Safety in a Bottle
Unknown just three decades ago, ‘mineral water’ is today ubiquitous in India. Packaged drinking water is a Rs 6,000-crore industry with brands like Bisleri, Kinley and Aquafina becoming household names. Even in the early 1990s, the per capita annual consumption of bottled water was a mere four to five litres. It has since risen to more than 20 litres. The industry is growing at a compound annual growth rate of 22 per cent and expected to touch Rs 16,000 crore by 2018, according to market intelligence firm, ValueNotes.
“The public perception that bottled water is pure and safe, fuelled by intense advertising, led to the sales explosion,” says Arun Jethmalani, Managing Director, ValueNotes. “The increase in the number of tourists, both foreign and domestic, gave it a further fillip.” The demand is all-weather, with seasons making only marginal difference. “There is a peak in summer no doubt, but sales are high during the monsoons, too, due to fear of diseases from unsafe water, as well as in winter because it is the festive season,” says Ramesh Chauhan, Chairman, Bisleri International, the pioneer and still the lead player in this sector.
A 2013 study by ValueNotes shows that 35 per cent of packaged water consumption takes place in Western India, 30 per cent in the South, 25 per cent in the North and the remaining in the East. While the southern states have the maximum number of registered players – 3,300, or 48 per cent of the total – the big boys like Bisleri, PepsiCo, Coca-Cola and Parle Agro are all headquartered in Mumbai. The profusion of marginal players is not necessarily healthy. “Many of them have little concern for quality standards and procedures,” says Jethmalani. The bigger players are strengthening their distribution networks to improve sales as well as innovating with the size of their bottles and jars. “We keep innovating with concepts like the ‘Rocking Jar’ which makes it is easier to carry five litres of water,” says Chauhan.
Alongside bottled drinking water, water purifiers for home use are also spreading rapidly. ValueNotes estimated this segment at Rs 3,400 crore in 2014, having grown at a CAGR of 20 per cent in the three previous years. It is expected to reach Rs 91,900 crore by 2019. “With the water table falling, groundwater is being drawn from much deeper in the earth than before, thus carrying more impurities, the importance of water purifiers has increased,” says Marzin R. Shroff, CEO, Eureka Forbes.
Marginal players are fewer in this segment than in bottled water, with 75 per cent of the market held by well-known brands like Eureka Forbes, Kent RO, Hindustan Unilever, Tata Chemicals and Ion Exchange. Water purifiers are broadly of three kinds: those using reverse osmosis (RO), those employing ultraviolet radiation (UV) and those using a bed of sediment (offline). RO purifiers contribute the most – 39 per cent by value – to the market, being the most expensive.
Numerous innovations have been introduced, such as a combination of UV and RO technologies, which are available at prices of Rs 17,000-18,000, while the average UV purifier costs less than Rs 10,000. “Water purification needs in India vary widely according to regions,” says Shenoy of Dow India. “We are working with our partners to provide different cost effective solutions for different markets.”