During my school days in Chennai (Madras), when I used to play cricket on the roadside, I just had to reach out next door for gulping some water to quench my thirst. But nowadays the situation is totally different, you will definitely find the next door, but with a cost, a sachet of 200ml water would cost you not less than a rupee with no guarantee that it’s the safest water that is fit to drink.
India is set to become the third largest economy after the US & China by the year 2020 with its current growth rate. Given the scenario, I would say boom times are ahead for packaged drinking water. As per the available data the total number of ISI certified packaged drinking water companies in India are close to 1450; and unauthorized companies are over 2000. In India the southern state of Tamil Nadu is the biggest market. Roughly, in Tamil Nadu alone there are about 450 authorized and 300+ unauthorized companies selling water to this water scarce state and making one-fourth of total sales in India.
The current Indian market size of bottled water industry is Rs. 18 billion and is poised to grow at a staggering rate of 40 percent per annum.
The history of bottled drinking water dates back to the year 1583. The Romans are said to be the inventors of bottled drinking water, who first exported it to King Henry II of France. It became more popular in the West during the 1920s and developed rapidly.
In India, bottled/packaged water is still not perceived as a product for masses; so what, look at the facts, it gives you a totally different picture. It is the world’s fastest growing market, the per-capita bottled water consumption is less than five liters a year as compared to the global average of 24 liters.
The industry has seen many new entrants, year on year several small players have entered the trade in India to capitalize on the craze, there has hardly been any involvement of statutory body in defining specific standards. Recently, the Bureau of Indian Standards (BIS), the highest governing authority in India, has got involved in the process to provide check on the new entrants. Some serious doubts also have been raised about the safety of so-called bottled water available.
The new entrants with their low pricing and aggressive marketing strategy, are here to capture the huge middle class population of our country, I would be wrong in saying middle class, infact its all section of people who are being targeted. Can you believe that in a survey conducted it has found that truck drivers form major consumers of packaged drinking water? Penetration in rural areas is another significant factor that is likely to play a key role in the development of the bottled water trade.
In comparison to global standards India’s bottled water segment is largely unregulated. However, with the stringent measures adopted by BIS would make this industry a more regulated and would see more growth in the near future.
By Vijai Kumar G
Monday, February 18, 2008
Boom Times Ahead for Packaged Drinking Water
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6 comments:
Its interesting that this post should come at a time exactly when there has been a lot of chatter on a B School alum yahoo group that I belong to, on "Bottled Water Bullshit"...For those of you who want to understand why, pls see this:
http://www.youtube.com/watch?v=B0fZK3m7bDc
Per on of my friends, " I think one brand, Dasani perhaps?, does admit that its bottled
water's source is the tap.
I saw on TV that some restaurant in NY had bottled water sommeliers!"
Hmmm!!! interesting facts, one thing is pretty sure, it would create a lot of job opportunities. Its amazing to know that truck drivers are the major consumers of bottled water.. trying to keep track on this blog to have some interesting comments
Agreed with the facts that these firms are growing at faster pace but i am also assuming that the price per bottle would increase in the near future irrespective of deregulated market with lots of players as many Indian continents are facing water scarcity specially the south side!
Hello Vijay.. Interesting.... As you have stated around 50% of the players are Unorgonized, I would say regulations would play a major role in this sector in the near future.. Due to the Scarcity of Water & increasing competition, there would be a chance of players compromising on the quality of water.....
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