Competitive study of Bottled Water Market

Competitive study of Bottled Water Market
SIMSR MMS 2008-10 “A” 01-26-001

Date of Submission 08th September, 2008

K. J. Somaiya Institute of Management Studies & Research, Vidyanagar, Vidyavihar, Mumbai - 400077

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Competitive study of Bottled Water Market

ACKNOWLEDGEMENTS
I would like to thank Prof. Bhagyalakshmi for giving me an opportunity to work upon this project. A task of this nature would have been incomplete without the active support of two Kirana stores vendors in Mulund – Karsan Bhai (Apna Ghar) and Rajesh Bhai (Rajesh General Stores). And finally my classmates, discussions with whom have helped me in deciding the flow of the project.

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Competitive study of Bottled Water Market

INDEX
Sr.No 1 2 3 Executive summary Introduction History of bottled water Industry International Scenario Indian Scenario Current Scenario 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Big players keen to get into Bottled Water Industry Rules and regulations pertaining to bottled water industry Labelling Standards Market size by volume and value Market Categorisation Market segmentation Retail outlets Sales trends Challenges faced by bottled water marketer SWOT Analysis Brand-wise details Packaged drinking Bottled Water Parle Bisleri Pvt. Ltd. Kinley Aquafina Natural Mineral Water - Himalayan Observations Bibliography Topic Page no. 03 04 05 05 05 06 09 10 10 11 11 11 12 13 13 15 17 18 18 22 25 28 32 33

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Competitive study of Bottled Water Market

EXECUTIVE SUMMARY

While the unimaginable growth rates of more than 40% in the Bottled Water Industry can be explained due to huge untapped unorganized market and more than 200 players in the field, the present growth rate of 25-30% is sustainable for another 5-6 years.

The market size of bottled water too is expected to surpass the size of soft drinks market in near future. The next in queue seems to be HLL, which too has identified the bottled water as a growth area for future. The company is presently looking or some suitable brand for acquisition. The existing players too are set to expand their distribution network to have their presence across the country.

The market is also expected to undergo a major consolidation phase. As one of the major factors that are important for success in the market is the distribution network, the players with deep pockets are expected to go for acquisition of existing small regional players to spread their network across the country. Though Coke and Pepsi have both, well established distribution network as well as bottling & manufacturing plants, they seem to be at an advantage but players like HLL with strong financial muscle can easily turn the tables in their favour through acquisition route. It is expected that the market would continue to grow at a healthy rate of 2530% for few years from now and the market size too, is expected to increase from Rs.1600cr to Rs. 12,364cr by 2010.

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Competitive study of Bottled Water Market

INTRODUCTION
Water forms an essential part of every living 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 in 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 6 billion (growing at 2-3% annually), the business opportunity is humongous and the potential is largely untapped. 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. These companies are selling plain tap water under the name of mineral water and are be-fooling consumers. The situation has got aggravated by lack of awareness among common people about mineral water and also due to lack of initiatives on part of the government both on count of setting stringent norms as well as on taking action against non-compliers. In fact one of the major factor for flourishing of the sector is the public fear that water supplied by civic bodies is impure.

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Competitive study of Bottled Water Market

HISTORY OF BOTTLED WATER

International scenario:
The tradition of bottled water is not very old. Even in western countries the practice of bottled drinking water started in 1950s. The trend of having mineral water gained grounds in the market.

Since ancient time people have used water from mineral springs, 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 concept of bottled water has been quite prevalent in western countries due to greater health consciousness and higher awareness about health and hygiene. In United States, the bottled water industry is regulated on four levels: federal (by the U.S. Food and Drug Administration as a food product), state, industry association, and individual company. EPA (Environment Protection Agency) regulates public water systems. FDA regulates bottled water that crosses state lines.

Indian scenario:
In 1967 Bisleri set up a bottling plant for manufacturing and marketing its mineral water but failed. The brand was later sold off to Parle in 1968-69. Mineral water market had its seeding as early as 1968-69 when Parle Group acquired the Bisleri brand from 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 in bottled form was not accepted by the Indian public. The market remained dormant for quite long (for a period of 20 years or so). The market throughout 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 MMS –‘A’ Roll No.: 01-26-001 Page 5

Competitive study of Bottled Water Market majors, sell off of local soft drink brands of Campa, Thumps 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. By this time with exposure of media and exposure to international life styles, deteriorating levels of potable water, increase in a number of water borne cases, increase 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 operators have entered it to milch it.

CURRENT SCENARIO
There's no questioning the existence of a market for water: the typical human needs between a litre and two a day; India's 1 billion plus population needs between 1 billion and 2 billion litres a day; even if the number crunching is restricted to the country's 100-odd million consuming classes, the result is a staggering 100-200 million litres a day, or 36.5-73 billion litres a year. In money terms, at Rs.10 a litre, the potential market could be worth between Rs 36,500 and Rs 73,000 crore. The packaged drinking water market in India is huge and growing. On account of the dominant presence of unorganised regional players in the market, estimates for the actual size of this segment vary. However, it is believed that: • • • • • • The domestic bottled water industry in size is: Rs 1,500 to Rs 1,800 crore Growth Rate: 25-30% per annum (Ahead of the growth rate of 7.6% reported for global market as a whole in 2006) Increase in the domestic demand: from 2mn cases in 1990 to an estimated 68mn cases by 2006 India: estimated to be the 10th largest bottled water consumer in the world Brands: more than 1800 Key Brands: Bisleri (Parle) Kinley (Coca-Cola), Aquafina (Pepsi Foods), Bailley (Parle), Perrier(Nestle), MMS –‘A’ Roll No.: 01-26-001 Bailley (Parle), Oxyrich (Manikchand), Himalayan(TATA Enterprise), Evian(Danone) Sumeru, Brook etc. Page 6

Competitive study of Bottled Water Market

Western region - the largest market
The western region, that is Maharashtra, Gujarat and Goa, accounts for a large chunk of around 35-40% of the overall domestic market. Key players in the western region such as the Manikchand Group, Coca-Cola India are keenly contemplating organic and inorganic growth strategies, launch of new brands, venturing into newer segments and so on. Companies in the region are using a combination of various strategies to tap business opportunities such as tie-ups with cinema halls, retail outlets, hotels, hospitals, super markets, institutions and other distribution channels, which abound in the western region of the country. Managing logistics is at the core for the success of bottled water manufacturers. Indeed, groups like Amul India are deliberating using its existing retail network to market and distribute its bottled water. This region is also poised to make a notable contribution to the great Indian bottled water growth story in terms of taking lead in launching water variants and newer sub-segments like mineral water, spring water, flavored water and so on.

Emerging prospects
The water variants segment is perceived as the area in which much of the action will take place in future. This emerging segment contributes around 10% to the bottled water market at present and currently, Mount Everest Mineral Water Company (brand Himalaya), with its key market in the western region, is the dominant player, with a market share of around 75% in the spring water segment. Many other companies like Parle, PepsiCo, etc. are also toying with the idea of launching flavored water that would directly compete with carbonated drinks.

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Competitive study of Bottled Water Market

BIG PLAYERS KEEN TO GET INTO BOTTLED WATER
Hindustan Lever (HLL), the consumer goods giant, has initiated plans to enter this sector. The company is considering whether to set up its own facilities for bottled water or go in for an acquisition. Nestle India entered this market with the launch of its brand `Pure Life' in New Delhi. It plans to grab a 50% market share in the next two years and emerge as a strong player. The company has not ruled out acquiring existing brands. The product will be available in other cities as well soon. The water is bottled at Nestlé’s new plant at Samalkha in Haryana. Nestle has already launched two of its global premium mineral water brands `Perrier' and `San Pellegrino' which are targeted at niche markets.

Apollinaris, a natural sparkling mineral water brand, has been introduced close on the heels of Nestle coming out with its sparkling water brands - Perrier and San Pellegrino. The product is being imported and distributed by the Mumbai based company, Veekay Food & Beverages. It is now available at restricted retail outlets in Mumbai and Delhi and a separate sub-brand is simultaneously being launched to take care of institutional sales.

It is also being launched under the sub-brand of Big Apple and Lemon. But the product is in a different price bracket altogether with the 750 ml Apollinaris Big Apple pegged at Rs.99 and the one litre Apollinaris Classic sparkling water at Rs.90.

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Competitive study of Bottled Water Market

TYPES OF BOTTLED WATER
1. Artesian well water/ Bottled 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. Another name for bottled water. Accordingly, drinking water is water that is sold for human consumption in sanitary containers and contains no added sweeteners or chemical additives (other than flavors, extracts or essences). It must be calorie-free and sugar-free. Flavors, extracts or essences may be added to drinking water, but they must comprise less than onepercent weight of the final product or the product will be considered a soft drink.

2. 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.

3. Purified water: Water that has been produced by distillation, deionization, reverse osmosis or other suitable processes can 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, "de-ionized water" if the water is produced by deionization, or "reverse osmosis water" if the process used is reverse osmosis.

4. Sparkling water: Water that after treatment and possible replacement with carbon dioxide contains the same amount of carbon dioxide that it had at emergence from the source.

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Competitive study of Bottled Water Market

RULES AND REGULATIONS PERTAINING TO BOTTLED WATER
The Bureau of Indian Standards (BIS) has just recently got involved in the process. In September 2000, the Government of India made it mandatory for all bottled water companies to get an ISI mark, including imported bottled water brands like Evian and Perrier. The Ministry of Health and Family Welfare had set a deadline of Mar 29, 2001 for complying with the new norms.

LABELLING STANDARDS

STANDARDS PERTAINING TO LABELING OF A PRODUCT IN THE INDUSTRY: • • • • • • • • • • • Label should have consumer brand name Label should have the name of the product category Label should have name and address of the manufacturer Label should have net weight or volume Label should have the batch number Label should have the name of source or place of origin of the product Label should have the date of packaging Label should have the date of expiry Label should have direction for storage Label should have treatment for disinfections Label should have the license or certification from the concerned authority.

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Competitive study of Bottled Water Market

MARKET SIZE BY VOLUME AND VALUE
The market size of Packaged Drinking Bottled water is around 1600 crore, and Mumbai market constitute around 10% which is 100 crores. Market has grown by around 500 crores in the last few years. Current growth rate estimated is 25%, which is one of the highest of all industries.

MARKET CATEGORISATION
The market of packaged drinking water is categorized as follows: Theatres / cinema halls/ multiplexes Caterers Clubs, Gymkhanas .In-flight kitchens. Corporates Picnic spots Hotels, Resort College canteens. General Stores etc.

MARKET SEGMENTATION
The bottled water market is segmented according to the type of consumers: • Foreign Tourists: Foreign tourists have been the main consumers of the bottled water as they face a lot of digestion problems due to different food habits. • Domestic Tourists: Domestic tourists have switched to mineral water mainly because of safety and hygiene factors. • Fashion Conscious: Like soft drinks, drinking mineral water is also considered fashionable by some people. The bottled water consumer is mainly in the age group of 20-35 years and is an educated middle class person. This is also the segment of fruit MMS –‘A’ Roll No.: 01-26-001 drinks, which have usually been positioned as fun and health drink for young Page 11

Competitive study of Bottled Water Market adults.

The bottled water market is also segmented along pack sizes: •One litre bottle: It is meant to spell safety and security for consumers. It is positioned on a prestige platform for the segment who like to make a fashion statement by drinking mineral water. This segment gets the maximum sales. •500ml bottle: This size has been introduced in the market to target the individual and local travelers. •PET bottles: The size of the PET bottles varies from 10 to 20 litres. These are mainly for institutional sales (Wedding parties, Hotels, Corporates, etc.)

Retail Outlets There are above 5mn retail outlets in India Classification Grocery & General Store Departmental Stores Cold Drink House Hotels & Restaurants Beer Bars Pan Bidi Shops Others Bottled water sales in % 40 03 02 05 02 28 20

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SALES TREND

As we can see from the diagram above that most of the sales of Bottled water comes in the summer season. Therefore, the right time to launch such type of product and promote it intensively is the summer season. In monsoon time also a good response can be generated because there are people who are very much conscious of their health and this makes them to go for packaged water. Therefore, the sales are good in rainy season. In winter season the sales are very low because of climatic condition MMS –‘A’ Roll No.: 01-26-001 Page 13

Competitive study of Bottled Water Market

CHALLENGES FACED BY BOTLED WATER MARKETER
1.To understand consumer habits and practices: • • • • Consumers are growing more health conscious and are more careful of their drinking habits. Brand loyalty is very low as all the products taste the same so they can buy just any product which is on the shelf, same as that of soft drinks and fruit beverages. Availability in the chilled form and brand awareness plays a crucial role in purchase decisions. While there is no aversion to consumption of mineral water by any age group, this product is mainly consumed by the people in the age group of 20-35 years who have less attraction of soft drinks or other synthetic drinks whereas youngsters look in for soft drinks and fruit beverages to quench their thirst. • • • Visibility is another factor that should be taken care of by the companies as consumers are not very brand loyal and consume whatever is in front of them Water is perceived to be a freely available resource. Hence customers will have a mental block in paying for drinking water The market is mostly restricted in terms of usage situations. Most of us buy mineral water only while traveling. (ofcourse in places where pure water is unavailable, even households buy mineral water) Also, the following things should be taken into consideration: • • • Water is a commodity. Hence to brand it and sell it is in itself a herculean task Between brands, to differentiate is not easy The market is price sensitive.

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Competitive study of Bottled Water Market WHY PEOPLE DRINK BOTTLED WATER?

Source: American Water Works Association Research Foundation, Consumer Attitude Survey on Water Quality Issues

SWOT ANALYSIS OF BOTTLED WATER INDUSTRY
STRENGTHS • • • The industry is growing @ 25% annually Promotional strategies adopted by the players have been highly successful Packaging material is easly available in the industry

WEAKNESSES • • • • • Rural population is not using the packaged water Not very economical – differential pricing is practiced by retailers and multiplexes Quality is not properly maintained There have been cases in the past where seal is tampered High level of pesticides have been found in bottled water

OPPORTUNITIES

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Competitive study of Bottled Water Market • • • • • • • • • • Country has witnessed people falling prey to various water-borne diseases and hence the consumption of bottled water is increasing Literacy rate is growing and hence the awareness of safe drinking water to avoid the diseases Fear in the minds of people against using tap water has been the primary reason for the increase in the growth rate in this industry. The packaged water business has shown robust signs of growth as more and more consumers have become increasingly hygiene-conscious Bad quality of municipal tap water Huge population & untapped market Many tourists visit India People living in metros have started preferring bottled water in restaurants too, if it is not priced too high then its market price The prices of soft drinks have, in fact, doubled in the last ten years and this has happened because the price of concentrates has shot up during this period With water scarcity in several cities, even households are demanding bottled water

THREATS • • Many substitutes available like fruit juices, soft drinks, branded water filters etc. Too many players entering will dilute the market & the profit margin.

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Competitive study of Bottled Water Market

BRAND WISE DETAILS
Brand wise market share:

The ORG-MARG survey conducted recently shows that the market leader Bisleri is having 40% market share followed by Kinley, Aquafina, Himalayan and others with 30%, 11%, 5% and 14% respectively. One thing is very clear that the market leader is Bisleri with Kinley, Aquafina, and Himalayan are the trailers, and now with Manikchand into mineral water, the competition is becoming tough.

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Competitive study of Bottled Water Market

PACKAGED DRINKING BOTTLED WATER

Company: Parle Bisleri Private Limited. Brand: Bisleri
In 1969, When Ramesh J. Chauhan, Chairman of Bisleri International, bought the Bisleri brand from an Italian entrepreneur, the last thing on his mind was bottling water and selling it. Chauhan was on the hunt for a branded soda (carbonated water) to complete his portfolio. Signore Felice Bisleri, who created the eponymous brand in 1965, introduced the concept of bottled water to India in the same year. Chauhan turned the spotlight squarely on bottled water only in 1993, after selling his soft drinks stable to Coca-Cola. To be sure, Chauhan can take credit for creating a category from scratch, which is today estimated to have a market size of Rs.1600 crore (just the organised sector). In the process, he has succeeded in making Bisleri a generic name for bottled water; he controls 40% of the market in volume terms; owns a brand that consultants have valued at Rs 3,000crore; and is growing at 35-40%annually, faster than the industry rate of 25% • • • • • • • • • • • Origin: Italian entrepreneur Felice Bisleri brings the bottled water brand to India in 1965 Sold earlier: In glass bottles, in two variants: Bubbly and Still The Chauhan factor: In 1969, Chauhan buys the brand (for its club soda) Big break: In 1993, when Bisleri was sold in half-litre packages for Rs.5 Big gamble: A foray into transportation. It worked. Today, Chauhan has some 2,000 trucks nationwide Annual growth rate of Bisleri: 35-40 % Market Share: 40% Bottles sold per day: 15mm Number of retail outlets covered: 3,15,000 Exclusive distributors: 3,400 Number of factories: 54, will have another 30-32 more by March 2010 Page 18

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Competitive study of Bottled Water Market

• •

New variants: Bisleri Mountain Water, Bisleri Mountain Water from the Himalayas. Contemplating launch of enhanced water, vitamin water and flavoured water Advantage: Focus is water unlike its competitors like Coca-Cola, Pepsi, Kingfisher, Manikchand for whom water is just another business and not the flagship one.

Marketing Mix:
Product:

• •

Bisleri was launched in Mumbai, in glass bottles, in two variants: Bubbly and Still. Now, the product comes in different packs starting from 250ml cups, 250ml bottles, 500ml, 1L, 1.5L, 2L which are the non-returnable packs & 5L, 20L which are the returnable packs.

• •

The home pack was made more user-friendly by introducing pouring spouts and jars with dispensers. Bisleri 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, it introduced free sampling of Bisleri at the tables where the elderly guests would sit. Soon customers were ordering bottled water on special occasions

SIZE 1L 2L Others MMS –‘A’ Roll No.: 01-26-001

SALES 50% 20% 30% Page 19

Competitive study of Bottled Water Market Price: Bisleri is pursuing a price strategy and is confident that with the growth in volumes it will be able to bring down the prices. For instance while the 500ml is priced at Rs.8, 1-litre bottle is priced at Rs 12(Rs. 6/0.5L) Rs.22 for 2Ls and the 20-litre pack at 75 (Rs 3.75 per litre). Trade Promotion: • Bisleri differentiates by its breakaway seal as an assurance of purity. Market research conducted by Bisleri revealed that the overriding concern for set of buyers is the tampering of the seal and the reuse of bottles. Many have witnessed used bottles being refilled at railway stations. So when a consumer buys mineral water, he would like to be assured that the water has not been tampered with. • Bisleri is promoted by an aggressive print-and-TV backed by hoardings and point-ofsale material. Every interface with the consumer is being used as an opportunity to reinforce the message. For instance, all vehicles used for supply have been painted in bright blue, bear the Bisleri logo and sport catchy baselines like ‘drink and drive’. • Apart from creating consumer pull with an advertising campaign bisleri is boosting the retail push as well. Distribution is the key. The consumer will pick up whatever is conveniently available and is pushed by the retailer • Schemes: One Litre: One Box free on 5 Box. Half Litre :One Bottle free on 1 Box

Target Market Segment: Health Conscious people Positioning: Safe Water

Production,Distribution and Place: Being a heavy but low-priced product, transporters were not willing to touch Bisleri’s water bottles. Solution? Transport the water on its own. The gamble has paid off; today Bisleri has over 2,000 trucks moving the Bisleri range. In Mumbai, it has a bottling plant in Andheri which has 80 large vehicles out of which 50 are for specific areas.

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Competitive study of Bottled Water Market Retail outlets: 3,15,000 (paan shops are one of the most popular) Exclusive distributors: 3,400 Plants: 8 Franchises: 11 Number of factories: 54, will have another 30-32 more by March 2010 For 250ml-5L: The company directly approaches the retailer. For 20 Ltr. Jar:Bisleri sells its product through its own network and has also appointed Distributors for each area to sell its product. To effectively service the end consumer Bisleri has been working to continuously establish fresh bottling and distribution capacities. Over the course of the last one year, capacities have come up at 9 locations and the period from August to December 2008 will see 7 additional capacities to go on stream Distribution Weakness: • • Company is not addressing the compliant from distributor and end user Company does not use Polycarbonate Jars in 20 Litre, which result in loss of face value and ultimately losing customer.

Go global Bisleri plans to take its mountain water brands international, to Europe, America and West Asia. It has not yet started exporting because it is still working on getting the packaging right, looking for innovative, light-weight and sturdy packaging material

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Competitive study of Bottled Water Market

Company: Hindustan Coca cola Beverages Private Limited Brand: Kinley

Coke has identified bottled water as among its big ideas for growth, and its working brand Kinley has undergone a significant revamp. Kinley was launched by Coca-Cola India in the end of 2000. The brand enjoys 29.8% of Indian bottled water market share. Kinley also contributes 5% to Coca-Cola’s revenue in India.

MARKETING MIX Product: • • • • Kinley is available in pack sizes of 500 ml, 1 litre, 1.5 litres, 2 litres, 5 litres, 20 litres and 25 litres. COCA-COLA India is set to introduce Kinley, its bottled water brand, in 200-ml cups this season. The cups will be priced at Rs 3 each. The bottles now come in a new 'easy to hold' shape; and the label has changed from the previous blue to a transparent one. Quality: ISI Marked.

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Competitive study of Bottled Water Market Packaging: • In the eight years of existence, for the first time the brand has reconsidered its packaging. Earlier, the communication was more about safety but now it is not only about a new look, it’s more about the functionality. The transparent label conveys what the brand stands for. • Apart from new packaging, a new piece of integrated communication, sporting the new packaging and tagline, 'Boond Boond Mein Vishwas', has also been rolled out. This is the first concerted effort for the brand in the past three years. • The packaging is done pet bottles and polycarbonate jars

Trade Promotion: • • • • Effective TV ads (Boond Boond mein vishwas) Banking on Parent Brand Mobile Van For 1L bottles the company gives 1 box free on two boxes to the retailers

Price: Size 500ml 1L 25L Cost Rs.8 Rs.13 Rs.75

The company plans to launch 200ml cups for Rs.3 each.

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Competitive study of Bottled Water Market Production, Distribution and Place: • • • • The company now has separate distribution channels for Kinley and carbonated soft drinks (CSDs) in key markets such as Delhi, Mumbai, Chennai, Bangalore and Kolkata. Plants: 16 Reaches 5,00,000 retail outlets It has identified 10-15 sites for additional plants for water this calendar year, and these will be a combination of company-owned plants, franchisee operations and contract packers. • • • • • • For 500ml – 5L the company directly approaches the suppliers For 20L and 25L the company sells its products through its own network only. It has appointed HDA (Home delivery Agent) for some areas to sell its product. Last year, in the bulk water segment in Delhi and Pune, Coca-Cola had tied up with Nuchem Weir and Thermax Culligan Water Technologies respectively. In Kolkata, a similar contract was struck with Bisleri's franchisee, and later with S.R Minerals in Chennai, which was marketing the Hello brand in the city. Distribution Weakness: Not been able to penetrate in interior area since they have not appointed Distributors in most of the area The water is produced at Coca-Cola's three Greenfield manufacturing plants at Bidadi near Bangalore, Dasna in Uttar Pradesh and Goa. The company plans to either add more water bottling operations or go for contract bottling as it goes national.

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Competitive study of Bottled Water Market

Company: PepsiCo India limited Brand: Aquafina

Aquafina was launched in India in 1998, the first time the brand was introduced in any market outside the US. Aquafina, the largest-selling bottled water brand in the US, was launched in large packs for the discerning direct-to-home consumer for the first time in Hyderabad, India. Aquafina accounts for 7% of PepsiCo’s revenue. Aquafina meets stringent international and national quality standards for water purity set by World Health Organisation (WHO) and Bureau of Indian Standards (BIS). 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 since 27 Jul’07 as there were allegations that the water does not originate from public sources. Product: • • • Aquafina is available in 1/2L, 1L,1.5L, 2L, 5L and 25L bottles 100% tamper-proof seal Aquafina 25 Litre jars are fully transparent, with no blue tint that hides impurities. This way, you can be absolutely sure of the water you are receiving MMS –‘A’ Roll No.: 01-26-001 Page 25

Competitive study of Bottled Water Market

Quality: • • ISI marked It uses the most advanced state-of-the-art 7 step 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. Positioning: Bottled water that has undergone most stringent process and quality checks before selling it.

Trade Promotion: • • Special corporate offer: Aquafina gives out free Hot and Cold Dispenser for a minimum purchase of 5 jars a day for the corporate offices. Aqua Man: Pepsi brings world-class service to your doorstep with AquaMan, who is a trained delivery man. He not only delivers Aquafina 25L at your home, but also answers all queries related to delivery and the complete service solution. • • • Cashless payments: Aquafina's Electronic Pre-paid Card, for the first time in India, allows you to make cashless payments for a month's supply of Aquafina 25 Litre. The company provides 1 box free on 3 boxes ordered for 1L bottles Banking on Parent Brand, Banners

Production, Distribution and place: • • The most developed market is Tamilnadu followed by Gujrat and Maharashtra. Aquafina jars are delivered through vinyl-branded, hygienic trucks displaying contact details of the electronic call centre for potential consumers. The widely advertised, high-tech call centre will receive consumer orders, and the state-of-the-art IT system will ensure prompt response and speedy order turnaround. Each deliveryman will be equipped MMS –‘A’ Roll No.: 01-26-001 with a handheld electronic equipment to record every transaction Page 26

Competitive study of Bottled Water Market • • • Plants: 12 Reaches 1,50,000-2,50,000 retail outlets For all the bottles, the company directly approaches the retailers

Distribution Weakness: • • It seems that the Company is not pushing their packaged water brand “Aquafina” and concentrating on Beverages market. Many times their products are not available in the market.

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Competitive study of Bottled Water Market

Natural Mineral Water Company: TATA Enterprises Brand: Himalayan Mineral Water

Mount Everest Mineral Water Limited is a public limited company incorporated in 1991. The Company was promoted by Dr. Dadi Balsara, an NRI from Singapore. It had its first public issue in 1995. The company’s registered office is located at Himachal Pradesh. 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. The 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. The company started its commercial production in April 1997. The brand HIMALAYAN enjoys an aspirational equity amongst consumers and has the potential of truly becoming an international and iconic brand, it is this potential that the new management proposes to unlock through brand building and enhanced distribution.

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Competitive study of Bottled Water Market

Repositioning of the brand • The Tata Group enterprise Mount Everest Mineral Water is planning to bring out rebranded Himalayan natural mineral water across the country after having carried out brand repositioning in Mumbai. • The company is also undertaking a holistic 360 degree brand communication campaign to give its consumers an experience of going back to nature by means of a pristine and authentic mineral water to reposition the Himalayan brand as part of strategy • • • • • A new bottle shape is designed. Coloured caps are designed. But one thing that is not changed is the price of the product Positioned as a mineral water that not only provides safety and security, but a better mineral water experience, health and wellness The new 'rebranded' mineral water would be available in major cities. The company is seeking to tap the mineral water market by creating a brand around Himalayan with the tag line of 'Live Natural'. The company is also planning to enter the lower end segment of the packaged water business, besides looking at other segments of the beverages market.

MARKETING MIX
Product: • • • Himalayan natural mineral water is available in six pack sizes namely 2 ltr, 1.5ltr, 1 ltr, 750 ml, 500 ml, and 200 ml. Himalayan natural mineral water’s simple, yet striking bottle design is a creation of Rediffusion DY&R, and has been actualised by SIPA, Italy 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 and then it is bottled. This process takes over a period of 20 years.The acquifer has a recharge capacity MMS –‘A’ Roll No.: 01-26-001 of 1bn litres every year. Page 29

Competitive study of Bottled Water Market Quality: • • The company and the product enjoy the certification of various authorities like HACCP, BIS and ISI in India. Himalayan is the only natural mineral water from India, internationally accredited by the US FDA, the health ministries of Japan and France, the European Union and the Institut de Fresenius, Germany Price: • • The 750ml bottles are priced at Rs.25 at multiplexes and Rs.18 at retail markets. The competitors it has in India are Evian manufactured by Danone and Perrier by Nestle but the Himalayan is priced at 1/4th rate of the products so it is the cheapest and most advertised mineral water available in the country

Trade Promotion: • The brand is promoted by highlighting the fact that it is untouched and unprocessed, with a unique taste acquired over 20 years of percolation, as it makes its way to the underground aquifer located in Himalayas • The brand mythology is captured eloquently on every bottle of Himalayan natural mineral water, narrating the story of water crafted with a careless disregard for time — one that nature has spent years to perfect. This journey personifies the brand and seeks to make the consumer one with its source — the Himalayas — with its inherent and pristine goodness that sets it apart from ordinary water • ‘Live Natural’ aptly captures this brands credo.

Production, Distribution and Place: • • • Its plant is at Dhaula Kuan in Sirmour District of Himachal Pradesh. Under the previous management the product was sold largely in the Institutional and foodservices segment. The company now proposes to expand its retail distribution network by appointing consignee and distributors agents in various parts of the country. MMS –‘A’ Roll No.: 01-26-001 Page 30

Competitive study of Bottled Water Market • • The new Himalayan natural mineral water is sold at all leading ‘A’ category retail outlets, modern retail (malls), hypermarts chemists and high-end neighbourhood grocery shops The company’s existing clientele includes tie-ups with:     5 Star Hotels: The Taj, The Oberoi, Marriott, InterContinental Airlines: Jet Airways Multiplexes: AdlabsEmbassies etc Fine-dine restaurants: Zodiac Grill, China Gate, Golden Dragon, Indiana Jones, and Frangipani among others.

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Competitive study of Bottled Water Market

OBSERVATIONS
• • • • • The Indian Bottled Water Industry is a high growth rate Industry and a huge untapped market The water shortage around the world and particularly in third world countries has opened new avenues for bottled water Industry Also increase in the cases of water-borne diseases during monsoons and bad quality municipal water have led to increase in the consumption of bottled water The Indian players should concentrate more on Rural marketing of their products as it is in Rural Areas that the bottled waters would be most beneficial but it lies untapped If we compare the growth and status of Indian Bottled Industry with western or Asian market, we are far behind in terms of quantum, infrastructure, professionalism & standards’ implementation • • • Multinationals have entered Indian Shores, making rapid strides in Indian Market and have eroded market share of leaders and small players alike The current market leader is Bisleri, but even it has felt a need to continuously innovate and enter into different segments to keep up its market share Tampered seals and pesticides were found in various bottled waters as a result of which consumers have started preferring mineral water and are ready to pay higher prices for the same • Prices and packages of the bottled water brands are almost the same, the distinguishing points left are Brand name and promotions conducted. But most of the times customers buy whatever is available on shelf • • Water being considered a free resource, its branding and selling depend highly on the promotional activities Apart from increasing affluence among domestic consumers, exports would provide a further trigger to the industry. Exports of natural water, particularly to US and Europe, would drive growth for domestic players • The existing players are set to expand their distribution network to have their presence across the country and the players with deep pockets are expected to go for acquisition of MMS –‘A’ Roll No.: 01-26-001 existing small regional players to spread their network across the country. Page 32

Competitive study of Bottled Water Market

BIBLIOGRAPHY
www.bottledwaterindia.org www.india-today.com www.bisleri.com www.pfionline.com www.domain-b.com www.tamindia.com www.rediff.com www.just-drinks.com www.aquafina.com www.himalayanmineralwater.com www.businessline.com www.coca-cola.com

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