The Indian bottled water industry has witnessed an unprecedented boom in recent years, owing to the improvement in living standards of the middle class and a significant increase in their disposable incomes. With the increase in awareness about health benefits of natural mineral water, this segment of bottled water industry is going to take major stand in coming decade.
According to recent research by IKON Marketing Consultants, Indian Natural Mineral Water market was worth Rs 187 Cr during 2009 -10 and growing at CAGR of 21%, which will cross Rs 10 billion mark in current decade. The increasing awareness about health consciousness and health benefits of the natural mineral water along with the rise in purchasing power among the Indian consumers will speed up the growth of natural mineral water market in near future.
Based on cost, the formal mineral water bottle business in India is broadly divided into three segments: premium natural mineral water, natural mineral water and packaged drinking water. The origin and processing of different types of bottled water makes them quite different in content and taste. Particularly the natural mineral water is priced with premium and positioned as premium market segment currently shared and dominated by leading Indian food and beverages companies like TATA, Bisleri India Pvt. Ltd, Sheelpe Enterprise, Luthra Water Systems Pvt Ltd, DS group, Narang Group etc as well as well known imported international brands like Evian, Perrier, San Pellegrino. Majority of Indian players are sourcing natural water from Himalayan Mountain range, mostly bottled at source without any further treatment.
The industry is regulated by Beauro of Indian standards under IS 13428:2005. Currently 2721 licenses have been granted for packaged drinking water and 17 for packaged natural mineral water as per Beauro of Indian Standards. Among which one is for foreign brand i.e. Evian, 1 from Gujarat, 11 from Himachal Pradesh, 1 from Uttar Pradesh and 3 from Uttrakhand.
Considering the growth state of the market, low entry barriers and realizing the hidden market potential, sooner or later the competition is going to be stiff in this segment of bottled water market, however the intensity will not be as that of the packaged mineral water segment. This segment requires quality product with good distribution network and brand image which makes bit difficult for new entrant to stay in the battle field. Generally the existing players in this segment are serving in region specific market and competing with each other. Only few giant food and beverages companies like TATA and Bisleri with their added advantage of wide distribution network and brand name takes on challenge to serve all over India.
According to research by IKON Marketing Consultants, Bisleri being the market leader in bottled water is also enjoying the leading position with its Vedica brand in natural mineral water segment capturing highest market share where as TATA’s Himalayan stands second. Only these two brands have pan India market presence. Gujarat based Aava and Maharashtra based Mulshi spring with considerable market share holds strong market presence in western India.
For the natural mineral water, 90% of sales comprises from the institutional sales & only 10% from retails sales. Among the leading players all are expecting annual average sales growth of around 10% in the coming year considering market driving factors such as increase in awareness about natural mineral water and its health benefits, increase in high profile customers who prefers to buy only premium natural mineral water and increase in air travelers. Also Indian hotel industry is growing at fast pace. As per the leading players, increases in awareness about natural mineral will definitely have positive impact on the growth of the Industry, concluded in the said research by IKON Marketing Consultants.
Western part of India occupies 41% chunk of the total market. Particularly western states Gujarat and Maharashtra have high consumption of natural mineral water; also the leading players like Vedica, Himalayan, Aava & Qua have strong market presence in the region. For any new players there will be tough competition in western part of India.
“Though market is growing at considerable rate, still opportunities are available for innovation in marketing strategy specifically in promotion and distribution strategy to harness the full potential of this segment of bottled water market which will ultimately lead to industry growth with fast pace and may capture 50% share of industry size in coming years.” Said Azaz Motiwala, Founder & Principal Consultant at IKON Marketing Consultants.
Also future market potential can be harnessed by the leading players with the increase in the number of high end consumers as Indian consumer becoming more heath conscious and is now known as spender than saver as it was earlier.