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If fizzy colas were not enough, as summer approaches, the market is all set to witness a tough battle in the packaged bottled water segment too. Bisleri, Kinley, Aquafina, Himalyan and a host of regional and local players have jumped into action. May the ‘purest’ marketer win, says PAWAN CHABRA
Western Express Highway in Mumbai has been the route to success for two well-known men. One was the make-believe super biker cum thief Kabir aka John Abraham in the Bollywood flick Dhoom; and the other is the crafty Ramesh Chauhan, who has masterminded the runaway success of the Rs.500 crore bottled water brand, Bisleri in the country, from his 1st floor office in the sprawling aqua green Bisleri facility on this highway.
Chauhan may be short, stocky and nearing 70, but his enthusiasm and vibrancy over the years has not diminished an iota. After all, despite the entry of a slew of MNCs (including Coca- Cola with Kinley and PepsiCo with Aquafina) and their cutting edge marketing gimmicks, Chauhan has not lost his first mover advantage in the segment. He has been able to sustain and grow his market share in the over Rs.2000 crore Indian bottled water mart. “We have no competitor. Our biggest competition is our own incompetence,” he grins, describing how it is the unorganised sector, which is presently walking away with the largest chunk of their potential consumers. Bisleri claims 66% market share of the organised segment. “If we were present where the unorganised players are selling, they would not be there at all,” grimaces Chauhan.
He’s not too far off the mark. Till last year, the number of bottled water licences issued by the Bureau of Indian Standards (BIS) were above 1800. But while the figure includes a host of regional players, it also includes MNCs like Kinley & Aquafina; as also domestic giants aka Bailey (Parle Agro) and Himalayan (acquired by Ratan Tata last year). While the regional players may be sweating it out in their home turfs, the national biggies are fully geared up to wrestle it out with Bisleri in the Indian bottled water combat zone.
And as the weather in the country is getting hotter by the day, so is the competition in the Indian bottled water market. Says Homi Battiwalla, Vice President, Emerging Categories, PepsiCo India, “We are among the top three players in the packaged retail water business. This year, we have aggressive plans for Aquafina and will be focusing on consumer engagement.” At the start of the year, PepsiCo revamped Aquafina’s 500 ml carry pack for the Indian market, giving it an an enhanced translucent blue label to entice consumers. Starting April end, the soft drink company will also replace all existing packs of Aquafina, with new labels. “Packaged bottled water is a low margin game and is more or less an impulse purchase even today, so marketing plays a crucial role,” avers Abhishek Jain, Research Head Stocksidea.com.
PepsiCo is not alone in upping its competitive antennae. Kinley, the second biggest bottled water brand in India, from the Coca-Cola stable, is also going great guns. The beverages giant is now giving final touches to launch BonAqua in India, another packaged water brand from its global portfolio. The bid is to position BonAqua in the premium segment – to take on Bisleri’s recently launched variant called Bisleri Himalayan Water, which is positioned in the premium segment. Coca-Cola India is banking on modern trade to give its premium brand the requisite fillip.
Analysts opine that with Ratan Tata at its helm now, even Himalayan (which operates in the premium segment) should be preparing to up its stakes in the bottled water mart. Nearly 70% of the market share in this niche segment is held by Himalayan. The brand is also a clear leader in the institutional sales segment, where its USP of being ‘packed at source’ has helped Himalayan considerably. “Himalayan is packed at the source and its composition is entirely different as compared to other brands in the industry,” opines Jain. With both Bisleri & Coca-Cola giving a shot at this premium segment, institutional sales of premium bottled water can well emerge as a high potential market for the industry in coming times.
Coming back to the mass packaged water segment, in a business where distribution plays a vital role, Bisleri’s slow and steady market expansion since 1969 has given it an upper hand vis-à-vis competition. Sources in the industry agree that distribution can help this impulse purchase product like no other marketing activity can, including advertising. Bisleri boasts over 50 manufacturing plants across the country (ahead of competition), the latest addition being at Andaman & Nicobar islands. “The more plants you have, the more is your distribution reach. For this low margin biz to be viable, plants need to be within a 150-200 km radius of the distribution circle,” explains Ruchika Desai, Brand Manager, Bisleri.
On the other hand, thanks to their soft drink business, Aquafina & Kinley have managed to capture an altogether different distribution channel, that of modern retail formats. Chauhan minces no words, when he launches an attack against them. “Kinley & Aquafina have a total dissolved solids level (TDS) of less than five (where zero TDS stands for distilled water) and Bombay Municipal water has 40 TDS. So, Municipal water is much better in terms of minerals.” Easy to say, but tough to digest without scientific laboratory tests. Given that for the average consumer there is hardly any differentiation between various bottled water brands, Bisleri constantly needs to be on its toes to protect its market leadership. Chauhan evinces his company’s plans to launch a slew of product extensions soon, including flavoured water.
For sure, as the summer of 2008 approaches, the battle between the bottled water majors for market share is going to get hotter. Bottom line is – how quickly can these players grab consumer attention and bottle up his impulse spending for thirst quenching.
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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