What's changed the dull market that for over 25 years saw virtually no action with one brand called Bisleri, one clientele as in foreign tourists and one packaging concept—a standard one litre PVC bottle? The mineral water market, growing robustly at 35 to 50 per cent a year, and estimated to hit a whopping Rs 250-300 crore in 1996-97, is divided into two segments. The first—and traditional—is the one litre bottle segment with a hoard of companies fighting for elbow space, from Parle Exports (Bisleri) to SKN Breweries (Penguin). In Delhi, alone, there are about 35 players and the national figure is put at around 80.
Marketing here is focussed on travellers, office-goers, embassy staff and hotel guests. The key to success is efficient distribution and retail logistics. In the absence of any distinct USP for any brand, marketers concentrate primarily on high retail margins and other incentives. "It is push rather than pull that would determine success," points out S.K. Jetley, general manager, marketing, at Super Cassettes which has recently launched the Ganga brand. However others like Indo-Canadian Enterprises for instance are confident of creating a pull factor via superior quality processing and packaging. This market is likely to remain in a fluid state and see a lot of action as its primary target is the floating population and as yet there are no BIS regulations to demarcate the spurious players from the committed ones. "There will, however, be a shakeout as serious players invest in brand building and distribution network," points out Tushar Trivedi, director, operations, at Indo-Canadian Enterprises that launched its brand Ice about a year ago.
The second segment comprises the bulk packaging mineral water companies like Hello Marketing and Nuchem Weir that aim to fight the battle for water in offices, institutions and Indian homes and provide the real threat to the water purifier category. It is completely different in all aspects from the bottled water segment. This is where the really interesting marketing battles will take place. This is the category that might prove to be a threat to traditional water purifiers.
For one, old favourite Aquaguard—or rival Crystal Clear from Symphony—has three inherent shortcomings. These purifiers need a continuous supply of tap water which is hardly available everywhere. Ditto for electricity, another prerequisite. Also, filtration through the ultraviolet process deactivates bacteria allowing it to grow after a gap of five to six hours. Therefore, if you store Aquaguard water in a container, the effect of the contraption could be negated after four to five hours.
Enter mineral water dispensers. These come in a variety of shapes, sizes and price. The simplest is the 12-litre polycarbonate bottle fitted with a tap and stand, while themost complex is the hot and cold water dispenser that enables you to even make tea and coffee from mineral water. In between are the thermojugs and water syphons. The prices vary from Rs 50 for the simplest contraption to Rs 13,000 for the hot and cold water dispensers. There is no dearth of takers. "The consumer today is simply taking no chances with any water that is not out of a sealed bottle," says Trivedi.
"The market is definitely headed towards mineral water dispensers for they meet the three basic parameters of the water customer—safety, convenience and cost-efficacy," says Ciby C. James, senior manager at SIEL that entered the mineral water dispenser market in June last year with its Bubble Top brand. Unlike Aquaguard, mineral water dispensers require no plumbing, provide convenience as they require not more than one square foot of space and can be placed anywhere in the home or office. Plus, companies like Hello Marketing are working hard to bring down the cost of mineral water and dispensers to suit every pocket. "The key to successful marketing in this segment lies in bringing down the cost of water to as low as Rs 2 for a litre and demand could explode taking the market up to Rs 450 crore," says Dinesh Nambiar, general manager, Hello. The company has taken the direct marketing route to cut distribution and retail margins and proposes to crack the household market by its low-price strategy. "Any family with a monthly income of Rs 5,000 is our target clientele," says Nambiar.
However, that clientele will take some convincing. At Rs 28 for a 12-litre bottle, which will last an average of four days for a family of four, the monthly cost is around Rs 200 on drinking water. Compare that with Aquaguard, which has no running costs other than minimal electricity bills, after an initial investment of around Rs 5,000. The marketers, naturally, recognise that. Says Nambiar: "We are also attempting to cross the psychological high-cost barrier against mineral water by positioning mineral water against soft drink beverages for the health-conscious consumer." Today Aqua-guard, tomorrow Coke and Pepsi?