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MINERAL WATER MARKET IN MUMBAI

1. 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. Infact 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 feels 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 6bn (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. Infact one of the major factor for flourishing of the sector is the public fear that water supplied by civic bodies is impure.

MINERAL WATER MARKET IN MUMBAI

1.1 History of mineral water

International scenario: Popularity of Mineral water: The tradition of bottled water and mineral 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 has been quite prevalent in western countries due to greater health consciousness and higher awareness about health and hygiene. The international standards regarding bottled water are so stringent that for a particular brand of water to be certified as bottled water it has to get approvals on four levels: federal, state, trade association and individual company levels. 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.

MINERAL WATER MARKET IN MUMBAI

Some of the standards governing the bottled water industry in US are:


y

Water is classified as bottled water or drinking water, if it meets all applicable federal and state standards, is sealed in a sanitary container and is sold for human consumption.

Bottled water cannot contain sweeteners or chemical additives (other than flavors, extracts or essences) and must be calorie-free and sugar-free.

Flavors, extracts and essences--derived from spice or fruit -- can be added to bottled water, but these additions must comprise less than one percent by weight of the final product.

Beverages containing more than the one-percent-by-weight flavor limit are classified as soft drinks, not bottled water.

y y

Bottled water may be sodium-free or contain "very low" amounts of sodium. Tap water uses Chlorine as a disinfectant bottled water uses Ozone as a disinfectant. Bottled water should

not contain chlorine.

MINERAL WATER MARKET IN MUMBAI

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 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, 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.

MINERAL WATER MARKET IN MUMBAI

1.2 HOW IS BOTTLED WATER DEFFERENT 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.

Another factor to consider is the distance tap water must travel and what it goes through before it reaches the tap. In compliance with international regulations, bottled water is sealed and packaged in sanitary containers. If a bottled water product is found to be substandard, it can be recalled. This can't happen in case of tap water.

According to regulations in the US, when bottled water is source from a community water system the product label must state so clearly. However, if the water is subject to distillation, deionization or reverse osmosis, it can be categorized that way, and does not have to state on its label that it is from a community water system or from a municipal source.

Processing methods such as reverse osmosis remove most chemical and microbiological contaminants.

MINERAL WATER MARKET IN MUMBAI

1.3 TYPES OF 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. 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 one-percent weight of the final product or the product will be considered a soft drink.

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.

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.

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.

MINERAL WATER MARKET IN MUMBAI

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 finding the spring.

Well Water:

Bottled water from a hole bored, drilled or otherwise constructed in the ground, which taps the water of an aquifer.

MINERAL WATER MARKET IN MUMBAI

1.4 PURIFICATION PROCESS

Purity and safety are two major factors that should be taken care in sourcing and processing of bottled water. Under ground water is used by it for filling the water. Underground spring is carefully selected based on its potability and pathogen free water. Great care goes in tapping this source. Only water below 25 meters is tapped. This is to avoid any surface contamination to percolate and mix with underground water source. Area surrounding the water collection tube at the surface is protected and kept clean. The under ground water goes through seven stages of purification process which is as follows: 1. Chlorinisation First of all water is taken out from six borewells and stored in the tank and chlorine is mixed in it. This is done to remove bacteria from water.

2. Sand filtration Chlorine mixed water is passed through seven layers of sand in a tank. This way all the major bacteria are taken out from water.

3. Carbon filter After sand filtration water is passed through carbon filter to remove the chlorine that was mixed earlier.

4. Ultra filtration Under this method water is passed through a filter, which has the pores of .2 microns, and even the biggest r of bacteria is of .5 microns, hence through this filter even the remotest bacteria and dust particles are taken out.

5. Reverse osmosis As per the law TDS (total dissolved solids) are required to be maintained at the level of 70 - 110 ppm, through reverse osmosis TDS is maintained at 100 ppm.

MINERAL WATER MARKET IN MUMBAI

6. Ozonisation Under this method ozone gas is mixed with water.

7. U V filtration Under this method ultra violet rays are passed through the water to kill water. This us basically a precautionary step to purify water as after reverse osmosis no bacteria remain in water.

After whole this process at last step bottles are passed through a white screen where a quality in charge inspect each and every bottle to ensure that there are no dust particles in the bottles and if they are found then those bottles are rejected.

MINERAL WATER MARKET IN MUMBAI

1.5 Labeling

The standards pertaining to labeling of products in the industry are:           

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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MINERAL WATER MARKET IN MUMBAI

1.6 Mineral Water Market In Mumbai

MINERAL WATER MARKET IN MUMBAI

Main Players Kinley Aquafina Bailey Bisleri

Other Players Krishna Hello Brilliant Apurva

New Players Oxyrich

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MINERAL WATER MARKET IN MUMBAI

2 Introduction to the Market 2.1 Background of Indian Scenario

Big Players Keen to Get into Bottled Water

The Rs. 500 crore-bottled water market is witnessing hectic activity with many players entering the fray in the last one-year and still more to come. Part of the fast moving consumer goods (FMCG) sector, bottled water is the only segment to have shown phenomenal growth of about 50 per cent in the last one year.

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 is the latest to enter this market with the launch of its brand `Pure Life' in New Delhi last week. It plans to grab a 50 per cent 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 Nestls 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.

The market is expected to continue to grow at a healthy clip. In fact, in the last two years, there has been a doubling of growth. Major players include Parle Bisleri, Parle Agro, Coca Cola, PepsiCo, and among domestic players UB and Britannia. The success of bottled water could be attributed to two factors. First, it has been an underdeveloped business for a while now and, second, soft drink manufacturers have priced themselves out by a long shot. 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.

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MINERAL WATER MARKET IN MUMBAI

In fact, soft drink major Coke launched its Kinley brand of bottled water and Pepsi its global brand Aquafina. PepsiCo is reportedly contemplating two more pack sizes for its bottled water. Kinley's new product follows the launch of `Chhotu' Bailley, which is a 350 ml bottle introduced by Parle Agro. Kinley water was launched in August 2000 in one-litre bottles for Rs.10. 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.

Marketing Consultants, with a current market share of 38%, Bisleri offers the maximum number of pack sizes. Kinley follows it with a 28% share. The other brands including Aquafina and Bailley constitute 11% & 6% per cent market share in the bottled water market.

The Samsika survey further says that there are as many as 186 brands in the water market. Out of this, two are national brands, 17 regional and 167 local brands.

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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MINERAL WATER MARKET IN MUMBAI

With over 200 players jostling to be the thirst-quenching favorite of the Indian consumer, the business is growing at a rate of over 50 per cent annually. The country's bottled water business is estimated to be around Rs. 1,100 crore, of which the branded market accounts for Rs. 700 crore and about 700 million litres in volume.

y y y

Indias 1 billion plus populace needs between 1-2 billion litres a day More than 200 brands of bottled water are being retailed across the country An estimated 850 million liters of bottled water is bought every year

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MINERAL WATER MARKET IN MUMBAI

2.2 Mumbai Market Scenario

SALES TREND ( SEASONAL ) Mumbai Market

50% 40% 30% 20% 10% 0% X-axis-- Season Y-axis Sale %

45% 29% 26%

Summer

Monsoon

Winter

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 is 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 conditions.

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MINERAL WATER MARKET IN MUMBAI

2.3 INDUSTRY GROWTH RATE (%)

% INDUSTRY GROWTH RAT

70 60 50 40 % GROWTH RAT 60

70 66

50

Y ARS

Percapita Consumption

Overall percapita consumption is merely 0.04% (Source Financial Express). Percapita income in Mumbai is Rs. 2515 per month

Market size by Volume and Value

The market size of Packaged Drinking Bottled water is around 11000 crore, and Mumbai market constitute around 10% which is 100 crores. Market has grown by around 500 crore in the last few years. Current growth rate estimated is 55%, which is one of the highest of all industries.

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30 20 10 0 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 10 4

MINERAL WATER MARKET IN MUMBAI

2.3 Population
Estimates of the present population are in the range of 14 to 15 million. . Market Mumbai

Population
Estimates of the present population are in the range of 14 to 15 million. The 1991 census found that 12.5 million people lived in the Mumbai Metropolitan Region. Of these, 9.9 million lived in Greater Mumbai. Mumbai's population has grown most rapidly in the years after India's independence. In the decade between the censuses of 1981 and 1991, there have been some signs of a leveling off in the growth. Population figures obtained from historical sources and the Indian census summarized in the graph and table below.

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MINERAL WATER MARKET IN MUMBAI

Year wise Comparison

1981 1991 2001 : :

8.5 mn 12.5 mn 15 mn

According to Area 1991 Greater Mumbai : Rest of Mumbai : 9.9 mn 2.6 mn 2001 10.57 mn 4.43 mn

As per Age Composition

Population - Age Classification

5% 37% 0-14 15-69 69 +

58%

Age

Population

0-14 15-59 60 Above

37% 58% 5%

8.7 mn 5.55 mn 0.75 mn

* All the figure for 2001 are estimated Source: Report On Population, Tata Energy Institute, New Delhi.

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MINERAL WATER MARKET IN MUMBAI

2.3 Per capita Consumption


Overall per capita consumption is merely 0.04% (Source Financial Express). Nearly 80 per cent of the demand for bottled water comes from metros.

20-litre jar Mumbai South Mumbai 44 Jar per office

Mumbai

North Mumbai

50 Jar per office

Mumbai

West Mumbai

48 Jar per office

Mumbai

Central Mumbai

60 Jar per office

Market size by Volume and Value The market size of Packaged Drinking Bottled water is around 1000 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 55%, which is one of the highest of all industries.

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MINERAL WATER MARKET IN MUMBAI

2.5 Brands Available: Various brands are available in Mumbai. Few of them are as follows: Brands Bisleri Kinley Aquafina Bailley Brilliant ** Hello ** Spakel Harnil * Apurva * Bally * Krishna* Litre - 1 litre. Etc Yes Yes Yes Yes Yes No Yes No No No No 20 Litre. Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes

Year wise Comparison 1981 1991 2001 : : : 8.5 mn 12.5 mn 15 mn

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MINERAL WATER MARKET IN MUMBAI

2.6 Retail Outlets There are above 1,00,000 retail outlets in Mumbai. Classification Grocery & General Store Departmental Stores Cold Drink House Hotels & Restaurants Beer Bar Pan Bidi Shop Others % 40 03 02 05 02 28 20

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MINERAL WATER MARKET IN MUMBAI

2.6 Brand Wise Share


BRAND WISE MARKET SHARE(%)
Others 17%

Bis leri Bailley 6% 38%

A quaf ina 11%

Kinley 28%

The ORG-MARG survey conducted recently shows that the market leader Bisleri is having 37.6% market share followed by Kinley, Aquafina, Bailley and others with 28.2%, 11.11%, 5.7% and 17.4% respectively. One thing is very clear from the two surveys conducted that the market leader is Bisleri with Kinley, Aquafina, and Bailley are the trailers, and now with Manikchand into mineral water, the competition is going to be tough.

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MINERAL WATER MARKET IN MUMBAI

3. MARKET CATEGORISATION
The market of packaged drinking water is categorized as follows:          Theatres / cinema halls/ multiplexes.

Corporate.

Caterers.

Picnic spots, Clubs, Gymkhanas.

Hotels, Resorts.

Resorts.

In-flight kitchens.

College canteens.

General Stores etc.

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MINERAL WATER MARKET IN MUMBAI

3.1 Caterers

Brand Share:

Popularity of various brand among Caterers

24% Bi le i Bailey 44

Kinley s Mc Dow ell

12%

Brookes O hers 10% 7% 3%

Usage Pattern: Usage pattern in Caterers

35% users non users


65%

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MINERAL WATER MARKET IN MUMBAI

Payment Terms:

Payment Terms - Caterers & Gymkhana

26% Cash Credi

74%

Other Findings:

Price closely followed by Service, Storage, Ease of operation & Availability are the key factors affecting the buying decision process. They are willing to pay only unto a maximum of Rs 2.50 per liter which is too below the price that any branded player can afford to sell

Credit is a key factor that was revealed by most contractors after intensive probing. The credit period expected by most was from 15 days to a month. They mostly avoid dealing directly with companies for this very reason & prefer to buy through the company intermediaries who provides them the necessary credit

Most contractors expect the provider to supply directly to the wedding/party site, as they generally do not have the space to stock the bottles.

Brand name has absolutely no relevance to them.

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MINERAL WATER MARKET IN MUMBAI

3.2 Cinemas

Brand Share:

MARKET SHARE OF VARIOUS BRANDS IN CINEMA HALLS IN 1 LITRE PACK


BAILLEY 19% BISLERI 11%

BISLERI A'FINA 18% KINLEY 52% KINLEY A'FINA BAILLEY

Payment Terms:

Payment Terms - Cinemas Hall & T eatres


Credi 30%

Credi Cash 70%

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Cash

MINERAL WATER MARKET IN MUMBAI

Frequency of Visit: Twice a week

Other Findings:

Price closely followed by Brand Name, Convenience, & Service are the important factors that affect the buying decision process

Cinema halls, Cyber Cafes, Bowling Alleys, Video game parlors are some places where people generally go to have a nice time.

The average time that a person spends at the above ranges between 2-5 hours for a cinema hall to an hour for a cyber caf. The above centers already have the kiosks of the cola companies like Coke, & Pepsi along with the vending machine of Nescafe. Thus there definitely is a potential for the introduction of a kiosk vending pure water in these categories of outlets

Purchase frequency would vary to as low as thrice a month in a cyber caf to

as high as twice a week in case of Amusement parks like Esselworld & Water Kingdom

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MINERAL WATER MARKET IN MUMBAI

3.3 Hotel and Restaurant


Availability Share:

Ava ab

y Sha e - Ho e & Res au an

9%

4%

Bisleri
36%

Kinleys AquaFina Bailey Others

21%

30%

Payment Terms: Pay en Te s - Ho e s & Res au an

35% Cash Credit 65%

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MINERAL WATER MARKET IN MUMBAI

Service Frequency: Alternative Day

Findings: 

Price closely followed by Service, Taste of water and Ease of operation are the important factors that affect the buying decision process.

Hygiene is a very important factor when a customer decides to snack/eat in a particular outlet. More so when we interviewed food stalls in Juhu Chowpatty a majority of the food stall owners said that they now provide their customers with the 1 litre Bisleri bottle as many customers refuse to accept the water offered to them.

Respondents showed a fair level of brand awareness but there was no distinct preference to any particular brand. Bisleri had a fair level of unaided recall vis-vis other brands like Bailey, Kinley, etc.

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MINERAL WATER MARKET IN MUMBAI

3.4 Retail Outlet Finding:

    

Small Space

Less Quantity and more frequency of purchase

Prefer Credit facility

Look out for schemes.

Bigger Margin, More preferences.

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MINERAL WATER MARKET IN MUMBAI

4. Brand Wise details


A Survey Format of Distribution- Network of Packed Bottled Water

Name of Company: Brand: Name of Area: Address & Tel. No: No. of ehicles used: ompan istrib tor Total: ist of taff Appointed for istribution A.S.M. S. Rep. S. Officer wn wn : : istributor:

Driver

Loader

ates &

argins to arious Intermediaries for ifferent Pack izes 330 ml 500 ml lit 2 lit 5 lit 0 lit 20 lit

C& ate istrbr. ate etailer Price . . P.

Percentage

arket hare of Company:

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MINERAL WATER MARKET IN MUMBAI

4.1 Company: Parle Bisleri Private Limited. Brand: Bisleri Address: Parle Bisleri Pvt. Ltd., Western Eastern Highway, Andheri (E). Product: Packaged Drinking Water Design:

Quality: ISI Marked.

Packaging: Pet Bottles

Target Market Segment: Health Conscious people

Positioning: Safe Water

Trade Promotion: Corporate Event, Play safe Campaign, Mobile Van, Stressing on Seal

Distribution: Bottling plant (Andheri) Large Vehicle (Nos. 80)   For Specific Area (Nos. 50) For Distributors (Nos. 30)

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MINERAL WATER MARKET IN MUMBAI

For 1 Ltr. etc. The Company directly approaches the retailer. They have tracked Mumbai through various routes and accordingly they service. Their major hub is Santacruz, Vile Parle & Andheri in Suburbs. Schemes: One Litre One Box free on 5 Box Half Litre One Bottle free on 1 Box

For 20 Ltr. jar

Bisleri sell their product through their own network and they have also appointed Distributors for each area to sell their product.

Bisleri-DISTRIBUTOR Details for 20 Ltr.- South Mumbai Distributor: Nos. 16 Average sales per Distributor: 110 Jar per day. Vehicle: Nos. 7 (for Distributor) MRP: Rs. 60 Net Cost Price (for Distributor): Rs. 43 Margin of Rs. 17 (39.53%)

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MINERAL WATER MARKET IN MUMBAI

Bisleri on their Own. (South Mumbai) Service Frequency: Alternate days Vehicle: Nos. 12 Manpower per Vehicle    Schemes: 1 Jar Free on 10 jars. 88 Jars free on 700 jars, if bought within 4 days. 1 loader 1 Driver 1 salesmen

All Schemes are for Distributors in South Mumbai. Distribution channel

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.

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MINERAL WATER MARKET IN MUMBAI

4.2 Company: Hindustan Coca cola Beverages Private Limited

Brand: Kinley

Product: Packaged Drinking Water

Design:

Quality: ISI Marked.

Packaging: Pet Bottles, Polycarbonate Jars

Target Market Segment: Health Conscious people

Positioning: Safe Water

Trade Promotion: Effective TV ads (Boond Boond mein vishwas), Banking on Parent Brand, Mobile Van.

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MINERAL WATER MARKET IN MUMBAI

Distribution: Bottling plant (Wada, Thane District)

Three C&F for catering Mumbai Market    Vidyavihar Kandivali Sewri

Large Vehicle (Nos. 129)    Vidyavihar (Nos. 69) Kandivali (Nos. 40) Sewri For 1 Ltr. etc. The Company directly approaches the retailer. They have tracked Mumbai through various routes and accordingly they service. Schemes: One Litre One Box free on 2 Box (Net Rs. 80 per Box) Half Litre No scheme (Nos. 40)

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MINERAL WATER MARKET IN MUMBAI

For 20 Ltr. jar

Kinley sell their products through their own network only. They have appointed HDA (Home delivery Agent) for some area to sell their product.

Service Frequency: Alternate days

Manpower per Vehicle    MRP: Rs. 65 Lowest Selling Price to Corporate Rs. 50. 1 loader 1 Driver/salesmen 1 salesmen

Distribution Weakness:  Not been able to penetrate in interior area since they have not appointed Distributors in most of the area.

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MINERAL WATER MARKET IN MUMBAI

4.3 Company: PepsiCo India limited

Brand: Aquafina

Product: Packaged Drinking Water

Quality: ISI Marked

Packaging: Pet Bottles

Target Market Segment: Health Conscious people

Positioning: Safe Water

Trade Promotion: Banking on Parent Brand, Banners.

Distribution:

Bottling plant (Chembur, Roha)

Distributor for catering Mumbai Market

   

Jogeshwari Sewri Chembur, Kanjur Marg Resources Large Vehicle (Soft Drink Vehicle)

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MINERAL WATER MARKET IN MUMBAI

For 1 Ltr. etc.

The Company directly approaches the retailer. They have tracked Mumbai through various routes and accordingly they service. Schemes: One Litre One Box free on 3 Box (Net Rs. 80 per Box) Half Litre No scheme

For 20 Ltr jar The Company has not entered the 20-litre Packaged water Market

Distribution Weakness:    brand. 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. Aquafina packaged Bottles water is given in a scheme to promote their Beverages

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MINERAL WATER MARKET IN MUMBAI

4.4 Company: Parle Agro Private Limited.

Brand: Bailey

Product: Packaged Drinking Water

Quality: ISI Marked

Packaging: Pet Bottles, Polycarbonate Jars

Target Market Segment: Health Conscious people

Positioning: Safe Water

Trade Promotion: Mobile Van

Distribution:

Bottling plant (Patalganga, Panvel)

Two Godowns to cater Mumbai Market   Jogeshwari Vikroli

Large Vehicle (Nos. 90)   Jogeshwari (Nos. 40) Vikroli (Nos. 50)

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MINERAL WATER MARKET IN MUMBAI

For 1 Ltr. etc.

The Company directly approaches the retailer. They have tracked Mumbai through various routes and accordingly they service.

For 20 Ltr. jar

Bailey sells their product through their own network in South Mumbai. They have appointed Distributors in North Mumbai and other parts.

Service Frequency: Twice in a Week.

Vehicles: There are 2 dedicated Vehicles for South Mumbai. (20 Ltr jar) Manpower per Vehicle   MRP: Rs 60 Net Cost Price to Distributor: Rs. 46-48 Margin to Distributor: Rs. 14 1 loader 1 Driver/salesmen

Distribution Weakness:    The Company is losing out its share on every front. Lethargic Approach towards Market. No Advertisement, Lack of Aggressiveness.

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MINERAL WATER MARKET IN MUMBAI

4.5 Company: Balsara

Brand: Himalayan

Product: Natural Mineral Water

Quality: ISI Marked

Packaging: Pet Bottles, Polycarbonate Jars Target Market Segment: Health Conscious people Positioning: Mineral Water Trade Promotion: Direct Selling Distribution Channel:

Bottling plant (Himachal Pradesh) For 1 Ltr. etc.

The Company is targeting Star Hotels and has penetrated in most of the star Hotels. MRP Rs. 15 (One Litre) For 20 Ltr. jar They have not ventured the 20 Litre Market. Distribution Weakness:    Not been able to penetrate in the Market Failed to create awareness for their USP Low on Advertisement and other awareness program Other Information    It is an ISO-9002 certified Company The Company is one of the integrated natural Mineral water bottling plant in Asia It is a subsidiary of Balsara group for Companies

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MINERAL WATER MARKET IN MUMBAI

4.6 Company: Brilliant

Product: Packaged Drinking Water

Quality: ISI Marked

Packaging: Pet Bottles, Polycarbonate Jars

Target Market Segment: Health Conscious people

Positioning: Pure Water

Trade Promotion: Direct Selling, Push Strategy

Distribution: For 1 Ltr. etc. The Product is available at very few selected places Company direct handle the distribution of their product.

MRP: Rs. 12 (One Litre) For 20 Ltr. Jar They have appointed 4 Distributors in South Mumbai. (Nariman Point, Nepeansea road, Fort, Central Mumbai) MRP : Rs. 70 Net CP to Distributor: Rs. 52 Deposit: Rs. 350 per jar * Can be the Biggest Competitor to KINLEY in the near future in the 20-litre segment?

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MINERAL WATER MARKET IN MUMBAI

Distribution Weakness:   Not been able to penetrate in the Market. Low on Advertisement and other awareness program.

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MINERAL WATER MARKET IN MUMBAI

4.7 Company: Hello

Product: Packaged Drinking Water

Quality: ISI Marked.

Packaging: Pet Bottles, Carbonated Jars.

Target Market Segment: Health Conscious people

Positioning: Safe Water

Trade Promotion: Direct Selling

Distribution:

Bottling plant (MIDC, Andheri) Three Company owned Stockist (MIDC, Dhobitalao) Large Vehicle (Nos. 4) For 1 Ltr. etc. The Company deals only in Jars (24 litre and 20 litre) For 20 Ltr. jar Hello sells their product through their own network consuming 1000 jars per day.

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MINERAL WATER MARKET IN MUMBAI

Resources With Hello for 20 Ltr - South Mumbai Stockist: 1 Average sale per Stockist: 350 Jar per day. Vehicle: 1 Large Vehicle for Distributor and 2 three-wheeler. MRP: Rs. 72 for 24 litres MRP: Rs. 60 for 20 Litre Manpower per Vehicle    1 loader 1 Driver 1 salesmen

Distribution Weakness:   Lack Aggressiveness Slow and steady approach

Other Information USP:

24 Litre Jars. Handle in the Jars.

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MINERAL WATER MARKET IN MUMBAI

4.9 Distribution Channel of Aquafina

BOTTLING PLANT

GODOWN

JOGESHWARI

CHEMBUR

SEWRI

AREA 1

AREA 2
Mulund Twice a week Vidyavihar Once a week 2

AREA 3

Area: Visit: No .of Routes:

Ghatkopar Twice a week 4

Not Available

Area Covered:

Ghatkopar to Mulund including Vidyavihar

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MINERAL WATER MARKET IN MUMBAI

5. SWOT analysis of the packaged water industry

STRENGTH The industry is growing @ 40%. In India the market is huge & untapped Growing awareness among the people about the importance of mineral water WEAKNESS Many players entering in the race. Any local person can start manufacturing. Rural population is not using the packaged water. Not very economical Quality not properly maintained e.g. Bisleri & hence has bad effect on the whole OPPORTUNITY

Sustained Market growth increase in coming years Literacy rate growing and hence the awareness of safe drinking water to avoid the diseases. Huge population & untapped market. THREAT Many substitutes available Too many players will dilute the market & the profit margin

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6. Segmentation
The mineral water market is segmented according to the type of consumers:

Foreign Tourists: Foreign tourists have been the main consumers of the mineral 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 mineral 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 drinks, which have usually been positioned as fun and health drink for young adults.

The mineral 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 achiever 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.

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7. 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

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8. Legal requirements
The bottled water industry is governed by PFA and BIS standards. Some of the key highlights of these legislations are:   Mineral water is covered under the Prevention of Food Adulteration Act (PFA), while drinking water is not under its preview. Drinking Water is excluded from the purview of the (PFA) Prevention of Food Adulteration Act, 1954. Except for the specification that water used in the preparation of a food article shall be free from micro organisms likely to cause diseases and should be free from chemical constituents that might impair health.  The Prevention of Food Adulteration Act (PFA) of 1954, whose stipulation is mandatory, has set standards only for mineral water and defines it as water obtained directly from potable natural or drilled sources that contain a substantial amount of nontoxic, health-related mineral salts.  containers.        The Bureau of Indian Standards (BIS) has provided standards for both drinking water and mineral water but compliance hitherto was voluntary To regulate the quality and price of bottled water, BIS approval has been made mandatory w.e.f. end of 1999 Mineral water shall be packed in clean, colourless, transparent and tamperproof bottles made of polyethylene conforming to the IS 10146 standards. The standards laid down under PFA Act do not prescribe any minimum quantity of minerals to qualify as mineral water. Hitherto Indian laws do not stipulate the minimum mineral content level required for water to be labelled as a mineral water The BIS does not lay down any guideline or practice for processing water. There is no specific industrial licensing policy for the bottled-water sector. Thus any one can set up a plant can do so without establishing the source of the water and the technology used to purify it. The PFA rule on mineral water is that it must be free from dirt, foreign matter or any other ingredients injurious to health and has to be packed in clean and sterile

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Both the PFA Act and BIS state that the water must be completely free of bacteria like salmonella, E-coli, faecal streptococci, v. cholera and shigella that cause a range of illnesses such as cholera, typhoid, dysentery and various types of gastro-enteritis

   

Both the PFA and BIS lay down standards for metals like lead, mercury, arsenic, aluminium and barium which cause a range of disorders The BIS lays down a minimum of 150mg/l and a maximum of 700 mg/l of TDS for mineral water. The PFA rules do not prescribe any minimum TDS levels but does mention the maximum of 1500mg/l There are no government laboratories for testing water samples for all the parameters involved

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9. Taxes & Advertising Strategies


The cost of processing the water is around 20-30 paise/litre the major cost is of the taxes Also the taxes are quite high. The taxes are as under:

SR.NO

Types of Taxes charged & cost incurred.

% contribution 4.5 7.5 15 10 12 2-3 40 --

1 2 3 4 5 6 7 8

Octroi Sales Tax Excise Transportation Distribution Margin CNFs Retailers Margin Advertising cost varies

ADVERTISING Advertising is any paid form of non-personal presentation & promotion of ideas, goods or services by an identified sponsor. Modes of advertising:  Newspapers, billboards, glow signs, banners, inflatable etc.  TV.  Mails.  Radio.  Magazines.  Yellow pages.  Newsletters.  Brochures.  Telephone.  Internet.

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10. Future Outlook


While the unimaginable growth rates of more than 60% and even 100% can be explained due to lower base the present growth rate of 25-30% is sustainable for another 5-6 years. Today the demand of bottled water is increasing at a much higher rate that that of carbonated soft drinks. The market size of bottled water too is expected to surpass the size of soft drinks market in near future. The next player which is waiting I wings to launch its brand in the market is Nestle. Nestle had made its intentions very clear about its prospective entry into the market early 2000. The company has already tasted success of its mass-market brand, Pure Life in developing countries like Pakistan and Mexico. The company is planning to launch the same brand in first quarter of the current year. 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. Britannia too evinced some initial interest in the market but now seems to have postponed its plans. 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's 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 o spread their network across the country. Already Coke has tied up with Yes for manufacturing of its brands in areas where it doesnt have presence. Though Coke and Pepsi have both, well established distribution network as well as bottling & manufacturing plants, they seems to be at an advantage but players like HLL and Nestle with strong financial muscle can easily turn the tables in their favour through acquisition route acquisitions. It is expected that the market would continue to grow at a healthy rate of 25-30% for few years from now and the market size too, is expected to increase to Rs17bn by 2004-5.

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Parle Bisleri chalks out Rs 260-cr growth thrust

Source : The Hindu Business Line MUMBAI, March 9 THE Rs 400-crore Parle Bisleri Ltd will be investing Rs 260 crore for expanding its facilities including its bottling capacity and distribution network. This investment is expected to facilitate the company to achieve a turnover target of Rs 1,000 crore by 2002, said Mr Ramesh Chauhan, Chairman, Parle Bisleri Ltd. The company will initially invest Rs 60 crore in expanding its bottling capacity from the current 50 million cases to 200 million cases a day. The additional Rs 200 crore will be invested in Bisleri's distribution network in the next years spanning 2,500 towns and cities in India. The fund requirement for this expansion plan will be met mainly through internal accruals; Mr Chauhan said adding that plans for going for an initial public offering would be taken up 2-3 years later if the need arises. Parle Bisleri currently has 25 bottling units, a fleet of 2,000 vehicles and 1,20,000 retail outlets spread across the country. The company is targeting a distribution network of 10 lakh retail outlets backed by a fleet of about 5,000 vehicles over the next two years. The Bisleri brand, which holds a 60 per cent market share in the country's Rs 700-crore branded mineral water industry, is growing at 70 per cent per annum, Mr Chauhan said. The company has introduced home delivery facility for its 20-litre pack which will be delivered by a specially designed fleet, Mr Chauhan said. He said the company is targeting a turnover of Rs 50 crore from its 20-litre jumbo economy pack segment in the first year. This facility will be extended to 50 more centres over the next six months. Unperturbed by the stiff competition from multinational companies, Mr Chauhan said Bisleri has been growing geographically. The company now plans to enter areas such as Kerala and Madhya Pradesh where Bisleri's presence is negligible. Pic.: Mr Ramesh Chauhan, Chairman, Parle Bisleri Ltd, at a press conference with the 20-litre mineral water jar.
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11. Conclusion
After seeing the different sales trends and market shares graphs, one can easily derive that at present the foreign brands like Kinley & Aquafina are going share equally the market share and the Indian companies like Bisleri & Bailey who show a good market share would surely come down as the modern marketing skills and technologies used by Coke & Pepsi would cover the large part of the market.

After the cola wars now as Manikchand is entering it is going to be water wars. With Manikchand entering the industry with its excellent marketing staff, latest technology & the financial strength I can see the shares of Kinley & Bisleri going down & Manikchand is becoming the future leader after three yrs from launch.

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