New Delhi: Leading pharmacy and retail chains are considering launching their own bottled water brands, seeking to tap a Rs1,000 crore market that’s expanding as urban consumers and foreign visitors seek safe drinking water.
Aditya Birla Retail Ltd, Apollo Pharmacy and Guardian Lifecare Pvt. Ltd are among the companies that are evaluating the market, joining Vishal Retail Ltd, which launched its own water brand last year.
Aditya Birla Retail is considering the timing, brand name and potential profitability of its offering, said a person close to the development, who didn’t want to be named. A company spokeswoman declined to share details of the plan.
Apollo Pharmacy, the pharma retail unit of Apollo Hospitals Group, is likely to soon announce the launch of a bottled water brand.
“We are working on the plan and in the next two months, we are preparing for the launch. The pricing could be at par with the existing brands in the market,” said a company official, who didn’t want to be identified.
Growing market: Bottled water on sale at Connaught Place, New Delhi. Rajeev Dabral / Mint
Guardian Lifecare is also assessing its entry into the branded water market. “We will surely launch bottled water,” said a senior company official.
According to industry estimates, the packaged water industry in India is currently estimated at Rs1,250 crore. Of this, the branded water segment accounts for nearly Rs1,000 crore and is growing at an annual pace of 10-15%. Growing awareness about drinking water safety among urban residents and increasing tourist traffic is spurring the market in a country where tap water is rarely potable.
“If retail chains come up with their own brands, they will have the advantages of getting the product at the best possible procurement price, brand to propagate retail chain, healthy profit margins, direct linkage from manufacturing and retail, logistical advantages and freedom to have (their) own bottle and label designs,” said Tushar Trivedi, founder of www.bottledwaterindia.org, a web portal that provides information about the industry.
Companies that are seeking to cash in on the growth of the bottled water market would likely sub-contract manufacturing, instead of setting up their own units.
Vishal Retail, which launched packaged water under the V-Fresh brand a year ago, sells around 250,000 a year at its retail outlets.
“Selling our own brand of water at Rs7 per litre helps us enhance our brand equity and pass on the benefit to the consumers,” said Kushagra Seth, head of marketing at Vishal Retail.
Even state-run Indian Railway Catering and Tourism Corporation, or IRCTC, produces 132,000 bottles of Rail Neer per day at its two plants in Nangloi near Delhi and in Patna. To meet demand for drinking water from train passengers, IRCTC is also setting up two additional plants near Chennai and Mumbai, said an official spokesman.
The bottled water business comprises of natural mineral water and packaged drinking water.
Natural mineral water brands include Evian, which is imported, Himalayan from Tata group’s Mount Everest Mineral Water Ltd and Catch from the DS Group. Packaged drinking water includes brands such as Bisleri International Pvt. Ltd’s Bisleri, Coca-Cola India Ltd’s Kinley, PepsiCo India Holdings Ltd’s Aquafina and UB Group’s McDowell’s No.1.