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Packaged Drinking Water

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Introduction

Phenomenal increase in demand for bottled water from
just 2.0 mn cases in 1990-91 to 76 mn cases in 2004-05
Market growth rate of more than 20% a year
Annual revenues of more than Rs 12 billion
More than 180 brands in the unorganized sector.
Per capita consumption (per year) of bottled water
India - less than half a litre
US - 45 litres
France - 111 litres
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Demand Drivers

Tourism
Emergence of BPO and call centers
Growth in food industry
Aquifer depletion
Water pollution
Awareness and standard of living
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Segmentation
Customers
Individual buyer
Bulk buyer
Channel
On-trade
Off-trade
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Trends
Manufacturing and packaging
New SKUs such as cups
Jumbo home pack with spout
Core consumers
Shift from 1 litre bottles to 20 litre pack
Consolidation and expansion
Coca Colas purchase of Good Water
Parle investing Rs 2600 million in a new facility
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Trends
Market Segmentation Share (%)
0
10
20
30
40
50
60
70
80
Domestic Institutional
Segment
%
Market Segmentation
Share (%)
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Market Growth
Demand : Past & Future mn cases
0
50
100
150
200
250
300
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0
-
9
1
1
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9
2
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3
1
9
9
4
-
9
5
1
9
9
6
-
9
7
1
9
9
8
-
9
9
2
0
0
0
-
0
1
2
0
0
2
-
0
3
2
0
0
4
-
0
5
2
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6
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7
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9
2
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1
4
-
1
5
Year
C
a
s
e
s

(
m
n
.
)
Demand : Past
& Future mn
cases
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Competitive Scenario
Brand Company 2001 2002 2003 2004
Kinley Coca-Cola India Pvt Ltd 30.5 32.0 37.5 37.0
Bisleri Parle Bisleri Ltd 39.0 31.0 31.0 30.5
Aquafina
PepsiCo India Holdings
Pvt Ltd
13.5 13.0 15.5 15.0
Bailley Parle Agro Pvt Ltd 6.0 6.0 7.0 7.5
Private Label 1.0 2.0 2.0 2.0
Others 10.0 16.0 7.0 8.0
Total 100.0 100.0 100.0 100.0
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Coca-Colas Kinley
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Business Model

Contract packing deals struck throughout the country
Large number of takeovers in the large metros to
increase capacity
Coca-Cola has 27 plants of which 8 are 100% owned
by CCI, 5 are with franchisees and 14 are of co-
packers
Riding on the national Coca-Cola distribution
network
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Competitive Positioning


Kinleys slogan, boond boond mein vishwas

Capitalized on the unreliability of ordinary piped
drinking water

Targeted towards families and homes
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Parles Bisleri
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Business Model
Parle Bisleri had 25 bottling units, a fleet of 2000
vehicles and 120,000 retail outlets spread across the
country.
Dual distribution strategy - penetrating smaller,
interior markets in rural India, and pushing the brand
in newer territories and roadside stalls in the metros.
Within the institutional segment, hotels, railway
stations and government offices are being tapped with
increased aggression now.
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Competitive Positioning
Does not presently have the ability to compete against the
multinationals on distribution or advertising.
Instead developing the 20 litre bulk water business
Tender-driven supply deals, which guarantee a certain volume
off-take but do not necessarily deliver much value.
Three strategies being followed:
Strength distribution in rural areas and explore new territories
Competitive pricing
Innovative packaging
Shifted from its initial Pure and Safe positioning to a
new Play Safe positioning.

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PepsiCos Aquafina
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Business Model

Uses its distribution strength in carbonated brands to
push its fruit juice brands as well as bottled water via
the on-trade channel.

Exclusive contracts with many outlets and clubs
throughout the country.
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Competitive Positioning


Pepsi is India's highest selling brand of carbonates, as
well as the most popular soft drink overall.

Strongly identified with energy and sports.
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Parle Agros Bailley
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Business Model
Bailleys price was higher than its competitors because it
brings its products from outside the city, for which it has
to pay an entry tax, the octroi.
It has set up a PET plant in Silvassa, with an investment
of Rs120 million.
A new 30 mm exclusive neck for the PET bottles, which cannot
easily be duplicated, in an effort to fight the counterfeit trade.
It moved into bulk sales of 5 litres and 20 litres, with its
biggest sales areas being water-starved cities such as
Chennai in the South.
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Competitive Positioning
The company re-launched Bailley in smaller bottles
and pouches.
Arrangements with Jet Airways to supply 200 ml bottles
for the airline's in-flight customers.
A 330 ml bottle, priced at Rs 5, is targeted at
schoolchildren.
A pouch of 200 ml priced at Re 1 is intended to introduce
bottled water to the masses.
A new value-added mineral water brand called
Bailley Plus is to be launched soon.
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New Entrants
Kingfisher from United Breweries Ltd.

McDowells No 1 mineral water from McDowell &
Co Ltd.

Indian Railway Catering and Tourism Corporation
(IRCTC), a division of Indian railways, expanded the
network of its own brand of bottled water, Rail Neer.
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A Case Study
Brands launched
Premium upmarket brands
- The internationally renowned Perrier
- The sparkling mineral water brand, San Pellegrino
Pure Life, the mass market bottled water brand
- Initially positioned on the purity plank and targeted at family
- Modified later and repositioned on the stay active and fitness
platform
- Priced at Rs 12 (higher than Kinley and Aquafina)
Portfolio taken off market in 2003 Why?
Inadequate distribution infrastructure
Poor returns due to low margins
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Critical Success Factors
Sales and distribution
No. of channels
Influence over channel members
Cost control
Value proposition
Marketing budgets
Scale and size
Economies of scale
Bargaining power
Innovative packaging
Quality standards of product

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No, Break now!