Liquid Gold: Exploring India's Thriving Bottled Water Industry

indian bottled water market

The Indian bottled water industry was stagnant until 1991, with an annual demand of less than two million cases and bottled water considered a luxury. However, everything changed with the economic liberalization process in 1991. Since then, the industry has witnessed remarkable growth, and today, India's per capita consumption of bottled water has surpassed 70 liters in the 2022-23 period.

According to estimates by IKON, the Indian bottled water market has been experiencing a robust double-digit Compound Annual Growth Rate (CAGR) over the past four years and is now valued at over Rs 700 billion. Despite a significant setback of nearly 30% due to the COVID-19 pandemic, the market quickly bounced back as the Indian economy gradually returned to its track.

The post-COVID era has emphasized the importance of health and hygiene, further propelling the consumption of bottled water. Indian consumers view bottled water as a safe and worthwhile expenditure, and this perception has become more pronounced in recent times.

While the market is regulated, both organized and unorganized players have contributed to its growth. Organized players are well-established companies with recognized brands and structured operations. They adhere to regulatory standards and offer various packaging options. Currently, organized players control only 25% of the market, with the top 7 players being Bisleri, Kinley, Aquafina, Bailley, Rail Neer, Clear, and Oxyrich. The remaining 75% is dominated by unorganized players, and there has been a mushroom growth of unregistered 20-liter water plants across India. This proliferation of unregistered plants poses potential quality and safety concerns for consumers.

In recent years, unorganized players, primarily in tier II, III, and small towns, have expanded their reach into rural areas, prompting national players to deepen their market penetration. The presence of more than 6000 BIS (Bureau of Indian Standards) registered plants in India assures consumers of a certain level of quality and safety in bottled water production.

Among the organized players, Bisleri remains the market leader, holding a 30% market share, followed closely by Kinley and Aquafina. Other brands like Clear, Rail Neer, and Oxyrich collectively hold a smaller market share. Bisleri stands out with the highest number of production plants, followed by Bailley, which operates on a franchise model. The market is highly competitive due to low entry barriers, emphasizing the need for quality products, a robust distribution network, and a strong brand image to survive.

The Indian bottled water market follows two primary business models. The first is Home and Office Delivery (HOD), supplying bulk pack bottles of 5, 10, 20, and 25 liters. The second model involves retail sales directly to consumers in 1-liter, 2-liter, and smaller-sized bottles (e.g., 250ml to 500ml), primarily through convenience and grocery stores, malls, medical stores, bus and railway stations, and small local shops. General trade remains the preferred distribution channel for packaged drinking water, followed by the HORECA (Hotels, Restaurants, and Catering) segment. Although online sales are still in their infancy in India, they are expected to grow in the coming years.

In conclusion, the Indian bottled water industry's growth and recovery are closely tied to the economic trajectory of the country, with the presence of both registered and unregistered plants contributing to the market's dynamics. Ensuring quality and safety standards across all production facilities will be essential as the industry charts its future course.

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