enter in
market and capture regional market.
• Government policy
Government also support bottled water market in India via reducing
excise duty from 16% to 8% and that’s why the threats from new entry
increase in market of bottled water.34

• Degree of product differentiation

34
Budget 2008-09

S.V.I.M. Kadi 147

 The major challenge for most companies is product innovation and
differentiation as water is still just water. In bottled water market
product differentiation is not that much easy or possible because
people are always interested to drink pure and non flavor water, also in
India flavored water not get success so new player are not easily came
in to market.
• More number of substitute available in market.
In this beverages segment many substitute products are available in
market like Soft drinks, Tea, Coffee, Fruit Juice and Pouch water so
new player think before entering in bottled water market.
• Proper distribution channel needed.
In bottled water easy availability is more important so without proper
distribution new player not capture that much market so new player not
came without proper distribution.

Factor Low Moderate low Medium Moderate High High

Market attractiveness 
Life style 
Buyer Requirement 
Margin 
Investment 
Unorganized market 
Govt. Policy 
Product Differentiation 
Substitute Product 
Distribution Channel 
Entry Barrier 

Threats of Substitute (High)

• Many substitute products are available in market.

S.V.I.M. Kadi 148

 o (For ex. Purifier, vending machine, Alcoholic drink, Juice, Tank water,
Tea & Coffee, Water Pouches)

• Switching cost is nearer to zero.

All customers are easily switched over substitute product of bottled
water without any extra expense so the threats of substitute product are
stronger in bottled water market.

• Substitute products are available at lower price in market.

From all substitute product of bottled water many substitute available
at lower price like Tea, Pouch water etc. so it increase the threats of
substitute product.
• Substitute have better performance
Substitute like Fruit Juice, Coconut Water and soft drinks have better
perform in all segments and also today all people prefer energy drink
so it increase the threats of substitute products.
• Basic need of the customer.
Customer basic need is water and all substitute not satisfied this basic
need of customer so here substitute product not affect demand of
bottled water.

Factor Low Moderate low Medium Moderate High High

Switching cost 
Substitute product 
price
Substitute performance 
No of Substitute 
Need of customer 

Bargaining power of buyer (Moderate)

• Contracting with institutes
Now many institutes buy in huge quantity and also they contract with
supplier so it increase the bargaining power of buyer.
• Product Differentiation

S.V.I.M. Kadi 149

 In market manufacturer not provide any differentiation in product so
buyer bargain more in one product.
• Price sensitivity
When buyers are more price sensitive than it increase bargaining
power of buyer
• Purchased in low quantity.
All Buyers are purchase in low quantity like 1 liter or 2 liter so they
not bargain with manufacturer.
• Importance of quality and performance.
When people are more conscious about health and safety then all are
not bargain with quality product.
• Product Information.
People do not have full data of all brands so they do not compare with
other brands and bargain with dealers.

Bargaining power of buyer

Factor Low Moderate low Medium Moderate High High
Contracting with 
institutions
Purchase quantity 
Quality 
Product Information 
Price sensitivity 
Product Differentiation 

Bargaining power of Supplier (Moderate to low)

• PET Supplier
Govt has taken decision to use PET bottle only with the benefit of
recycling but due to there is a less supplier available in market, the
bargaining power of supplier is high.

S.V.I.M. Kadi 150

 • Threats of buyer’s backward integration.
Players easily get raw data (water and Bottled) through backward
integration and the cost of backward integration is also low so it reduce
the bargaining power of supplier.
• Bulk buying from supplier.
Manufacturer purchase bottle or raw data in a bulk quantity so it
increase the bargaining power of buyer.
• Low differentiate in raw material
Supplier not differentiate raw material of bottled water so they not
attract more buyer from the market and for this reason supplier not
bargain with buyer but try to provide raw data as per buyer need.
• Water Availability
There is a huge no of water supplier available in market so buyer can
bargain with supplier.

Bargaining power of supplier

Factor Low Moderate low Medium Moderate High High
Buyer backward 
integration
Water Availability 
Purchase Quantity 
Pet Supplier 
Product Differentiation 

S.V.I.M. Kadi 151

Conclusion: - Market opportunity is one of the primary function before going to find
STP (segment, target and position) the prospects. To check attractiveness of the
market that has many way making it possible which include PEST analysis, five
forces and all.

Five force the model helps to determine the attractiveness of the industry & how each
factor favorable or unfavorable. The detail study of this model will gives more
insights about how to operate and survive in the market. PEST is the factors affecting
and one can say that it will be fix for a period of time.

But five forces the model indicate the factors which continuously change which
management have to considered. Management has to change according to
unfavorability of the factors and favorability of the forces. Overall five force not
favorable to the industry because in market rivalry is strong and new entry threats also
high it affect market demand.

S.V.I.M. Kadi 152

 BCG Matrix
Boston Consulting Group Matrix

Player Brand Name Market share Relative market

share
Parle Bisleri 40% 1.74
Coca Cola Kinley 23% 0.58
PepsiCo Aquafina 11% 0.28
K.K.Beverages Kingfisher 10% 0.25
Mount Everest + Himalayan 8% 0.20
Tata
Oxyrich
Others Yes 8% 0.20
Baily, etc.

(Source:- http://investorideas.com/IiI/News/080706.asp )

Aquafina Himalayan
Kingfisher Others

Industry Growth Rate 38%

50 Star Question Mark

High

Bisleri Kinle
y
Industry growth rate

Medium

25
Cash cow Dog
Low

2 1 0
High Medium Low

Relative market share

S.V.I.M. Kadi 153

Question marks - Question marks are growing rapidly and thus consume large
amounts of cash, because they have low market shares they do not generate much
cash. The result is a large net cash consumption. A question mark (also known as a
"problem child") has the potential to gain market share and become a star, and
eventually a cash cow when the market growth slows. If the question mark does not
succeed in becoming the market leader, then after perhaps years of cash consumption
it will degenerate into a dog when the market growth declines. Question marks must
be analyzed carefully in order to determine whether they are worth the investment
required to grow market share. In this group relative market share of the company is
lower and market growth rate is high. This group shows market opportunity in the
market. All players who are come under this group are trying to increase their market
share

Stars - Stars generate large amounts of cash because of their strong relative market
share, but also consume large amounts of cash because of their high growth rate;
therefore the cash in each direction approximately nets out. If a star can maintain its
large market share, it will become a cash cow when the market growth rate declines.
The portfolio of a diversified company always should have stars that will become the
next cash cows and ensure future cash generation.

Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that
is greater than the market growth rate, and thus generate more cash than they
consume. Such business units should be "milked", extracting the profits and investing
as little cash as possible. Cash cows provide the cash required to turn question marks
into market leaders, to cover the administrative costs of the company, to fund research
and development, to service the corporate debt, and to pay dividends to shareholders.
Because the cash cow generates a relatively stable cash flow, its value can be
determined with reasonable accuracy by calculating the present value of its cash
stream using a discounted cash flow analysis.

Dogs - Dogs have low market share and a low growth rate and thus neither generate
nor consume a large amount of cash. However, dogs are cash traps because of the
money tied up in a business that has little potential. Such businesses are candidates for
divestiture.

S.V.I.M. Kadi 154

Current Strategy of leader and challenger of the bottled water

Parle-Bisleri
 Focus on untapped market.
 Repaid delivery of product.
 A replica of a simple house with a concrete roof, chimney, doors and other
paraphernalia associated with a normal house, these trucks will be taken door-
to-door in some select localities to start with. The pack size targeted at the
home segment would essentially be the 5-litre pack aggressively priced at Rs
25.
 The idea, clearly, is to have high visibility in the home segment and enter the
housewife's mindset. Bisleri is available in 40-litre, 20-litre, five-litre, two-
litre, one and 500-ml pack sizes.

 Bisleri's strategy seems to be focused on market expansion.35

Coca-Cola (kinley)
 Focus on premium segment.
 Changes in marketing for capturing market share.
 Focus on 5 Pillar strategic framework which focuses on Portfolio, People,
Planet, Partners and Performance.
 The company focuses on understanding the Indian consumer, and in using
these local insights to build powerful connects for its brands. On the back of
an effective advertising strategy, Coca-Cola has created a brand that stands
for affordability and is inalienable to the common man.

Recommending new strategy

 Strategy for Bisleri
1. Aggressive promotion of brand.
2. Invest in research and development.
3. Product differentiation.

 Kinley
• Focus on product differentiation for capturing more market share.
• Offensive strategy to build market share.

 Strategy for Aquafina and kingfisher

• Serve niche market to compete with regional player
• Grow via merger or Acquisition with regional player.

35
http://www.financialexpress.com/old/fe/daily/20001227/fst27023.html

S.V.I.M. Kadi 155

 A nine cell industry attractiveness-competitive
strength matrix

Competitive Bisleri Kinley Aquafina Kingfisher Himalayan

strength Weight Rank/score Rank/score Rank/score Rank/score Rank/score
Relative Market
share 0.20 10/2 6/1.6 3/1.2 3/1.2 2/0.8
Availability 0.30 7/2.1 8/2.4 5/1.8 8/2.7 7/2.1
Brand Image &
Reputation 0.05 10/0.5 8/0.5 6/0.4 5/0.35 8/0.4
Profitability 0.15 8/1.35 8/1.35 7/1.05 6/1.05 10/1.5
Valuable Capability 0.15 10/1.5 8/1.35 8/1.35 3/0.45 8/1.2
Heritage 0.15 10/1.5 9/1.35 8/1.2 3/0.75 7/1.05
1.00 8.80 7.75 5.85 5.05 6.65
1= Very unattractive
10=very Attractive

Industry Attractiveness Weight Rank Score

Projected growth rate 0.20 10 2
Market size 0.20 10 2
Competition 0.10 4 0.4
emerging opportunity and threats 0.12 6 0.72
Resource requirement 0.05 8 0.4
Seasonal influence 0.05 9 0.45
PEST factor 0.10 6 0.6
Industry profitability 0.13 8 1.04
Business Risk 0.05 5 0.25
1.00 7.86

S.V.I.M. Kadi 156

Interpretation:-

In box 1 where industry attractiveness and the business’s ability to compete are
relatively high which require further investment for future growth. Box 2 receives
only selective investment with an objective of maintaining current position. Box 3 is
the candidate for harvesting and divesting.

In bottled water segment all players are came under box 1 because of high growth rate
of industry so industry attractiveness increase and it put all players in category of
build and attractive for resource allocation. From above diagram we see that
Himalayan has a low market share but its competitive strength it put before Aquafina
and kingfisher. So here we can say that Aquafina and kingfisher focus on Himalayan
strategy otherwise Himalayan acquire market share of the kingfisher and Aquafina.

S.V.I.M. Kadi 157

Parle bisleri is a market leader and kinley is Follower so here both players came under
most attractive position for resource allocation. Himalayan has a strong brand image
and profitability and this factor increase the competitive strength.

From alternative portfolio model we divide different player for resource allocation
and this model more useful in diversified business. From this model we select best
profitable company for giving more resource for getting more profitability.

In bottled water industry all player came under build stage so here provide maximum
resources to get maximum profit and covered market share in the market.

S.V.I.M. Kadi 158

 KEY SUCCESS FACTOR
• Marketing & Distribution

Branding and marketing of bottled water is as essential as water for the survival of the
human body. The traditional marketing tools include site advertisement, TV and print
media advertising and brochures. This study allocates 10% of the revenue for
advertising and promotional purposes.
Apart from the traditional marketing tools, this study suggests to focus more on other
marketing magnets that include interactive marketing, interactive marketing may
include educating the general public about the importance of water and its daily
consumption requirements for human body through the participation in seminars and
in general public gatherings (e.g. College and University gatherings).
One of the marketing options is to sponsor public events like cricket matches or
hospital campaigns, distributing free brochures about water and its daily consumption,
water requirements in different age brackets. The interactive marketing may be
designed through seminars and workshops about the daily human consumption
requirements and diseases originating from the lack of pure water.
Overall marketing strategy may change with the change of target market. A market
research study is recommended to design the different dynamics of marketing before
launching the new brand.
Marketing expense has been included in the total project cost and it has been
estimated around Rs.5 million. The entrepreneur may decide to increase or decrease
the amount of marketing expense depending upon this choice of promotion activities
and type of media used. Following table gives the breakup of the marketing expense.36

36
www.bottledwater.org

S.V.I.M. Kadi 159

In the first phase of the launch of the new brand, availability will also play the key
role in attracting the customers. It is suggested that the entrepreneur decides the
availability of the product at A-class, or B-class, or C-class retail outlets or mass
availability of the product (aggressive marketing). Since, the perception of the product
is also directly related with is availability so it is suggested that the strategy for the
availability of the product be designed according to the target market and the
perception and positioning the entrepreneur is targeting.

• Pricing

The pricing strategy should be in line with the going rate market prices of the
different local brands. Since a new brand has to face a lot of competition from the
market, it is suggested that the price ceiling should not be crossed whatever price
strategy be adopted.

• Packaging differentiation

Product packaging and presentation is one of the main dynamics, which control the
flow of target customers towards the product. Packaging should be inline with the
industrial norms. Packaging may also vary with the understanding of the target
market. It is suggested that the bottles of 0.5 liter and 1.5 liter capacity should be
used. Bottles should be clear. The bottle should give a reflection of light sky blue
color, which is considered a natural symbol of the water. This color also adds a tinge
of purity. The water should give a shiny and a glossy reflection. The opening of the
bottle should be large enough to accommodate outflow and inflow of water. The
bottles should be placed in special racks and strand meant for bottled water at retail
outlets, which will be having a unique color and a unique design. The color and the
design will create a positive perception for the new brand. The wrapper of the bottle is
suggested to be on four-color printing and should have the following information in
addition to the logo of the company.

o Certificate mark of the Indian Standards & Quality Control Authority

o Water Specification

S.V.I.M. Kadi 160

 o Expiry Date (Best Before Date)
o A brief intro of the company with the address
o Website address of the company
o Brand Name / Trade Name
o Net volume in System International / Metric system
o Batch number or code number

• Transportation
In bottled water industry people purchase those product
which is easily available in market so transportation is key
activity for bottled water industry.

• Contracting with institution

All players do contract with Multiplex, Restaurant, and conference hall
and get success in capturing market for bottled water. Oxirich
contracted with ICL matches.

S.V.I.M. Kadi 161

Driving Forces
1) Impure and improper municipal water supplies
Municipal source is the main source of water supplied to the house hold.
From pass time this source becoming impure and improper. To making
food, to drink and other application of water was from the municipal
source firstly. But as time span health consciousness increase which avoids
the impure quality of municipal supplies.
2) Rising population
Rising population is in two terms that is from own country and foreign
country. Foreigner generally preferred bottled water because they are well
health conscious and after using bottled water they fill status seeker.
For own country as we had seen above population growth rate which is
increasing day by day which helps to increase the demand of the bottled
water product.
3) Education and health consciousness
As literacy rate increasing the education level increasing because of
education level increasing and the health consciousness improved among
the people. Health conscious people prefer the products which are not
hazardous to the body for example using municipal water most people
prefer bottled water which also gives feeling of status and lifestyle.

4) Scarcity of potable and wholesome water at railway and tourist places

Bottled water demand is high on the place of railway station and tourist
place. Whenever any scarcity of the potable water will occur, at this place
that will result into increase the demand of bottled water. India is the
country link with the railway and tourist places. So increase in these places
also helps in driving forces.

5) Rising aspiration among consumer on quality, style and taste with

changing lifestyle
In recent time people are adopting western culture. Quality, style and taste
with the changing life style, these are the major words which come with
the ingredients of the status symbol. As already mention quality of the

S.V.I.M. Kadi 162

 product will be preferred by the people who are health conscious and think
about to live in life style.
6) Urbanization
Urbanization is growing at faster rate. Bottled water demands for 700
thousand per day in Chennai which is called urbanized market. Also we
have 1800 bottling plant across India, among them 600 plants are located
in Tamilnadu having the high demand.
7) Others
Other includes
 Globalization
 Application of the product
 Buyer’s preference
 Living Standard
 Disposable Income
 Availability

S.V.I.M. Kadi 163

Section - E

S.V.I.M. Kadi 164

 Value Chain
To better understand the activities through which a firm develops a competitive
advantage and creates shareholder value, it is useful to separate the business system
into a series of value-generating activities referred to as the value chain. In his 1985
book Competitive Advantage, Michael Porter introduced a generic value chain model
that comprises a sequence of activities found to be common to a wide range of firms.
Porter identified primary and support activities as shown in the following diagram:

Porter's Generic Value Chain

Firm Infrastructure
Supporting HR Management
Activity Technology Development

M
A
Outboun Sales
R
Primary > Operations > d > & > Service > G
Activity Inbound Logistics Distribution
Logistics I
N

The goal of these activities is to offer the customer a level of value that exceeds the
cost of the activities, thereby resulting in a profit margin.

The primary value chain activities are:

• Inbound Logistics: the receiving and warehousing of raw materials and their
distribution to manufacturing as they are required.
• Operations: the processes of transforming inputs into finished products and
services.
• Outbound Logistics: the warehousing and distribution of finished goods.
• Marketing & Sales: the identification of customer needs and the generation of
sales.
• Service: the support of customers after the products and services are sold to
them.

S.V.I.M. Kadi 165

These primary activities are supported by:

• The infrastructure of the firm: organizational structure, control systems,

company culture, etc.
• Human resource management: employee recruiting, hiring, training,
development, and compensation.
• Technology development: technologies to support value-creating activities.
• Procurement: purchasing inputs such as materials, supplies, and equipment.

The firm's margin or profit then depends on its effectiveness in performing these
activities efficiently, so that the amount of the customer is willing to pay for the
products exceeds the cost of the activities in the value chain. It is in these activities
that a firm has the opportunity to generate superior value. A competitive advantage
may be achieved by reconfiguring the value chain to provide lower cost or better
differentiation.

Value chain for bottled water industry

In bottled water industry value chain play important role because this market is totally
monopolistic so here manufacturer maximize their profit through reducing cost or
deliver value added service at same cost for getting maximum market share and
margin on product.

S.V.I.M. Kadi 166

Value Chain Model
Labeling Material Water Sources Well, Bottle component Cap Supplier
Supplier Municipality, spring Supplier

Warehousing of
Bottle & Raw material
Water

Cap &
Value added activity Label Material
through pretreatment
Activity
Ultraviolet Light
Filtration and Operation or
Ozonation Purification

Activity
Filling Value added activity
Capping through including
Labeling & mineral and Packaging
Coding

Dispatch of Goods

Warehousing of
Finished product

Transportation

Distributor

Retailer

Customer

S.V.I.M. Kadi 167

Supplier of Raw material (Inbound logistic)

In bottled water industry raw material provider are more and nearer to production unit
so here reduce the cost of transportation of raw material and manufacturer get raw
material easily and in continuous flow. Also consider some key point in development
of inbound logistic are as under.

Criteria for selecting supplier

 Just in time inventory (manage flow not stock)
 Continuous improvement
 Required qualitative raw material
 Near and easy availability
 Stable competitive price

Water sources
• Natural water sources: protected from surface inrusion and other
environmental influences.
i. Approved protected, Monitored Natural water sources: The water for most
bottled water comes from approved, protected and monitored natural
sources such as spring or artesian wells originating from within the earth.
These groundwater sources are inspected, tested and certified to be of
sanitary quality and free from surface water influence.
• Potable Public Water Sources which are then reprocessed using a variety of
purification methods.
i. Approved Sources: Public water supply: Bottled water may also originate
from treated municipal supplies. The bottle water companies utilizing
public water supplies most often use processing methods to further
enhance the quality of the water. Place your cursor over the tabs above to
learn more about these processes.37

37
www.ibwa.org

S.V.I.M. Kadi 168

After getting water, bottle components, cap of the bottle and label material from the
supplier manufacturer store water in tank and other components in warehouse than do
some value added activity for increasing the quality of water like.

Pretreatment
a. Carbon Filtration: Activated carbon filters are used to remove undesirable
tastes and odors by absorbing substances that may be present such as
chlorine and organic compound, which essentially “stick” to the surface of
the filter.
b. Water is considered “hard” if it contains significant quantities of dissolved
calcium or magnesium in the water are removed.
c. Deionization: Deionization removes dissolves metal ions and gases, which
may be found naturally in the sources water. Deionization removes those
specific ions from water.
d. All bottles purified and make clean and safe bottle for filling purified
water for maintain quality of the water for longer period of time.

Purification: Bottled water from a public source is often purified by reverse

osmosis, distillation of the two.
e. Reverse Osmosis: Using this process, water is forced under pressure
through membranes or semi-permeable separations, which remove nearly
all dissolved minerals.
f. Distillation: this is the process in which the water is first vaporized by
heating it to its boiling point (BP=100ºC). Since dissolved minerals have
boiling points above 100ºC , the water vapor, now free of dissolved
38
minerals and other substances, is then condensed back to water.

After doing all value added activity manufacturer again store water in safe and
protected water tank for maintain quality of raw material.

38
www.ibwa.org

S.V.I.M. Kadi 169

Operation
After completion of inbound logistic manufacturer do operation activity. Here all
player produce semi finished or finished goods through latest technology for reducing
cost of wastage and low capacity utilization.

Final Processing
• Ultraviolet Light: Ultraviolet light provides a reliable, efficient and safe source
of high intensity disinfection. Ultraviolet light has no effect on pH, color, flavor
or aroma. It has no other detrimental effects on product stability, leaves no
residue and produces no harmful by-products.
• Filtration: Filtration can be used to remove contaminants and particulars such
as silt, colloids, chemicals and certain microorganisms that may be found
naturally in water. The filters that are used are changed regularly to ensure
optimal performance.
• Ozonation: Ozonation is a disinfection process using ozone gas, a form of
oxygen, instead of chlorine. Ozone is an effective water disinfectant that does
not leave a residual taste, color or odor to water.

After complete above process again water store in water tank for maintain quality and
this process increase the value of product. And this storage and distribution activity
covered under outbound logistic.

Outbound Logistic
In this activity of value chain manufacturer store and handle finished goods and than
go for packaging of products and store product in warehouse.

1) Mineral Injection: Minerals are found naturally in water, but the production of
bottled water may result in the removal of these minerals. Minerals injection is
used primarily in waters that have been purified to restore certain minerals to the
water. Examples of these minerals include calcium, magnesium of fluoride.

S.V.I.M. Kadi 170

2) Sanitary Bottling
• Bottling: FDA’s bottled water Good Manufacturing Practices (GMPs)
mandate that bottled water is bottled in sanitary, safety-sealed
containers under sanitary conditions. Materials utilized for the
container, cap and seal must be approved by FDA for food contact.
IBWA members implement a voluntary system called HACCP (Hazard
Analysis and Critical Point), which has adapted from FDA and the
U.S. department of agriculture for a science-based approach to safety
throughout the bottled water process.
• Containers: Whether it is a single-use or reusable water, all containers
are approved by FDA for food contract. Reusable container washing,
rinsing and sanitizing are carefully evaluated to comply with federal,
state and industry requirements. Open bottles in the plant are protected
from airborne contamination throughout the production process.
• Filling and Capping: Bottles, whether single-serve or cooler size, are
required to be filled and capped in a fully enclosed, positively
pressurized room with an air handling system that filters the air.
• Caps and Closures: Caps and closures are made of materials that must
comply with FDA standards and guidelines for food contract. Bottled
water, by definition, is provided to consumers in sanitary, safety-sealed
containers.
• Coding: Coding is used on bottles to provide a record of production dates
and lot numbers. This assists bottlers, distributors and retailers in product
tracking and inventory control.
• Labeling: Bottled water products must adhere to arrange of FDA labeling
standards, including the bottled water standards of Identity, which
establish uniform terms to define bottled water types as well as applicable
labeling standards under the Nutrition Labeling Education Act (NLEA). A
bottled water product bearing a particular statement of identity must meet
the particular requirements of the FDA standards. Definitions include:
drinking water, artesian water, groundwater distilled, deionized water,
mineral water, purified water, sparkling bottled water, spring water, sterile

S.V.I.M. Kadi 171

 water and well water. If bottled water is misbranded, it is subjected to
recall. Labels must include the name of the manufacturer, packer of
distributor.
Other labeling requirements should be as per PFA Rules and Packaged Commodities
Rules as prescribed in IS: 14543 – 1998 (Specification for Packaged Drinking Water).

1. Packaging Requirements
It is well known that drinking water should be packed in clean, colorless, odourless,
clear, tamperproof containers, which are hygienically safe. Much of the water is
packaged in similar bottles as carbonated soft drinks, and would, therefore, carry
many of the same requirements.
2. Color and Clarity
Clarity is one of the most important requirements and is the main reason why clear
bottles of plastics are used. A resin with higher levels of co-polymer adds to the
clarity. As regards the light blue color in the bottles, this is permissible for one time
use bottles. However in India, the BIS (Bureau of India Standards) have prescribed
colorless bottles for multi trip/reusable containers.

Since currently almost all the bottlers use blue colored containers, studies have
commenced at IIP to establish whether blue color helps to reduce the UV effect and
the percentage of blue color that could be considered to be added without affecting the
clarity of the bottle.
3. Purity
Because water is a flavorless product, using a plastic that remains tasteless and
odorless is imperative.
4. Mandatory Certification
To prevent adulteration, the quality of the bottle and its sealing drew great attention
and concern. The standardization of the quality of the water and the bottles was not
thought of earlier. There was a concern whether mushrooming brands in packaged
drinking water would really ensure quality and safety. The provisions of mandatory
BIS certification and that of Prevention of Food Adulteration Act (PFA) have brought
in assurance to the consumers that packaged drinking water is trustworthy.

S.V.I.M. Kadi 172

The Indian Standard IS: 14543 – 1998 prescribes the quality and safety requirements
of packaged drinking water.
5. Plastic Package Types
As the market has evolved, so too has its packaging mix. Bottles may be the favourite
container for packaging water, but glass rarely features as the first choice today. Glass
together with cans and cartons have a diminished share. Glass retains a high profile in
outlets where the water is for Consumption on the premises (hotels, restaurants, cafes)
remaining particularly strong in Central and South America and Europe, especially
Germany.

Plastics are versatile materials and are in many cases capable of matching or
surpassing the characteristics of other types of packages. They do not corrode, are
hygienic lightweight and often provide opportunities for reducing the weight of the
packages used.
A variety of polymers are available which can be used for packaging of drinking
water.

6. Polyethylene
Low-density polyethylene film is the most important group of plastics used in
packaging drinking water. Polyolefin’s also have the highest calorific value of all
constituents in the packaging waste stream and are, therefore, prime candidates for
disposal through incineration with energy recovery.

7. Polyethylene Terephthalate (PET)

PET is the most extensively recycled plastic of the present time. It is easier to collect
than other plastics. It has a high intrinsic value, is economic to recycle even with
existing collection systems and there are well-developed markets for its recycling,
such as carpet fibres and fibre film. The important feature of used PET is its ability to
be converted 25-litre HDPE Container 20 litre PET Container

Chemically to the monomer from which, It was produced using hydrolysis or

methonolysis. The US Food & Drug Administration for food-packaging applications

S.V.I.M. Kadi 173

has approved PET produced by chemical recovery of this sort. For packaged drinking
water PET bottles are used in 50ml to 20 litres capacity.

Perrier has developed a new container that incorporates a layer of nylon sandwiched
between layers of PET to comply with the requirement for a standard 12 months
shelf-life mineral water.

8. Polypropylene (PP)
Polypropylene (random clarified co-polymer) is widely used for food contact
applications throughout the world and enjoys favorable status with food and
regulatory agencies. PP containers/cups with peelable lids are used for packaging of
drinking water in 100, 200ml. capacities with suitable lids for closures.

9. Poly Vinyl Chloride (PVC)

Earlier, the most commonly used package for mineral water was stretch blow
moulded bottle of PVC, as PVC is rigid, clear and has adequate impact strength.
Compared to other polymers, PVC requires lower amount of energy to produce. If
collected separately, it can be readily recycled. The recycled PVC is sandwiched
between inner & outer layers of virgin polymer in co-extruded PVC pipes. The major
concern for safe use of PVC for non-toxic and food contact applications is the residual
monomer level in the resin. The FDA in USA and regulatory agencies have specified
the monomer levels at 5ppm in PVC resin. PVC containers in capacities of 100, 200,
250 and 1000ml are used for packaged drinking water.

10.Polycarbonate (PC)
Polycarbonate can be processed into useful end products by any of the usual
processing techniques like extrusion, blow moulding, injection moulding etc.
Polycarbonate containers are popularly used for muti-trip application for mineral
water containers of 15-20 litres.

11.Polyethylene Naphlthate (PEN)

This is a high performance resin and the containers made out of this resin are used for
refillable, returnable mineral water.

S.V.I.M. Kadi 174

 12.High Impact Polystyrene (HIPS)
HIPS (High Impact Polystyrene) containers cater to the 200ml mineral water market.
These containers are provided with heat sealable peel able lids.
Processing of Water for Bottling
In India, the quality of drinking water is very poor in comparison to other countries.
Treatment of water is required for purification. To produce high quality drinking
water as prescribed by the World Health Organisation (WHO), conventional
processing methods like coagulation, flocculation, sedimentation, ion exchange,
filtration and oxidation etc. are not sufficient. Membrane processes have advantages
over other treatment processes. Micro-filtration and ultra-filtration are said to be very
useful in removing micro-organisms. Reverse osmosis membranes are used to remove
various contaminants found in drinking water. A combination of reverse osmosis and
de-ionization can be used to produce high quality water.

After getting purified water from the operation again manufacturer add value through
bottling, capping, labeling and coding, for this activity collect raw material of cap and
label from warehousing and than dispatch finished goods for warehousing and store
finished product.

Warehousing
After producing finished product company store in warehouse for maintain market
demand flow. And on basis of stock operation department produce finished goods and
maintain demand and supply. When any distributors put order then transport finished
goods through any intermediary and provide finished product.

Distribution
After warehousing finished product company play a role of distribution of product in
this activity they play a role of Delivery reliability, Stock management by location and
Re logistic of PET.

In this activity try to increase sales via increase awareness in market about product
and provide product as per retailer or dealer requirement. And also maintain
relationship with retailer for long term profitability.

S.V.I.M. Kadi 175

Customer Services

Here industry play a role of service provider to their customer like Testing,
Communications and Information systems for maintain relationship with customer or
user of the product. Also providing replacement of defected bottled to mall and
distributors.

Supporting Activity

Support Activities

The primary value chain activities described above are facilitated by support
activities. Porter identified four generic categories of support activities, the details of
which are industry-specific.

• Technology Development - includes research and development, process

automation, and other technology development used to support the value-chain
activities.
• Human Resource Management - the activities associated with recruiting,
development, and compensation of employees.
• Firm Infrastructure - includes activities such as finance, legal, quality
management, etc.

Support activities often are viewed as "overhead", but some firms successfully have
used them to develop a competitive advantage, for example, to develop a cost
advantage through innovative management of information systems.

1)R&D Activity
Testing

S.V.I.M. Kadi 176

To help ensure bottled water safety and quality, all bottles follow sources and finished
product testing and monitoring requirements, which are mandated by FDA, the states
and IBWA throughout the entire process. The water is routinely monitored and tested
for:
• Organics, such as:
o Pesticides
o Herbicides
o Volatile organic compounds
• Inorganic such as lead, copper, zinc, chloride, and minerals
• Microbiological
• Radiological
• Physical properties

Primary activity is dependent on supportive activity because all measures, process and
operation not possible without supportive activity of value chain.

 Continuous monitoring for Reduction in wastage water (Operation)

 Research on Eco-friendly PET bottle (Supplier)
Above all test measure at every level of the value chain

2) General Administration
General administration also monitored all activity of the value chain. And for
this purpose company maintain such department like finance and Marketing and this
department play role to support all primary activity of the value chain here we
develop relation of both department.

Finance department continuously focus on resource allocation to the all

activity and on basis of profitability finance department give resource for
development. Finance department define all activity and its cost driver and on that
basis find out projected financial requirement for each activity.

S.V.I.M. Kadi 177

 Purchase Department maintain activity of raw material procurement and
maintain long term contract with supplier. Also find out best and cheap raw material
from market for reducing cost of raw material.

Marketing Department support distribution activity, and increase sales of the

product and market awareness. Also Marketing Department support distribution
channel and sales. Marketing Department continuously measure market demand and
preference of the customer so it helpful for development of new flavored bottled
water.

 Recycle of PET bottle (Norms)

 Collaborate with raw material supplier (Supplier)

3) Human Resources management

H.R Department is a part of general administration but it plays a major role
before starting any primary activity first H.R. Department do activity of recruitment.
For purchase of goods H.R. department select purchase manager for maintaining
routine activity collect labor and for selling product choose marketing manager and
also define cost of all employee of the organization. This department finds out
requirement of skilled or unskilled labor and on that basis hires people and reduce
cost of over employee.
This department is more useful in non technology industry because in that type
of industry labor requirement is more as compared to technology upgraded industry.
But without selection of expert and experience person for doing work firm not
perform will so H.R. Department is highly support all value chain activity of the
industry firm.

 Hiring expert and experience person (Distribution)

 Relationship with supplier (Distribution)

S.V.I.M. Kadi 178

From above graph we are differentiate value added and cost added activity in bottled
water industry. Value added means add some value through pretreatment, purification,
packaging and distribution service of the bottled water. Cost added activity means add
extra cost in product like raw material, transportation and warehousing of goods. In
value chain Activity Company differentiate product through value added activity and
get benefit of low price product through cutting cost in cost added activity.

S.V.I.M. Kadi 179

 OT Analysis
Opportunity:
• Untapped Market.
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. Bottled water
market focuses only on urban area but not focus on rural area because in past
rural area people not that much conscious about health and safety also the
distribution cost was high. Today more than 50% market covered in rural area
through pouches so here a big opportunity for bottled water player. 39
• Change in lifestyle.
Bottled water shows the status among society and this reason increase the
consumption of bottled water product. Also rich people are increase demand of
bottled water in market.40

• Increasing Population Growth and literacy rate.

India is a second largest in population so it increases the demand of all
products also people are literate so they all drink safe water so here Bottled
water player grabs this market. (Source:- census.com)

• Awareness on health.
People are more conscious about their health and safety so they not use tap
water or any other water which is available without any purification process.
This factor affects the total demand of bottled water market in India.

• Commercialization.
Due to increase in urbanization commercialization also increasing like offices,
meeting places, conference halls and business parties this all are increase
consumption of bottled water in India so all factor create opportunity for
bottled water player.

39
www.waterstocks.com
40
World Consumer Lifestyles Databook

S.V.I.M. Kadi 180

 • Increasing market size of bottled water among beverages.

The above graph shows bottled water among beverages category and it increase
nearer to 90% so here big opportunity for bottled water player to grabs that market.
(Source:-Beverages marketing corporation)

• Tourism and tourist places.

(Source:- http://assets.cambridge.org )
Indian government focus on tourism places and also invite tourist of foreign
and all foreign people use bottled water, government ban on pouches water for
reducing pollution of plastic it increases the market of bottled water. Above all
factor increase tourist.
• Market Growth
In 2011, the market is forecast to have a value of $86,421.2 million, an
increase of 41.8% since 2006 and the market is forecast to have a volume of
174,286.6 million liters, an increase of 51% since 2006.41

41
http://www.bottledwater.org/public/BWFactsHome_main.htm

S.V.I.M. Kadi 181

 • Urbanization.
The fact that most of this population growth will be accounted for by urban
areas will add to the existing water crisis in the cities. By 2050, 48% to 61% of
India's population will be living in urban areas.42

• Regulatory forms.
80% market is unorganized so when government increase or make strict
regulatory norms than it reduce the competition from the small and regional
player in market. But it affect negatively to the organization.

• Extraordinary application of product.

Before few year people use tap water in cooking but now people use bottled
water or purified water in cooking it increase the use of bottled water.

42

S.V.I.M. Kadi 182

Threats
• Government interferences.
The Govt. has also got into the action by imposing stringent legislations
regarding wastewater treatment. There is also a compulsory requirement of
Environment Clearances from Pollution Control Boards at the Centre and the
states. The recent Supreme Court directive to move polluting units out of
Delhi is also likely to act as an impetus to future sales of water treatment
equipment. Also at the same time, many existing treatment plants would need
to be replaced or upgraded to meet with more stringent standards.

o Pollution norms.
Government and NGO try to stop pollution and define criteria for pollution. In
bottled water industry major pollution is bottle & water. When the government
make strict norm then it is threats for producer to maintain all norm.
(Source:-www.bottledwater.org)
• Substitution.
In beverages market many substitute products available and for specially
bottled water many substitute are available at lower rate so it is a major threats
for bottled water player.43

• Ban on long term water sources.

The majority of the bottling plants - whether they produce bottled water or soft
drinks - are dependent on groundwater. They create huge water stress in the
areas where they operate because groundwater is also the main source - in
most places the only source - of drinking water in India. This has created huge
conflict between the community and the bottling plants.

• New entry & Regional Brand

The bottled water market is growing at the rate of 55% per annum and is
expected to cross Rs 1000 crores within a few years. This segment is one of

43
Ficci report

S.V.I.M. Kadi 183

 the most developed ones in India. Bottled water market has low entry barriers
when compared to other businesses it increase the threats of new entry.
It has been estimated that there are around 200 brands of bottled water in
India, of which 80% are local brands.44

44
http://www.naukrihub.com/india/fmcg/overview/bottled-water

S.V.I.M. Kadi 184

 Conclusion
From the analysis of in depth study in bottled water industries. We come to conclude
that it is very lucrative business which growth rate is about to 40% and the market
size will rise to Rs.2200crore in the year 2010. Distribution becomes major challenges
for this industry. Other driving forces are as under.
o Improve & improper quality supply
o Demographical changes
o Marketing changes help to build a good business practices,
sticky pricing and switching also play an major role to service
among different players.

Culture which mainly affect to customer that how to solve the problem providing
product qualitative as lifestyle, taste & preference changes. Health consciousness and
education level is also improving the product demand in market. Also in this industry
all buyers are fragmented and it creates stuff competition among all players. In this
industry 80% players are regional and it creates challenge for organized player.

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