labels: coca cola india, pepsi india, soft drinks, marketing - general
Water wars news
Mohini Bhatnagar
29 January 2003

Mumbai: With the entry of beverages multinational PepsiCo into the bulk water market it looks as if the water market is likely to witness some action soon.

The bulk water market includes the home and office delivery of water, dispensed from coolers, as well as the gallon or large-sized bottled water sold from retail stores, while the beverages water market consists of the single-serve pack. Personal beverage products range in size from 500 ml through 2 litres.

The bulk water business accounts for over 40 per cent of the Rs 1,000 crore water market.

PepsiCo chairman Rajeev Bakshi says the bulk water business is a low-volume, but a high-value, category and is now growing faster than the retail segment, attracting a number of major players.

PepsiCo India launched the packaged water bottle brand Aquafina about two-and-a-half years ago, in a 750-ml pack. The brand now retails in conventional retail pack sizes of 500-ml and 1-litre bottles.

Sources say PepsiCo India has been investing in additional capacity at its plants in Bangalore and Chennai for the bulk water foray and, though details of the venture have not been finalised, the soft drinks major is expected to introduce the product under the Aquafina brand.

Pepsi’s Aquafina water, in bulk packs of 20 litres, is expected to hit the market after a couple of months. It will be up against stiff competition from Parle’s Bisleri and Coca-Cola India’s Kinley.

The first entrant in the bulk water category was Bisleri, while Coke, through Kinley, entered the segment two years ago. Over the past five years or so, Bisleri has become a major player in the bulk water segment in the water-starved southern states.

Parle Bisleri chairman Ramesh Chauhan has gone on record saying the bulk water market would spearhead Bisleri’s growth over the next few years and would account for 80 per cent of the company’s branded water business within the next five years (double of what it is now).

About a month ago, Bisleri announced the re-launch of its 20-litre home pack with a more “consumer-friendly format” in thread fitting and valve cap, against the conventional snap-on fittings. The existing 20-litre Bisleri packs are now being withdrawn and the rollout of the new jars, priced between Rs 40-60, is on.

Bisleri’s focus on the bulk water market has grown in the past few years, mainly owing to the stiff competition posed by innumerable brands in the packaged bottled water market. Not only are there big multinational players like Coke with their huge distribution networks, regional players exist side by side, enjoying local clout.

While Kinley claims leadership in the retail packaged water segment with a 37-per cent market share, about 6-percentage points ahead of Bisleri, the company has been aggressively pushing its 20-litre bulk business. Two years ago, Coke acquired the businesses of existing packaged drinking water brands across major cities.

In Delhi and Pune, the company finalised a tie-up with Nuchem Weir and Thermax Culligan Water Technologies, after which their respective brands Krystal and Good Water were withdrawn. In Kolkata, a similar contract was signed with a Bisleri franchisee, and with SR Minerals in Chennai, which was earlier marketing the Hello brand in the city.

In Hyderabad, Coke again signed a contract with the distributors of the Hello brand. Not only this, it set up a manufacturing plant through a tie-up with Mittals Himjal Beverages to manufacture Kinley in pack sizes of 500-ml, l-litre, 2-litre and 25-litre jars. Coke is providing financial assistance and the technological know-how for the project.

Aquafina’s market share in the retail segment is estimated at about 12 per cent and it remains to be seen how PepsiCo succeeds in penetrating the bulk water market.


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