India’s largest packaged water company Bisleri International Pvt. Ltd is to enter value-added water business. The company will launch flavoured packaged drinking water in the country by March next year.
“We are conducting research and development with at least 12 fruit flavours, such as nimbu paani, strawberry and orange, for flavoured water. We aim to launch it by March next year,” said Ramesh Chauhan, chairman, Bisleri.
According to Datamonitor Plc., a UK-based consumer research firm that tracks various sectors in India, the flavoured water market was estimated to be around $50 million (Rs196 crore) in 2006 and is expected to grow to $70 million by 2010.
With the move, Bisleri aims to strengthen its position in a space in which other leading beverage companies have also evinced interest. Companies such as Coca-Cola India Inc., PepsiCo India Holdings Pvt. Ltd and Tata Tea Ltd, also plan to enter the flavoured water business. So far, there is only one prominent player, DS Foods, in the segment. Its brand, Catch, is priced at Rs30. “The flavoured water market is still at a nascent stage in India. Higher price, limited products and alternative home-made products are some of the barriers for the growth of this segment,” said Puneet Bansal, senior analyst with Datamonitor.
Bisleri’s focus on premium segment, however, is part of its strategy to tap higher-margin opportunities in the packaged water business. Last year, it had launched a premium water brand Mountain Water, which currently contributes 25-30% to its total sales. The company plans to launch this brand in Europe soon.
“We are in talks with several distributors in Europe to launch our premium water there. The deal is expected to go through by December this year,” said Chauhan. The company also plans to tweak its packaging and look to give it an international appeal and compete with biggies such as Nestle and Groupe Danone.
The moves, said Chauhan, are aimed at trebling Bisleri’s sales from around Rs300 crore now, to Rs1,000 crore by 2009. To push its sales, the company is also planning to double its distribution network from 800 distributors this year to around 1,500 in the next six months. Also, the company plans to double its capacity of one million bottles a day through adding more contract packers and upgrading its bottling capacity.
Meanwhile, the company continues to rule the conventional bottled water segment. It said that for October, it registered sale of 2.66 million cases across the country against 1.79 million cases sold in the same month last year.
Chauhan also dismissed speculation that he may sell out his water business.
He said Bisleri was doing well and he had no plans to sell it out.
“We might have sold our carbonated brands, including Thums-Up, Limca and Gold Spot, due to a lack of choice. But, now I am in a position to build and sustain Bisleri and will not sell it at any cost,”he added.