Natural Mineral Water: Indian Industry Analysis

Published: 07th May 2009
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Natural mineral water
According to American and European Regional Codex Standard, natural mineral water:
is obtained directly from natural or drilled sources from underground water - bearing strata.
is collected under conditions which guarantee the original natural bacteriological purity.
is bottled at the point of emergence of the source with

particular hygienic precautions is not subjected to any chemical treatment.

Indian bottled Water Industry
The bottled water industry in India is estimated at about Rs 1,000 crore and is growing at 40 per cent. "By 2010, it will reach Rs 4,000 - 5,000 crore with 33 per cent market for natural mineral water.

The formal bottled water business in India can be divided broadly into three segments in terms of cost: premium natural mineral water, natural mineral water and packaged drinking water.

It is estimated that the global consumption of bottled water is nearing 200 billion litres - sufficient to satisfy the daily drinking water need of one-fourth of the Indian population or about 4.5 per cent of the global population at the fourth World Water Forum held in Mexico City in March 2006

In India, the per capita bottled water consumption is still quite

low - less than five litres a year as compared to the global average of 24 litres. However, the total annual bottled water consumption has risen rapidly in recent times - it has tripled between 1999 and 2004 - from about 1.5 billion litres to five billion litres. These are boom times for the Indian bottled water industry - more so because the economics are sound, the bottom line is fat and the Indian government hardly cares for what happens to the nation's water resources. Since 1991-

1992 it has not looked back, and the demand in 2004-05 was a staggering 82 million cases.

Mineral Water Market in India
For example, the per capita consumption of mineral water in India is a mere 0.5-liter compared to 111 liter in Europe and 45-liter in USA.

But over the last ten years, it has witnessed tremendous growth. The change is very much evident. Once a product found mainly at railways stations, mineral water today occupies a place on the shelf in most superstores, grocers and even paanwalas. From a mere 60 towns in the year 1997, it is predicted that mineral water is today available in more than 1000 towns and cities across India. With a compounded annual growth rate of close to 30% over the last decade, the mineral water market has witnessed a large growth in terms of volumes.

The market is highly competitive with the entry of MNC's like Pepsico and Coke. There are a lot of brands available in the market, each with its own proclaimed differentiation.

2.2 Player in the market
In natural mineral water there are very few company like Himalayan, Aava, Evian is playing in the market. 50% of the market is captured by Himalayan.
While a thousand bottled water producers, the Indian bottled water industry is big by even international standards. There are more than 200 brands, nearly 80 per cent of which are local.
Most of the small-scale producers sell non-branded products and serve small markets.
Despite the large number of small producers, this industry is dominated by the big players - Parle Bisleri, Coca-Cola, PepsiCo, Parle Agro, Mohan Meakins, SKN Breweries and so on.

Consumption of bottled water in India is linked to the level of prosperity in the different regions. The western region
accounts for 40 per cent of the market and the eastern region just 10. However, the bottling plants are concentrated in the southern region - of the approximately 1,200 bottling water plants in India, 600 are in Tamil Nadu. This is a major problem because southern India, especially Tamil Nadu, is wate starved.

Mineral water business is restricted only to big hotels & Restaurants. This field has lot of scope because of unawareness in the market and people are becoming health conscious.




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