Packaged Bottled Water in India

- a case study on Eureka Forbes

By Bhumika, Nirav, Shatru
ITM-XMBA-Batch 41

“Water water everywhere But just a little that is clean”
• Water. The fountain of all life. • Sixty per cent of our body weight is made up of it. • Water can also be the cause of much misery. Especially in India, where contaminated water continues to bring down millions with diseases such as diarrhea, dysentery, typhoid, jaundice and gastro-enteritis. • Getting pure drinking water from municipal taps in cities and towns is now a luxury. • At home most people are forced to either boil water or install purifiers. While traveling or eating out in restaurants, buying bottled water has become a necessity. This need has seen an explosion of companies marketing “safe drinking water” in bottles across the country.

PACKAGED WATER
• How is bottled water different from tap water?
– Consistent quality and taste are two of the principal differences between bottled water and tap water. – While bottled water originates from protected sources largely from underground aquifers and springs – tap water comes mostly from rivers and lakes.

TYPES OF BOTTLED WATER
The FDA also classifies some bottled water according to its origin. Artesian well water Water from a well that taps an aquifer--layers of porous rock, sand and earth that contain water--which is under pressure from surrounding upper layers of rock or clay. Mineral water. Water from an underground source that contains at least 250 parts per million total dissolved solids. Minerals and trace elements must come from the source of the underground water. They cannot be added later. Spring water Derived from an underground formation from which water flows naturally to the earth's surface. Spring water must be collected only at the spring or through a borehole tapping the underground formation feeding the spring. If some external force is used to collect the water through a borehole, the water must have the same composition and quality as the water that naturally flows to the surface. Glacial (Glacier) water It is either the runoff directly from the natural melting of ice of glacier or water obtained from the melting of glacier ice at a bottled water operation Well water. Water from a hole bored or drilled into the ground, which taps into an aquifer. Tap Water Some bottled water also comes from municipal sources--in other words--the tap. Municipal water is usually treated before it is bottled.

Market in India
• Indian market is estimate about 1000 Rs. Crore • It is estimated that by end of 2013, volume of bottled water will reach 7440 million liters

The growth is expected to continue given the low Per Caps Global Average USA Mexico Italy Thailand India

Per Capita Consumption (Liters) 25 130 269 245 117 1.7

Packages
Pouches 2 Litre 9% 500 ml Bulk 6% 49% 34% 1 Ltire

2%

Market in India


• • •

Broadly three major segments : premium natural mineral water, natural mineral water and packaged drinking water. Premium natural mineral water includes brands such as Evian, San Pelligrino , Perrier, etc. Natural mineral water, with brands such as Himalayan, Catch, Brilliant, etc. Packaged drinking water with top brands such as Bisleri, Bailey, Kinley , Aquafina, More than 200 local brands

Geography
Brands
21% 40% 11% 28% Bisleri Kinley Aquafina 25% 10% 40% 25% North East South West

Others

What is fueling this Industry growth?
Higher disposable income Increased On-the-go behaviour Importance of Hygiene

Increased Availability

Affordable Price Points

7 Lakh  9 Lakh outlets

Synopsis
• India's leading water purification and treatment appliances-maker Eureka Forbes has made plans to enter the packaged water segment in the country. The company intends to roll out the launch of its products on an all-India The company is expected to roll out its products under the brand name 'AquaSure'. The packaged water will be initially available in the fast moving 1 liter and 20 litre segments.  How Eureka Forbes, “Aquasure” bottled water will increase the distribution network to capture Indian market  Plan of promotional program / strategy for the new product.  Should Eureka Forbes move from its original LOB i.e. water purifiers to bottled water product competition  How can a new entrant like Eureka Forbes compete with products like Bisleri, Kinley who have huge market shares?

How Eureka Forbes, “Aquasure” bottled water will increase the distribution network to capture Indian market
• Eureka Forbes has entered the bottled water market through the 'franchisee' route and each franchisee is expected to invest around Rs 2 crore in the purification and bottling set-up • To make supply –chain strong, either EF or its franchises will have to invest into distributed warehousing so that they can reach to, from “paanwalas” to 5 star hotels, across the geography • Offering better margin to distributor to retailer for stocking • A separate chain of distribution focusing on following segments –
– Bulk water to institutional customers (corporate, BPO, business outlets, households, clubs, spa, etc.) – 500 ml/1000 ml bottles to super markets/hyper markets/grocery stores – 200ml/330 ml/500 ml /1000 ml bottles to restaurants/hotels/resorts/in-flight kitchens/theatres – Pouches/cups to caterers – Rural Market

Plan of promotional program / strategy for the new product
• Building brand on Eureka Forbes “trust for pure water” • Advertisement in print , media, point-of-sales • Kiosks at strategic points : shopping malls, tourist places, public places (parks, beaches, etc.) • Tie-up with food-courts at shopping malls • Tie-up with food stalls at railway-platforms • Tie-up with fine-dine/speciality/up-market restaurants and gyms/healthclubs/spas • Special promos – eg. Buy 1, get 1 free • Sponsoring events

How can a new entrant like Eureka Forbes compete with products like Bisleri, Kinley who have huge market shares?

• Rather than a “me-2-product” to value added/premium/niche product, for example, flavored, vitamined, mineral, etc. • Focus on distributing to upmarket/premium/health conscious outlets (for example, 3 to 5 star hotels & resorts, spas, health clubs, gyms, multiplexes, fine-dine restaurants, in-flight catering, etc.) • Look for a JV with a lifestyle/ayurveda product/ giant FMCG company for marketing &distribution (for example, Himalaya, Dabur, P&G, etc.)

Should Eureka Forbes move from its original LOB i.e. water purifiers to bottled water product competition
• Brand positioning : Aquasure Water Purifier v/s Aquasure Bottled Water • Brand confusion : Aquafina v/s Aquasure • EF has not only to compete with Bisleri/Bailey, Kinley, Aquafina, and more than 200 local /regional players but also with giants like : – Himalayan (Tata) – Mulshi Spring – Vedica (Parle) – B’lue and Qua (JV between Danone and Narang) – Tata Water Plus (JV between Tata and PepsiCo) – Aava & Golden Valley (Godrej) – Evian (Danone) – San Pelligrino – Perrier (Nestle)

Should Eureka Forbes move from its original LOB i.e. water purifiers to bottled water product competition

• EF has a major market share of 52 per cent market share in the 1,500 crore water purifier segment, with its Aquaguard and AquaSure brands. • The rest is divided among Kent RO,Pentair,Ion Exchange and Others. • Water Purifiers (residential segment) are growing at 22-25% annually. • EF should stick to its core product portfolio where there are already leader rather than competing with FMCG giants.