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Chapter 13 (Bottled Water)

The document provides an overview of the packaged drinking water market in India. It discusses the phenomenal growth in demand for bottled water from 1990-2005. Key points include: - The market grew at over 20% annually with annual revenues over Rs. 12 billion and more than 180 brands - Per capita consumption of bottled water is much lower in India (less than half a liter) than other countries like the US (45 liters) and France (111 liters) - The four major players in the market are Coca-Cola's Kinley, Parle's Bisleri, PepsiCo's Aquafina, and Parle Agro's Bailley, which together

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Prasad Zalaki
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33 views24 pages

Chapter 13 (Bottled Water)

The document provides an overview of the packaged drinking water market in India. It discusses the phenomenal growth in demand for bottled water from 1990-2005. Key points include: - The market grew at over 20% annually with annual revenues over Rs. 12 billion and more than 180 brands - Per capita consumption of bottled water is much lower in India (less than half a liter) than other countries like the US (45 liters) and France (111 liters) - The four major players in the market are Coca-Cola's Kinley, Parle's Bisleri, PepsiCo's Aquafina, and Parle Agro's Bailley, which together

Uploaded by

Prasad Zalaki
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 24

Packaged Drinking Water

1
Introduction

 Phenomenal increase in demand for bottled water from


just 2.0 mn cases in 1990-91 to 76 mn cases in 2004-05
 Market growth rate of more than 20% a year
 Annual revenues of more than Rs 12 billion
 More than 180 brands in the unorganized sector.
 Per capita consumption (per year) of bottled water
• India - less than half a litre
• US - 45 litres
• France - 111 litres
2
Demand Drivers

 Tourism
 Emergence of BPO and call centers
 Growth in food industry
 Water pollution
 Awareness and standard of living

3
Segmentation

 Customers
• Individual buyer
• Bulk buyer

4
Trends
 Manufacturing and packaging
• New SKU’s such as cups
• Jumbo home pack with spout

 Core consumers

• Shift from 1 ltr bottles to 2 ltrs, to 5 ltrs, 20 litre pack,


to ½ litre to 300ml bottles and now packet pouches
 Consolidation and expansion

• Coca Cola’s purchase of Good Water


• Parle investing Rs 2600 million in a new facility
5
Trends

Market Segmentation Share (%)

80
70
60
50
Market Segmentation
40
%

Share (%)
30
20
10
0
Domestic Institutional
Segment

6
Market Growth

Demand : Past & Future mn cases

300
Cases (m n.)

250
200
150
100
50
0

Demand : Past
& Future mn
Year cases

7
Competitive Scenario
Brand Company 2001 2002 2003 2004

Kinley Coca-Cola India Pvt Ltd 30.5 32.0 37.5 37.0

Bisleri Parle Bisleri Ltd 39.0 31.0 31.0 30.5


PepsiCo India Holdings
Aquafina 13.5 13.0 15.5 15.0
Pvt Ltd
Bailley Parle Agro Pvt Ltd 6.0 6.0 7.0 7.5

Private Label 1.0 2.0 2.0 2.0

Others 10.0 16.0 7.0 8.0

Total 100.0 100.0 100.0 100.0


8
Coca-Cola’s Kinley

9
Business Model

 Contract packing deals struck throughout the country


 Large number of takeovers in the large metros to
increase capacity
 Coca-Cola has 27 plants of which 8 are 100% owned
by CCI, 5 are with franchisees and 14 are of co-
packers
 Riding on the national Coca-Cola distribution
network

10
Competitive Positioning

 Kinley’s slogan, ‘boond boond mein vishwas’

 Capitalized on the unreliability of ordinary piped


drinking water

 Targeted towards families and homes

11
Parle’s Bisleri

12
Business Model
 Parle Bisleri had 25 bottling units, a fleet of 2000
vehicles and 120,000 retail outlets spread across the
country.
 Dual distribution strategy - penetrating smaller,
interior markets in rural India, and pushing the brand
in newer territories and roadside stalls in the metros.
 Within the institutional segment, hotels, railway
stations and government offices are being tapped with
increased aggression now.
13
Competitive Positioning
 Does not presently have the ability to compete against the
multinationals on distribution or advertising.
 Instead developing the 20 litre bulk water business
• Tender-driven supply deals, which guarantee a certain volume
off-take but do not necessarily deliver much value.
 Three strategies being followed:
• Strength distribution in rural areas and explore new territories
• Competitive pricing
• Innovative packaging
 Shifted from its initial “Pure and Safe” positioning to a
new “Play Safe” positioning.
14
PepsiCo’s Aquafina

15
Business Model

 Uses its distribution strength in carbonated brands to


push its fruit juice brands as well as bottled water via
the on-trade channel.

 Exclusive contracts with many outlets and clubs


throughout the country.

16
Competitive Positioning

 Pepsi is India's highest selling brand of carbonates, as


well as the most popular soft drink overall.

 Strongly identified with energy and sports.

17
Parle Agro’s Bailley

18
Business Model
 Bailley’s price was higher than its competitors’ because it
brings its products from outside the city, for which it has
to pay an entry tax, the octroi.
 It has set up a PET plant in Silvassa, with an investment
of Rs120 million.
• A new 30 mm exclusive neck for the PET bottles, which cannot
easily be duplicated, in an effort to fight the counterfeit trade.
 It moved into bulk sales of 5 litres and 20 litres, with its
biggest sales areas being water-starved cities such as
Chennai in the South.
19
Competitive Positioning
 The company re-launched Bailley in smaller bottles
and pouches.
• Arrangements with Jet Airways to supply 200 ml bottles
for the airline's in-flight customers.
• A 330 ml bottle, priced at Rs 5, is targeted at
schoolchildren.
• A pouch of 200 ml priced at Re 1 is intended to introduce
bottled water to the masses.
 A new value-added mineral water brand called
Bailley Plus is to be launched soon. 20
New Entrants

 Kingfisher from United Breweries Ltd.

 McDowell’s No 1 mineral water from McDowell &


Co Ltd.

 Indian Railway Catering and Tourism Corporation


(IRCTC), a division of Indian railways, expanded the
network of its own brand of bottled water, Rail Neer.
21
A Case Study
 Brands launched
• Premium upmarket brands
­ The internationally renowned Perrier
­ The sparkling mineral water brand, San Pellegrino
• Pure Life, the mass market bottled water brand
­ Initially positioned on the purity plank and targeted at ‘family’
­ Modified later and repositioned on the ‘stay active and fitness’
platform
­ Priced at Rs 12 (higher than Kinley and Aquafina)
 Portfolio taken off market in 2003 – Why?
• Inadequate distribution infrastructure
• Poor returns due to low margins 22
Critical Success Factors
 Sales and distribution
• No. of channels
• Influence over channel members
 Cost control
• Value proposition
• Marketing budgets
 Scale and size
• Economies of scale
• Bargaining power
 Innovative packaging
 Quality standards of product 23
No, Break now!

24

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