Sales of bottled water are set to overtake carbonated drinks globally over the next two years, according to a new survey. Ramesh Chauhan, Chairman and Managing Director, Bisleri International, insists that bottled water has triumphed the leading soft drinks category in India more than three years ago.
“It is not that India is ahead of the world in terms of delivering more dirty water to its populace, though it is getting from bad to worse here. In terms of retail sales though, bottled water sales have long outpaced cold drinks here,” says Chauhan.
He adds, “Companies such as Aquaguard (water filter from Eureka Forbes) are actually helping increase our business. They are confirming the consumer’s fear that water is not safe to drink anymore.”
On May 15, Eureka Forbes, part of the Shapoorji Pallonji Group, announced that it would increase its stake in Switzerland-based Lux International, with an aim to double its turnover to over $1 billion by 2017.
Shapoor Mistry, Chairman, Eureka Forbes, is the elder brother of Tata Group Chairman Cyrus Mistry. Incidentally, the Tata Group competes with Eureka Forbes in the water purifier business, with its Swach brand of water purifiers.
Bilseri’s Chauhan is nonplussed. “The Tata water business is of no significance. Aquaguard business is of no consequence. These are very small players, though big machine-wise. Our only competitor is our own incompetence,” says the sprightly 72-year-old.
“It is one thing to sell machines and another to sell pure drinking water,” he says, adding, “The water business is a huge market, though there are a lot of unorganised and small players with their own brands. It is not every man’s cup of tea.”
Chauhan, who once built iconic brands such as Goldspot, Thums Up, Limca and Maaza, which he sold to Coca-Cola in 1993, says with over 50 manufacturing plants in India, the company is not resting on its laurels.
“We are putting up new factories every month. Our basic goal is to have 12 new plants in 12 months, one plant each month. We are on the ball,” says Chauhan.
New factories
After opening up a plant in Ahmedabad last month, Bisleri plans to open a few in Hyderabad and Vizag early next month.
Incidentally, data from beverage market research company Canadean underscores the need for more water plants in India. Canadean research has indicated that the Asian region already absorbs one in every three litres of packaged water consumed globally, though per capita intake remains well below the international average.
Volume sales in Asia are predicted to rise by 16 per cent in 2013, which is more than twice the global rate of increase. Canadean’s research shows that India is also seeing ‘dynamic advances’, with growth at well over 20 per cent a year.
While progress has been partly driven by packaged water’s improved value offering, the research shows that consumers tend to switch from soft drinks, where prices have risen steeply, to bottled water, which has also benefited from its intrinsic low calorie proposition relative to other mainstream soft drinks.