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Presentation by Pratik Pota at the Seminar on Packaged Water Industry in India which was organised by Confederation of Indian Industry (CII) on 30th June 2009. To know more click on the link http://indiawaterportal.org/post/6790 We thank CII and the presenters for giving us permission to make these presentations available online.
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Packaged Water Industry in India : An Overview
30th June, 2009
Packaged Water Industry in India : An Overview
30th June, 2009
Pratik Pota
Executive Director, SouthPepsico India
Pratik Pota
Executive Director, SouthPepsico India
The Packaged Water Industry includes Retail and Bulk Water and is 250MM c/s in SizeThe Packaged Water Industry includes Retail and Bulk Water and is 250MM c/s in Size
Retail water : Packaged water <5Ltr• 500ml• 1ltr• 2ltr• Pouches
Bulk water : Water packaged in >5Ltr• 10ltr• 20ltr• 25ltr
1000 ML34%
Bulk water6%
500 ML2%
Pouches49%
2000 ML9%
South52%
North15%
East5%
West28%
% Contr.
Urban 80%
Rural 20%
Nearly half the market is made of Pouches
It is currently heavily South biased
And largely Urban centric
Source : Nielsen
The Industry is highly fragmented and localThe Industry is highly fragmented and local
% Contribution of the Top 5 Players ~35%
Number of Players in the Category >1000
Source : Nielsen
The Retail Packaged Water Industry is growing at ~25%The Retail Packaged Water Industry is growing at ~25%
Region % Growth
North 25%
East 31%
West 20%
South 26%
India 24%
Pouches 22%
500 ML 13%
1L-2L 28%
Total 23%
Metro ROU Rural
% Growth 12% 28% 38%
Source : Nielsen
Growth driven by Rural and Small Towns
All Regions seeing healthy growths
Growth across all Packs
What is fueling this Industry growth?What is fueling this Industry growth?
Increased On-the-go behaviourHigher disposable income Importance of Hygiene
Affordable Price PointsIncreased Availability
7 Lakh 9 Lakh outlets
The growth is expected to continue given the low Per Caps The growth is expected to continue given the low Per Caps
Per Capita Consumption
(Litres)
Global Average 25
USA 130
Mexico 269
Italy 245
Thailand 117
India 1.7
Globally, the Bottled Water segment has extended into Enhanced and Value Added WatersGlobally, the Bottled Water segment has extended into Enhanced and Value Added Waters
Vitamin/ Mineral fortified
Added fibre/ performance enhancing ingredients
Beauty ingredients Strengthen immune
system/ treat specific diseases
For diabetics
Functional WatersFlavoured Water
Fruit flavoured
Natural Flavours
Sugar Free
Differentiated Packaging
Premium Packaging
Appearance changing
More eco-friendly
How will the Water Segment evolve in India?Some Crystal Ball Gazing!
How will the Water Segment evolve in India?Some Crystal Ball Gazing!
Category will continue to grow at >20% by Volume
Increase in number of new pack offerings• Straddle Magic Price Points
Greater Differentiation• Packaging Innovation
Emergence of Value Added waters• Flavoured
• Functional
Thank YouThank You
Case studyCase study
In USA, Y Water released Brain Water under the Y Brain Water brand. Y Brain Water Brain Water is 100% natural, rich in nutrients, low in calories and free from artificial ingredients. According to the manufacturer, this water improves memory. The product has been USDA organic certified and is available in a 9-fl. oz. unique bottle.
In Finland, Plup released Spring Water under the Plup brand. Plup has launched Lähdevesi (Spring Water) in a 0.4L bottle in a totally new drinking bottle design. The manufacturer encourages consumers not to return the bottle, but rather to re-fill and re-use it. The bottle is said to be highly durable and suitable for heavy use, such as hiking or boating. Other ready-to-drink-products will be sold in the bottle through grocery stores on a mass-market level as well as through other channels.The manufacturer is said to donate a vast amount of its profit for environmental issues such as cleaning up the Baltic Sea.
Source : www.gnpd.com
Back-UpsBack-Ups
The profitability algorithm of Bottled Water presents a significant challengeThe profitability algorithm of Bottled Water presents a significant challenge
MC Construct of 1L/ 500ml/ Pouch (get from IC/ Anshul)
The growth is expected to continue given the low Per Caps The growth is expected to continue given the low Per Caps
Global water consumption –estimated at 53bn gallons 2008 (242 bn ltrs) (beverage marketing
corporation) and growing World Per Capita Consumption
averages 25ltrs(www.fnbnews.com
India’s per caps - 5ltrs www.fnbnews.com)
Statistics on some countries- America
• US&Mexico – 29% of world market
• US Per caps 130ltrs, Mexico – 269 ltr
• Canada and US, bottled water is one of the fastest growing industries
Europe• France,Spain, Italy,
Germany – 18% of world market
• 13 of the top 20 bottled water consumers are European countries
• Percaps in Italy highest at 245 ltrs
(beverage marketing corporation)
Middle east and Asia• UAE, with 182ltr percaps, 3rd
highest consumer in the world• China has almost 10% in global
volume with the highest growth rate CAGR (15.6%) over 03-08. However, per caps only 17.5ltr
• Thailand only Asian country in Top 20 consumption countries
Nearly half the market is made of Pouches
What would be the key triggers of growth?What would be the key triggers of growth?
Barriers to Growth
• Availability /Scale
• Quality standards of unorganised players leading to loss of confidence in the industry Triggers
• Growth in affordable packs at Rs.5 and Rs.10
• More variants in the top end (Mineral and fortified waters)
• More health/hygiene consciousness
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