AN OVERVIEW OF PACKAGED DRINKING WATER INDUSTRY...

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CHAPTER III

AN OVERVIEW OF PACKAGED DRINKING WATER INDUSTRY

Introduction

All living things need water. The Earth is full of water. Water is the most essential

element, next to air, to our survival. Water makes up more than two thirds of the weight

of the human body, and without it, we would die in a few days. Water is important to

complete daily life and to maintain our body health. Thirty years ago „packaged drinking

water‟ barely existed. Nowadays the product forms an essential business by its stable and

still growing market – locally and globally. Packaged drinking water can be described as

any product, including natural spring or well water, taken from municipal or private

utility systems or other water, distilled water or any of the foregoing to which chemicals

may be added and which are put into sealed bottles, packages or other containers, to be

sold for domestic consumption or culinary use. In 2013 the global packaged drinking

water market is forecast to have a value of $94.2 billion, an increase of 41% since 2007.

This increasing trend reveals that the product meets the demand of countless consumers.1

A Role of Water in Ancient History

Water is our lifeline that cleans and feeds us. In ancient cultures, water

represented the very essence of life. The Romans were the first to pipe water into their

growing cities, especially with their aqueducts. They also realized that sewage water

could cause damage to people and needed to be removed from the living environment.

Water has played a role not only in the history of countries, but also in religion,

mythology, and art. Water in many religions is symbolised as a soul cleanser and known as

holy water. For example, water at St.Lourdes, France is thought by many religions to be

sacred with healing powers. It brought life to their people, but in drought, produced chaos.

Water has always been perceived as a gift from the gods, as it rained from the heavens.

1 Department of Health, New York State 2006, February, “Bottled water frequently-asked questions”.

Retrieved from http://www.health.state.ny.us/. Last accessed on January 28, 2010

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

http://www.health.state.ny.us/

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Importance of Water

Water is not only important to human beings, but also for every living thing needs

it to live. It has helped form the Earth as we know it, and it covers over 70 per cent of the

Earth. Even where there is land, much of it is covered by ice, which is obviously just

solid water.

Water is important in homeostasis process to maintain the relatively constant

temperatures within the body. This is important because sudden changes in temperature,

which may upset metabolic reactions in cells, are avoided. These chemical reactions are

allowed to take place within a narrow temperature range so that rates of reaction are more

constant. Water has been called a universal solvent because of it polarity. This means

many compounds, whether ionic, polar or covalent will dissolve in it, therefore more

reactions take place while in solution with water. Human digestion will only dissolve

soluble foods, meaning large starch molecules must be broken down into soluble sugars.

Also many organisms living in water, spend most of their time underwater, yet they

require oxygen to respire, and as water is such a good solvent, the required oxygen is

dissolved in the water.

History of the Bottled Water Industry

The earliest bottled water company was founded in the United States in the

middle of the 19th

century. In 1845, the Ricker family of Maine bottled and sold water

from a so far unidentified source. Their small operation quickly grew; capitalizing on the

spring‟s supposed medicinal properties, eventually became the Poland Springs water

company. Mirroring the Ricker success, in 1905, the Ozarka Spring Water Company was

founded in Eureka Springs, Arkansas. Since then, bottled water landscape has expanded

tremendously. This expansion has come mostly recently, and it seems to be the

acceleration of a slowly expanding industry. Between the early part of the 20th

century

and its end, there was little activity in the bottled water industry.

Bottling companies eventually formed their own lobbing group in 1950 in order to

promote their product, and have only been recently successful. Now, there are hundreds


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of companies and thousands of brand names of bottled water, and worldwide consumption is

in the billions of dollars. Currently, both the Ozarka and Poland Spring brands are owned

by Nestlé, and are part of Nestlé‟s seventy-five US water brands.2

It was in the early 19th century, when the market showed a noticeable change in

Europe and captured a great part of the beverage market share. The real boost of bottled

water commenced in 1968 when the French company „Vittel‟ revolutionarily launched

the first plastic bottled water- aimed for general public consumption. With France and

Germany on top with their highest sales in volume, Europe became an established and

leading market.3

Bottlers marketed the product to consumers as safer, healthier, refreshing, more

reliable and above all, better than other soft drinks. Moreover, consumers had become

more health conscious and in some parts of the world tap water was unavailable or

unsafe. These drivers were the beginning of a booming global bottled water market.

Purifying and Treating Water

People want drinking water that is free of bacteria, sparkling and without an

objectionable take or odour. Water in its natural state seldom has these qualities. So, after

water is drawn from source, it is piped into a treatment plant. The plant put the water

through one or several process, depending on the quality of the untreated water, and the

city‟s standards. Many cities use three levels of processing which are:

i. Coagulation and setting

ii. Filtrations

iii. Disinfection

Variety of Packages

Bottled water is sold in a variety of packages: pouches and glasses, 330 ml

bottles, 500 ml bottles, one- litre bottles and even 20- to 50-litre bulk water packs.

2 Mark Miller, “Bottled water: why is it so big? Causes for the rapid growth of bottled water industries”,

Honors thesis, Presented to the Honors Committee of Texas state university, San Marcos, May 2006 3 Finlayson, D. (2005). Market development of bottled waters. In D. Senior and N. Dege (2nd ed.),

Technology of bottled water (p.6). UK: Blackwell Publishing


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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. Premium natural mineral water includes brands such as Evian, San Pelligrino and

Perrier, which are imported and priced between Rs.80 and Rs.110 a litre. Natural mineral

water, with brands such as Himalayan and Catch, is priced around Rs.20 a litre. Packaged

drinking water, which is nothing but treated water, is the biggest segment and includes brands

such as Parle, Bisleri, Coca-Cola's Kinley and PepsiCo's Aquafina. They are priced in the

range of Rs.10-12 a litre. The FDA also classifies some bottled water according to its origin.

i. Artesian well water: Water from a well that taps an aquifer--layers of porous

rock, sand and earth that contain water which is under pressure from surrounding

upper layers of rock or clay.

ii. Mineral water: Water from an underground source that contains at least 250 parts

per million total dissolved solids. Minerals and trace elements must come from

the source of the underground water. They cannot be added later.

iii. Spring water: Derived from an underground formation from which water flows

naturally to the earth's surface. Spring water must be collected only at the spring or

through a borehole tapping the underground formation feeding the spring. If some

external force is used to collect the water through a borehole, the water must have the

same composition and quality as the water that naturally flows to the surface.

iv. Well water: Water from a hole, bored or drilled into the ground, which taps into

an aquifer.

v. Tap Water: Some bottled water also comes from municipal source in other

words the tap. Municipal water is usually treated before it is bottled.

Market Analysis of Packaged Drinking Water on Environment

i. 80% of the diseases in India are water-borne.

ii. 60% - 80% children suffer from water-borne diseases.

iii. 50,000 people die every day due to water contamination.

iv. India has 17 million cases of viral hepatitis, and

v. 8 million cases of typhoid every year.


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All this happens due to water contamination, in fact. There are three types of

water contamination as explained below:

Physical Contamination: Caused due to contaminants like mud, sand, odour, colour,

algae, fungus herminths etc.

Chemical Contamination: Caused due to insecticides, pesticides, oils, excess of ions,

unwanted minerals.

Microbiological Contamination: Caused by bacteria, viruses of other unicellular organisms.

Global Bottled Water Market

Bottled water represents a key segment of the global beverage market. Market

stimulants for bottled water include rising population, consumer spending patterns,

lifestyle trends, and growing levels of health consciousness, among others. Bottled water

is also gaining prominence due to growing consumer concerns about fitness, water

quality and health. The major challenge for most companies is product innovation and

differentiation of water.

Bottled water is mostly sold in plastic containers ranging from small eight ounce

or half litre containers to multi-gallon bottles. Globally, bottled water industry is

estimated to use about 2.7 million tons of plastics each year, for the vast majority of

water bottles in the shape of polyethylene terephthalate (PET)

Table -3.1

GLOBAL BOTTLED WATER MARKET

Share of Consumption by Region 2005-2010 (in %)

Region 2005 2006 2007 2008 2009 2010

North America 30.2 30.7 31.2 30.8 30.3 29.8

Asia 22.9 23.6 24.9 26.3 27.1 28.5

Europe 34.3 33.5 31.3 30.1 28.9 28.1

South America 9.1 8.8 9.2 9.4 10.2 10.1

Africa/Mideast/Oceania 3.5 3.4 3.4 3.5 3.5 3.5

Total 100 100 100 100 100 100

Source: Global bottled water market www.ausfoodnews.com.au/


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It is inferred from Table -3.1 that in 2010 North America played the major role in

consumption share of consumption by region on global bottled water market at 29 per

cent. By Asia at 28.5 per cent, Europe at 28.1 per cent, South America by 10.1 per cent

and followed by Africa/Mideast /Oceania by 3.5 per cent.

Figure -3.1

Source: Palmer (2010) Bottled water industry gets boost from developing industry,

www.ausfoodnews.com.au/

It is evident from figure-3.1 that North America is leading at 30 per cent volume

of region-wise consumption of bottled water. Europe, Asia at 28 per cent and the

remaining 14 per cent by all other regions.


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Figure -3.2

Source: Total Global consumption of bottled water market, 2010

www.ausfoodnews.com.au/

Figure 3.2 shows that there is a continuous and sustainable increase in the

consumption of bottled water in the global consumption from year 2000-2010.

Market Growth

After several leading years, the European and North American market

deteriorated to some extent over the last years. The report of Asia boosts global bottled

water market that these markets showed a decrease in growth in 2008 and 2009 because

of two main reasons. Firstly because of the global recession (consumers are switching to

less expensive options such as tap water), and secondly because of concerns about the

impact of bottled water on the environment. It can be concluded that bottled water is an

“extra” commodity for many consumers in these countries since financial concerns play a

crucial role. China has boosted the regional and indeed the global market. The rapidly

growing economy of China can be seen as the main driver of this growth. The global

market increased by approximately two per cent in 2009. This is a slowdown in

comparison to previous years, but it also expresses that the bottled water category can

maintain growth in even the most challenging times of trading environments.


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Market value

The value of the global bottled water market increased obviously parallel to the

consumption. In 2012 the global bottled water market is forecast to have a value of $94.2

billion, an increase of 41 per cent since 2007. Despite the decline in growth last year,

consultants expect every region of the market to post growth in 20124

Figure -3.3

Source: Datamonitor (2009)5

Global Bottled Water Companies

Worldwide there are thousands of companies bottling water for profit. Many of

these corporations have grown exponentially. Almost all of these corporations make

phenomenal amounts of money on a resource. They pay very little for the industry

leaders such as Thames Water, Perrier, Vivendi, Suez, Pepsi and Coca-Cola to see how

their profit margins have been on a steady increase over the last decade, in their bottled

water divisions. Bottled water companies fight not only concerned citizens within local

areas, but also fights each other in hopes of being the first to establish their own bottling plants.

Currently, German energy conglomerate RWE and French transnational Vivendi are the two

largest water corporations globally. These giants control almost 40 per cent of the existing

water market shares as they are ranked 51st and 53rd among Fortune's Global 500 List.

4 Drake, I. (2010, January). Asia boosts global bottled water market. Retrieved from

http://www.ausfoodnews.com.au/ 5 Datamonitor (2009). Bottled Water: Global Industry Guide. Retrieved from

http://www.researchandmarkets.com/


http://www.researchandmarkets.com/

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Vivendi alone operates in over 100 countries while the third largest bottling water giant,

Suez, operates in more than 130 countries. The annual revenues of Suez and Vivendi

combined push $70 billion.

Global bottled water companies have been criticized for their methods. For

example, in Massachusetts and New Hampshire, after the American Water Works had

been sold to German based RWE, the managers of Nashua's water company Pennichuck

decided to post the local company for sale. Then in April 2004, Pennichuck announced

that it had received a $106 million purchase offer from Philadelphia Suburban.

This company is the second largest investor-owned water utility in the United States.

Vivendi owned 17 per cent of Philadelphia Suburban.

Bottled water competence to other soft drinks

Carbonated soft drinks remained, by far, the largest liquid refreshment beverage

category, but they continued to lose both volume and market share. Volume slipped 0.8%

from 13.9 billion gallons in 2009 to 13.8 billion gallons in 2010, which resulted in their

market share moving down from 48 per cent to 47 per cent. Nonetheless, certain soda

trademarks, such as Dr Pepper, Mountain Dew and Sprite, did achieve growth. Moreover,

carbonated soft drinks accounted for five of the 11 biggest beverage trademarks during

2010, with Coca-Cola and Pepsi-Cola retaining their perennial first and second positions.

Bottled water had four entries among the leading trademarks for the first time in

2010 (with two brands essentially tied for the tenth place). Bottled water declined in 2008

and 2009 but recovered in 2010, when volume grew by 3.5 per cent. Four companies

accounted for all of the leading refreshment beverage trademarks. Pepsi-Cola had five

brands, including the sole fruit beverage brand to make the list, Tropicana. Coca-Cola

had three, while Nestlé Waters North America (NWNA) and Dr Pepper Snapple Group

(DPSG) had two and one, respectively.6

Use of Bottled Water-The Consumer’s Perspective

Various reasons have been reported for the higher trend of bottled water use in

many countries. Some reasons include:

6 Beverage Marketing Corporation Reports


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i. Consumer awareness of increasing water pollution.

ii. Deficiencies in municipal water supplies in terms of aesthetic, chemical and

microbiological water quality.

iii. Successful marketing strategies of bottled water by the bottling companies.

iv. Easy availability and reasonable pricing has popularized the utilisation of bottled

drinking water by a number of people who can afford it.

v. Bottled water is generally considered safe and is taken for granted by people without

question. For example „spring water‟ is perceived as a pristine, natural source of water.

vi. Bottled mineral water has long been consumed as a safer alternative in countries

with reticulated water of uncertain quality. However, consumers should be aware

that bottled water is not necessarily safer than tap water.

Public Health Aspects and Concerns about Bottled Water Use

Although consumption of bottled water is increasing, there are many concerns,

these include:

i. Poor regulation by different member states;

ii. Uncertainty of the shelf-life and possible health implications; and

iii. Uncertainty of water quality status.

Bottled water Versus Carbonated Beverages

Bottled noncarbonated drinking water competes in the marketplace with

carbonated beverages (including carbonated water) sold in individual plastic bottles.

Consumption of water often is considered a healthier substitute for soda. According to the

Container Recycling Institute, sales of flavoured, noncarbonated drinks were expected to

surpass soda sales by 2010. In response, Coca-Cola and PepsiCo have introduced new

carbonated drinks that are fortified with vitamins and minerals, Diet Coke Plus and Tava,

marketed as "sparkling beverages."

Critical View for Packaged Drinking Water

There are many possible reasons why bottled water has become such a large

industry and some of those reasons are because of its advantages with regard to ordinary tap

water, according to the large number of advertisements that showcase bottled water‟s

qualities. Two other important reasons, are its relative convenience, and its safety and purity.


http://en.wikipedia.org/wiki/Diet_Coke_Plus

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Bottled water appeals many as being far more convenient than tap, and logically

so. Bottled water are available virtually everywhere now. One can purchase bottled

water by the dozens at most supermarkets, and one can find bottled water at service

stations, vending machines, and even some restaurants. Restaurants are particularly

happy to sell bottled water, as it replaces, or at least complements, a previously free

service. At delis, fast food, takeout places and similar establishments, where one picks a

drink out of a refrigerator, bottled water is considered the norm, and usually takes up

about half the drink refrigerators. Tap water is still available through the soda fountain,

but one would have to ask for a cup. This usually results, however, in a small cup, which

is hardly convenient, or even portable in a stuff-in-bag sense. The physical container is

plastic bottle with a screw-on lid. This configuration allows for a re-sealable container. One

can grab a bottle and not worry about spilling it. This offers an edge over conventional

aluminium cans, which cannot be re-closed. Because bottles are re-sealable, places that

prohibit food and drink, will often allow water bottles and similar containers. Such places

typically include mass transit, classrooms, libraries, museums, conference centres, and

other public accommodations.

Re-sealability has granted added advantageous quality to the bottles. Since it is

re-sealable, it is also re-usable. When the originally bottled water runs out, the consumer

can simply refill the bottle with ordinary tap water, or soda, alcohol, or whatever the

consumer wants. This changes the purpose of the product and even the industry‟s purpose

as well. Instead of bottled water being sold as different or better water, it is sold in

containers for large quantity of water. This places it in competition with more traditional

sports bottles. Using the water bottle for the re-useability does compromise another of its

advantages. This advantage is purity. Many consumers of bottled water typically consider it

more desirable because of its purity. One way the water can be purer than tap water because

bottled water is usually placed into its container almost immediately after collection.

Due to the fact that water is usually bottled at its source, it can avoid the possible

contamination that could result in city treatment processes. These processes include

wastewater treatment, river and rainwater collection, contaminated plumbing, and

excessive fluoridation or chlorination. Damaged, broken, or rusting pipes are a health

concern, and are the responsibility of the municipality. Since such entities are typically


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slow to respond, tap water may become contaminated. Furthermore, the compromising of

treatment facilities or sources to allow particulates, excessive amounts of minerals, and

biological contaminates into the water stream are simply unacceptable to most folk. These

conditions are also the responsibilities of the municipality, and so mismanagement and the

resulting impurities represent a critical factor in the decision to purchase bottled water.

a. Mineral water is perceived as good for health and the mineral conent gives it a

taste along with therapeutic value.

b. Minerals in the bottled water is easily absorbed by the body compared to minerals

in the food.

c. Mineral water benefits the body by helping it to fight against fungus and bacteria

along with de-oxidizing the body.

d. Regular water purifiers remove all kinds of mineral content from the water;

mineral revitalization water purification systems artificially add minerals back

into the water.

e. These systems give the water the same kinds of minerals that have been removed

during the filtration process.7

Critical View against Packaged Drinking Water

There are, as with any product, disadvantages to the consumption of bottled

water. The most obvious and tangible is cost. Bottled water is very expensive. Some

times go for around five dollars a gallon ($1.15/litre), nearly twice the cost of gasoline in

most places. Imported water goes for much higher prices; sometimes up to seven or eight

dollars a gallon. ($1.99/litre) Prices, of course, vary, but usually in-house lines for grocery

stores run much cheaper, sometimes less than half as much as brand name products. This is

undoubtedly because many supermarkets are simply selling municipal water.

Filtered tap water is nothing new, either. Many brands, particularly the largest

brands are simply filtered tap water, and have been sold that way for some time now.

To do this, the bottlers simply hook into the municipal water supply and sell the water.

7 R.Anitha, “A study on customer preference toward packaged water in Karur city”, Self Journal of Social

Science, ISSN: 0975-9999,Vol.II ; issue:5, pp-11


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Sometimes the bottlers run it through extra filtering systems like Pepsi‟s HydRO-7

scheme, and sometimes not. On the bottle, the water is usually labelled as being from a

“community” or “municipal” source, or even simply stating it was bottled inside a city.

This means that the bottler simply attached his plant to a city‟s water system and started

bottling the city water. 8

There are real environmental impacts of extracting large volumes of water from

local aquifers and of producing and disposing of plastic containers. It is estimated that

$100 billion are conservatively annually spent to purchase packaged drinking water

worldwide. It is the failure to meet basic human needs for water should not open the door to

replacing a public good with a private commodity, but rather should motivate to spend the

same resources to produce a more widely available, and far less costly, public product.

Water Resources Over-Exploited

The majority of the bottling plants are dependent on groundwater. They create

huge water stress in the areas where they operate because groundwater is also the main

source in most places the only source of drinking water in India. This has created huge

conflict between the community and the bottling plants. Private companies in India can

siphon out, exhaust and export groundwater free because the groundwater law in the

country is archaic and not in tune with the realities of modern capitalist societies.

The existing law says that "the person who owns the land owns the groundwater

beneath". This means that, theoretically, a person can buy one square metre of land and

take all the groundwater of the surrounding areas and the law of land cannot object to it.

This law is the core of the conflict between the community and the companies and the

major reason for making the business of bottled water in the country highly lucrative.

India's Ministry of Water Resources has ranked 80 per cent of ground water

resources in Rajasthan as "over- exploited" and nearly 34 per cent resources as "dark/

critical", the gravest ranking across the country.

8 Ibid


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Bottled Water Industry in India

Water shortage and health awareness driving bottled water consumption in India.

The Indian market is estimated at about Rs 1,000 crores and is growing at a whopping

rate of 40 per cent. By 2010, it will reach Rs 4,000 -5,000 crores with 33 per cent market

for natural mineral water. According to a national-level study, there are more than

200 bottled water brands in India and among them nearly 80 per cent are local brands.

In fact, making bottled water is today a cottage industry in the country. Leave alone the

metros, where a bottled-water manufacturer can be found even in a one-room shop, in

every medium and small city and even in some prosperous rural areas there are bottled

water manufacturers. India ranks in the top 10 largest bottled water consumers in the

world. There is a huge market being exploited by the packaged water industry and several

MNCs are waiting in the wings to expand into the country.

Table- 3.2

Indian Bottled Water Industry is Growing Exponentially

Year Million cases

1990-91 2.2

1991-92 2.6

1992-93 3.5

1993-94 4.7

1994-95 6.5

1995-96 8.5

1996-97 11.5

1997-98 15.5

1998-99 20

1999-2000 26

2000-01 33

2001-02 44.5


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Year Million cases

2002-03 55.6

2003-04 68.15

2004-05 82

2005-06 97

2006-07 112.85

2007-08 129.85

2009-10 146.8

2009-10 164.45

2014-15 264*

Estimated (Prediction)

Source: infochangeinidia.org.indiastat.com

Key Drivers for Growth of Packaged Drinking Water

Bottled water is still not perceived as a product for masses, though the scene is

changing slowly, thanks to low pricing and aggressive marketing strategies adopted by

new entrants. Penetration in rural areas is another significant factor that is likely to play a

key role in the development of the bottled water trade. The level of prosperity in the

different regions plays a key role in the consumption of bottled water in India.

The western region accounts for 40 per cent of the market and the eastern region just

10 per cent. 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.

With over a thousand bottled water producers, the Indian bottled water industry is

one of the biggest in the world. There are more than 200 brands, nearly 80 per cent of

which are local/small-scale. Most of the small-scale producers sell non-branded products

and serve small markets (waterstocks.com). Despite the large number of small producers,

this industry is dominated by the big players - Parle Bisleri, Coca-Cola, PepsiCo, Parle Agro,

and SKN Breweries. Bottled water business in India can be divided broadly into three segments


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in terms of cost: premium natural mineral water, natural mineral water and packaged drinking

water. The per capita bottled water consumption in the country is still quite low - less than

5 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 5 billion litres (waterstocks.com).

While the single largest share in the mineral water market might still belong to an

Indian brand Parle‟s $52 million Bisleri brand has a 40 per cent share -- multi-national

corporations are not far behind. Nestle and Danone are vying to purchase Bisleri, and

Pepsi's Aquafina and Coke's Kinley brands have been extremely successful in edging out

many of the small and medium players due to buy-outs and exclusive licensing deals.

Kinley and Aquafina are fast catching up, with Kinley holding 20-25 per cent of the

market and Aquafina approximately 11 per cent. The rest, including the smaller players,

have 20-25 per cent of the market share. The Indian bottled water market, which has

more than 250 brands, is expected to undergo a major consolidation phase.

History of Bottled Water in India

Mineral bottled water in India under the name 'Bisleri' was first introduced in

Mumbai by Bisleri Ltd., a company of Italian origin in 1965. Mineral bottled waters were

in glass bottles in two varieties - bubbly and still in 1965. This company was started by

Signor Felice who first brought the idea of selling bottled water in India.

Parle bought over Bisleri (India) Ltd. In 1969 they started bottling mineral water in

glass bottles under the brand name 'Bisleri'. Later Parle switched over to PVC non- returnable

bottles and finally advanced to PET containers. Since 1995 Mr.Ramesh J. Chauhan has started

expanding Bisleri operations substantially and the turnover has multiplied more than 20 times

over a period of 10 years and the average growth rate has been around 40% over this period.

Presently, it has 8 plants and 11 franchisees all over India. Bisleri commands a 60% market

share of the organized market. Currently, Bailley has a national presence in 5 lakh retail outlets

across the country. “We plan to increase manufacturing plants for Bailley from 29 to 60,

presently 40 plants are operational and few more will be ready for operations over the next few

months,” informed Nadia Chauhan, joint managing director of Parle Agro.9

9 http://www.gits4u.com/water/water16.htm


http://www.gits4u.com/water/water16.htm

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Bottled Water Market in India

Bottled water industry in India has been growing steadily and is dominated by

certain brands in the market. The packaged water segment is extremely competitive with

players ramping up their packaging styles to attract a large base of consumers in order to

account for a larger share in the market. With rising consumer concerns over health and

increasing shelf spaces in the institutional channels, the market is set to boom and exhibit

huge potential for players to increase their sales. The report begins with the market

overview section which provides a detailed description of the current and forecasted

off-trade/retail sales. The difference between packaged and mineral water as well as

different forms of distribution is also covered in this section. The section also highlights

the regional consumption of bottled water in terms of the bulk water consumption and

also the off-trade sales in various regions of India. It also includes the import and export

structure of bottled water and the brands that are traded.

Bottled Water Top Players in India

The market leader is Bisleri International, which boasts a 40 per cent share. It is

followed by Coca- Cola‟s Kinley (around 25%) and PepsiCo‟s Aquafina (around 10 %).

The top players in bottled water industry in India are the major international giants like

Coca cola, Pepsi, Nestle and noticeable presence of national players like Mount Everest,

Manikchand, Kingfisher, Mohan Meakins, SKN Breweries, Indian Railways and so on.

With increasing competition, this sector will register a robust growth in 2010, predict

industry analysts. To take on rivals in this sector, PepsiCo India is drawing up a fresh

game plan which includes investment in capacity enhancement, packaging initiatives and

below-the-line activities to pump up volumes in the over-crowded category. Meanwhile,

swadeshi major Parle Agro is extending the manufacturing facility for Bailley from 29 to

60 plants this year. While swadeshi major Bisleri International is beefing up its

distribution, manufacturing and marketing operations. Coca-Cola India is sharpening its

focus on packaging initiatives of Kinley to woo new consumers. In essence, the packaged

water industry in India will soon witness a major tussle between swadeshi and videshi

players to gain market and mind share.


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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. But many

region of southern India, especially Tamil Nadu, are water starved.

Top multinational players such as Coca-Cola and PepsiCo have been trying for

the past decade to capture the Indian bottled water market. Today they have captured a

significant portion of it. However, Parle Bisleri continues to hold 40 per cent of the

market share. Kinley and Aquafina are fast catching up, with Kinley holding 20-25 per cent

of the market and Aquafina approximately 10 per cent. The rest, including the smaller

players, have 20-25 per cent of the market share.10

Shelf Life of Bottled Water

In general, a product's shelf-life or safe storage time is affected by a number of

variables, including intrinsic parameters, such as pH and moisture content, and extrinsic

parameters, such as environmental factors. Understanding these variables is the key to

maintaining a safe food product.

Bottled Water: Indefinite Shelf Life under Optimal Conditions

Properly stored bottled water has indefinite shelf life. However, long-term storage

of bottled water may result in aesthetic defects, such as off-odour and taste. The IBWA

advises consumers to store bottled water in an unopened container at room temperature

(or cooler), out of direct sunlight and away from solvents and chemicals such as gasoline,

paint thinners and dry cleaning chemicals. Bottled water is an excellent choice for emergency

water storage. The FDA good manufacturing practices mandate that bottled water be

produced in a sanitary environment and bottled in sanitary, safety-sealed containers.

Enforcement of the Laws by the Government on Bottle Water

The laws on municipal drinking water safety have been heavily enforced.

In contrast, the laws on bottled water labelling have barely been enforced. One solution

would be to adopt international standards on bottled water. One of the purposes of the

international Codex Alimentarius was to develop food standards that protect consumer health.

10

www.market research.com


http://www.market/

84

Two of these standards, the General Standard for Bottled/Packaged Drinking Waters

(other than natural mineral waters; 2001) and the Standard for Natural Mineral Waters

(1981) are available to regulate bottled water. Quebec stepped into the gap with its

Regulation Respecting Bottled Water a comprehensive rule for the distribution of bottled

water in the province. It requires a hydro-geological and vulnerability study of source

waters for spring and mineral waters; detailed chemical, microbiological and radiochemical

information, and standard labels.

Bottled Water Association has a model Code, April 2009 that it asks its members

to follow. The Code states that “natural water”, i.e., that obtained from an underground or

approved natural source, must comply with maximum allowable concentrations of

parameters defined in the CDWQ Guidelines. The Code also sets out rules for product

quality as well as good manufacturing practices, storage, handling and testing, as well as

operational requirements that include bottlers submitting a hydrogeology report that

shows the integrity of the source water supply. It includes monitoring source water and

the final product for contamination. Unfortunately, no one enforces this Code.11

Bottled Water Law in India

The term "mineral water" is misleading because Indian laws do not stipulate the

minimum mineral content level required for water to be labelled as such. Ahmedabad-based

Consumer Education and Research Society (CERS), an independent non-profit institution

with a sophisticated product-testing laboratory, recently carried out a detailed study on

13 major brands of bottled water available in the country. The CERS study indicates that

there is an urgent need to revise standards for bottled water.

Legal Regulations of Packaged Drinking Water

Water is an elixir of life. In India the following agencies are directly or indirectly

connected with regulating, monitoring and laying down standards of water

1. Ministry of health and family welfare

2. Bureau of Indian standards under the ministry of food and consumer affairs.

3. Ministry of Rural development

11

http://archives.foodsafety.ksu.edu/fsnet/2004/1-2004/fsnet_jan_7.htm#story3


85

4. Ministry of Urban development

5. Ministry of environment and forests

6. Ministry of water resources.

7. Local bodies.

Bottled water regulations

Most provincial water quality standards, such as Ontario‟s Drinking Water

Quality Standards regulation under the Safe Drinking Water Act, 2002 (SDWA), set

maximum limits for microbiological, chemical and radiological parameters for all

drinking water in the province. But these rules do not apply to bottled water. Bottled

water is regulated, much less tightly, under the federal Consumer Packaging and

Labelling Act and Regulations. The source of the water need not be disclosed, unless it is

labelled as “spring” or “mineral” water. (Many bottled waters are actually tap water.

For example, Dasani (owned by Coca-Cola) is filtered municipal tap water, bottled in

Brampton, Ont., and Calgary. Pepsi‟s Aquafina, is essentially the same. Both companies

pay less for municipal water, by the way, than consumers do. The bottle label includes:

Common name (e.g., “water”), list of ingredients, if more than one , Net quantity, Name,

address of responsible company, Fluoride content, For all bottled waters, except spring or

mineral water: description of any treatment the water has received (e.g., chlorination, filtration).

For spring or mineral water: dissolved mineral salt content, statement as to whether ozone or

fluoride has been added and geographic location of underground water source.

Implication for Policy and Way Forward

The developing world is marked with challenges of coping with failing infrastructures,

inadequate finance, poor legislation, lack of appropriate institutional capacity for

regulation and control and often the political will to enforce control measures.

The position is complicated by the fact that many of these developing nations are at a loss

on how to set standards. Consequently, they resort to dependence on adopted standards,

policies and guidelines as presented by international organizations based on scenarios and

context in the developed world. Case studies are presented shortly of some on-going

success stories in the packaged water industry. In the cited locations, various levels of


86

stakeholder participation led to the birth of solutions that found a right balancing in

between safeguarding public health through enactment of regulatory standards and

improving social welfare through sustained access to packaged drinking water. There

could be possible serious implication of a tenacious focus on such policies, standards and

regulatory approaches imported from developed countries on drinking water access for

residents of the developing world as each situation differs in its own respect and has to be

treated as such. For example, the WHO bacteriological water guidelines are widely

accepted in industrialized as well as developing countries but they are not always

achieved in practice. 12

Packaged Drinking Water Regulation in India

The late nineties marked the commencement of packaged drinking water

regulation in India. Solely handled by the Bureau of Indian Standards in collaboration

with the Health Ministry, the rules on its safety were drafted into a Prevention of Food

Adulteration Act. The original plan was to come up with a standard that matches with

international standards. Given the complexities and the technologies involved in the

implementation, the PFA Act however remained vague on the issue of allowable levels of

pesticides in packaged drinking water. With growing health concerns, a stakeholder

meeting between the BIS and the Health Ministry officials marked the declaration of

specific allowable limit - no pesticide should exceed 0.0001 mg/litre and total content of

pesticide not exceeding 0.005 mg/litre. It was agreed that testing methods and support are

to be provided by the BIS. Again, consensus was reached that it will take some time

before the necessary changes take effect in the packaged water industry13

Energy Costs Derived from Bottle Manufacturing, Transport, and Disposal

In terms of manufacturing costs, the Earth Policy Institute estimates that around

1.5 million tons of plastic are used globally each year in water bottles, or about enough to

fuel 100,000 cars. The Berkeley Ecology Centre found that manufacturing PET generates

12

Jensen P.K, Jayasinghe G, van der Hoek W, Caincross S, Dalsgard A: Is there an association between

bacteriological drinking water quality and childhood diarrhoea in developing countries? Tropical

Medicine and International Health 2004, 9(11):1210-1215 13

The Times of India: Pesticide content in packaged water to be quantified 2003, Available at

http://articles.timesofindia.indiatimes.com/2003-02-11/india/ 27261339_1_pesticide-content-pesticide-

limits-detectable-levels , Accessed 28th July, 2007


87

more than 100 times the toxic emissions in the form of nickel, ethylbenzene, ethylene

oxide and benzene compared to making the same amount of glass. Consequently, the

Climate Action Network concludes, “making plastic bottles requires almost the same

energy input as making glass bottles, despite transport savings that stem from plastic‟s

light weight.” Moreover, because more than 22 million tons of bottled water is

transferred each year from country to country, the distribution of bottled water requires

substantially more fuel than delivering tap water.

Instead of relying on a mostly pre-existing infrastructure of underground pipes

and plumbing, delivering bottled water to North America from far-off places such as

Italy, France, Iceland, and the islands of southern Pacific burns fossil fuels and results in

the release of thousands of tons of harmful emissions and pollutants. As the Pacific

Institute puts it, a simple way to visualize the average energy cost required to

manufacture plastic bottles fill them with water, transport them to market, and then deal

with the bottles as refuse is to imagine filling a quarter of each bottle with oil. In

addition, Pacific Institute estimates that it takes twice as water to produce a bottled water

product than the amount of water in the bottle itself. Moreover, in a recent study

conducted by the Pacific Institute, it was estimated that producing bottled water requires

as much as 2000 times the energy cost of producing tap water.

Industry Nature and technology

The industry is highly fragmented and unorganized in nature. While there are

some large players like Degremont, Ion Exchange, Thermax, and Larsen & Toubro, there

are over 500 small players in the field. The water treatment industry is largely

concentrated in certain geographical pockets like Mumbai, Pune, Chennai, Hyderabad,

New Delhi, Kolkata and Ahmedabad. Some plant manufacturers are present in other

areas, but this number is limited. The water treatment equipment industry in India is very

cost competitive (30% cheaper) and well established. The water treatment market is

moving away from chemical treatment and demineralization (DM) plants to membrane

technology. However, several large user segments such as refineries and power plants

continue to use DM technology. Zero discharge systems and wastewater recycling are

becoming increasingly popular in India.


88

Effects of Liberalization on Packaged Drinking Water

During pre-liberalization era, the concept of packaged drinking water was told as

it was a luxury available in five star hotels meant for the consumption of foreigners and

elite Indians. It was only after the liberalization of the Industrial sector by the cost of

India, many from outside India are interested in starting new industries in India.

Accordingly many packaged drinking water industries were started consequently, the

concept itself has started gaining currency among the masses of India so much, so that the

market of packaged drinking water in India is an exorbitant 1000 crores and it is rapidly

growing at 40-50 per cent annually. There are a few large packaged drinking water

companies functioning namely, Pepsi, Coca-cola and Bisleri, with the last being the

pioneer in this field. Apart from these, certain improvised local brands are also available

in the market, namely Aqua-blue, Sabol and the like.14

Though the liberalization policy of India has indeed brought a revolution in the

manufacture and introduction of packaged drinking water it is still not perceived as a

product for masses. Now, the scene is changing due to low pricing and aggressive

marketing strategies adopted by new entrants. Surveys show that truck drivers on

highways form a major chunk of bottled water drinkers. Penetration in rural area is

another significant factor that is likely to play a key role in the development of the bottled

water trade.15

Bottled Water Industry Targets a New Market: The Global South

Market reports predict that over the next four years sales of bottled water will

grow most quickly in Asia, Latin America and Africa. Recent industry analysis shows

that countries in the Global South have the best potential for future growth in bottled

water sales. Market reports predict that over the next four years sales of bottled water will

grow most quickly in Asia and Latin America due to 'the poor quality of potable water.

Africa is also highlighted as having strong potential for bottled water sales due to unsafe

drinking water. In addition to limited access to clean tap water, reports mention the rising

number of people with disposable incomes as a driver for growth in the industry.

14

www.water.org 15

www.bis.org


89

This is all very positive for bottled water companies, but signals a wrong turn in the

struggle to bring publicly managed municipal water service to communities and will have

severe impact on how populations view the delivery of this basic human right.

This opportunity for the bottled water industry is leading to widespread privatization

of drinking water delivery in countries where access to clean tap water is limited. Bottled

water sold for huge profits may bring water to people who need it, but the side effect is

the commodification of this basic human right. When populations find that the only way

to access drinking water is to buy it in a packaged form, people will come to accept that

water, whether from a tap or from a bottle, is something that can be bought and sold on

the open market. A system is emerging where only those who can afford it will have

access to water. The privatization of drinking water is already well under way in many

urban centres in the Global South. In areas where clean tap water is either not available or

not safe (or perceived to be not safe) people are already consuming packaged water

supplied by for profit producers at an alarming rate. The three global bottled water giants,

Groupe Danone, Nestlé and PepsiCo also have the capital and existing global

infrastructure to exploit the bottled water boom in the Global South. India, Vietnam,

Nigeria and México, demonstrate how the rapid growth of bottled water sales is already

forging the path towards privatization and is creating risks to health and livelihood along

the way. The severe impact the bottled water industry has on the environment in the

Global South caused by water takings and the disposal of plastic bottles.

Processing of Water for Bottling

In India, the quality of drinking water is very poor in comparison to other

countries. Treatment of water is required for purification. To produce high quality

drinking water as prescribed by the World Health Organisation (WHO), conventional

processing methods like coagulation, flocculation, sedimentation, ion exchange, filtration

and oxidation etc. are not sufficient. Membrane processes have advantages over other

treatment processes. Micro-filtration and ultra-filtration are said to be very useful in

removing micro-organisms. Reverse osmosis membranes are used to remove various

contaminants found in drinking water. A combination of reverse osmosis and de-ionisation

can be used to produce high quality water.


90

Bottle Filling

Before filling, freshly manufactured plastic bottles are rinsed and inverted from

where they go for filling on rotary bottle filler. Water flows from the filler bowl into the

bottles via ventra flow valves. These valves use an airlock method for accurate filling.

The variation is no more than 5mm. When liquid reaches the end of the valve sleeve, air

cannot escape. Pressure is created at the top of the bottle, and no more liquid can enter.

The airlock method provides consistent, repetitive filling and reduced product loss.

The fillers are available in a wide range of configurations and are adaptable to a variety

of capping systems. IS : 14543 - 1998 (Specification for Packaged Drinking Water)

prescribes the hygienic practices to be followed in respect of collecting water, its

treatment, bottling, storage, packaging, transport, distribution and sale for direct

consumption , so as to guarantee a safe, hygienic and wholesome product. The bottles are

generally capped using roll-on type plastic caps, with pilfer proof rings.

Bottle Labelling

The last step is the labelling of bottles. In the earlier days, gummed paper labels

were used which satisfied only the legal requirements of declaration. When these labels

came in contact with moist surface, they lost their identity. Later shrink film plastic labels

came into use for this application. Auto-sleeve system for labelling then became a

commercial success. Auto-sleeve labels are used both for one way and refillable-multi-

trip plastic bottles. It is a stretchable label made of low density polyethylene of special

grade. The Department of Health, Ministry of Health and Family Welfare has notified to

carry the following declaration on the label of the disposable bottle of mineral water or

packaged drinking water.

["Crush the bottle after use”] The notification was published in the Gazette of

India and the rule came into force from 01/04/2004. Other labelling requirements should

be as per PFA Rules and Packaged Commodities Rules as prescribed in IS: 14543 – 1998

(Specification for Packaged Drinking Water).


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Packaging Requirements

It is well known fact that drinking water should be packed in clean, colourless,

odourless, clear, tamperproof containers, which are hygienically safe. Much of the water

is packaged in similar bottles as carbonated soft drinks, and would, therefore, carry many

of the same requirements.

Strength

Unlike carbonated drinks, the bottles filled with still water need only enough

strength to hold water and to survive impact.

Colour and clarity

Clarity is one of the most important requirements and is the main reason why

clear bottles of plastics are used. A resin with higher levels of co-polymer adds to the

clarity. As regards the light blue colour in the bottles, this is permissible for one time use

bottles. However in India, the BIS (Bureau of India Standards) has prescribed colourless

bottles for multi trip/reusable containers. Since currently almost all the bottlers use blue

coloured containers, studies have commenced at IIP to establish whether blue colour

helps to reduce the UV effect and the percentage of blue colour that could be considered

to be added without affecting the clarity of the bottle.

Purity

Because water is a flavourless product, using a plastic that remains tasteless and

odourless is imperative.

Mandatory certification

To prevent adulteration, the quality of the bottle and its sealing drew great attention and

concern. The standardisation of the quality of the water and the bottles was not thought of

earlier. There was a concern whether mushrooming brands in packaged drinking water would

really ensure quality and safety. The provisions of mandatory BIS certification and that of

Prevention of Food Adulteration Act (PFA) have brought in assurance to the consumers that

packaged drinking water is trustworthy. The Indian Standard IS: 14543 – 1998 prescribes the

quality and safety requirements of packaged drinking water.


92

Plastic package types

As the market has evolved, so too has its packaging mix. Bottles may be the favourite

container for packaging water, but glass rarely features as the first choice today. Glass

together with cans and cartons have a diminished share. Glass retains a high profile in outlets

where the water is for consumption on the premises (hotels, restaurants, cafes) remaining

particularly strong in Central and South America and Europe, especially Germany. Plastics

are versatile materials and are in many cases capable of matching or surpassing the

characteristics of other types of packages. They do not corrode, are hygienic, lightweight and

often provide opportunities for reducing the weight of the packages used. A variety of

polymers are available which can be used for packaging of drinking water.

Polyethylene

Low-density polyethylene film is the most important group of plastics used in

packaging drinking water. Polyolefin also have the highest calorific value of all

constituents in the packaging waste stream and are, therefore, prime candidates for

disposal through incineration with energy recovery.

Polyethylene Terephthalate (PET)

PET is the most extensively recycled plastic of the present time. It is easier to

collect than other plastics. It has a high intrinsic value, is economic to recycle even with

existing collection systems and there are well-developed markets for its recycling, such

as carpet fibres and fibre film. The important feature of used PET is its ability to be

converted chemically to the monomer from which it was produced using hydrolysis or

methonolysis. The US Food & Drug Administration for food-packaging applications has

approved PET produced by chemical recovery of this sort. For packaged drinking water

PET bottles are used in 50ml to 20 litres capacity. Perrier has developed a new container

that incorporates a layer of nylon sandwiched between layers of PET to comply with the

requirement for a standard 12 months shelf-life mineral water.

Polypropylene (PP)

Polypropylene (random clarified co-polymer) is widely used for food contact

applications throughout the world and enjoys favourable status with food and


93

regulatory agencies. PP containers/cups with peelable lids are used for packaging of

drinking water in 100, 200ml. Capacities with suitable lids for closures.

Poly Vinyl Chloride (PVC)

Earlier, the most commonly used package for mineral water was stretch blow

moulded bottle of PVC, as PVC is rigid, clear and has adequate impact strength. Compared

to other polymers, PVC requires lower amount of energy to produce. If collected separately,

it can be readily recycled. The recycled PVC is sandwiched between inner and outer

layers of virgin polymer in co-extruded PVC pipes. The major concern for safe use of

PVC for non-toxic and food contact applications is the residual monomer level in the

resin. The FDA in USA and regulatory agencies has specified the monomer levels at

5ppm in PVC resin. PVC containers in capacities of 100, 200, 250 and 1000ml are used

for packaged drinking water.

Polycarbonate (PC)

Polycarbonate can be processed into useful end products by any of the usual

processing techniques like extrusion, blow moulding, injection moulding etc. Polycarbonate

containers are popularly used for multi-trip application for mineral water containers

of 15-20 litres.

Polyethylene Naphlthate (PEN)

This is a high performance resin and the containers made out of this resin are used

for refillable, returnable mineral water.

HIPS (High Impact Polystyrene)

Containers cater to the 200ml mineral water market. These containers are

provided with heat sealable peel able lids. 16

16

PET Planet Insider, Vol. 4, No. 2, ‟03, Water Drives Global by Canadean, U.K,


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Table - 3.3

The Content and Substances of Packaged Drinking Water

S. No Characteristics Requirement

1. Colour Not more than 2 Hazen units/ True

Color Units

2. Odour Agreeable

3. Taste Agreeable

4. Turbidity Not more than 2 nephelometric

turbidity unit (NTU)

5. Total Dissolved Solids Not more than 500 mg/litre

6. pH 6.5 – 8.5

7. Nitrates (as NO3) Not more than 45 mg/litre

8. Nitrites (as NO2) Not more than 0.02 mg/litre

9. Sulphide (as H2S) Not more than 0.05 mg/litre

10. Mineral oil Not more than 0.01 mg/litre

11. Phenolic compounds (as C6H5OH) Not more than 0.001 mg/litre

12. Manganese (as Mn) Not more than 0.1 mg/litre

13. Copper (as Cu) Not more than 0.05 mg/litre

14. Zinc (as Zn) Not more than 5 mg/litre

15. Fluoride (as F) Not more than 1.0 mg/litre

16. Barium (as Ba) Not more than 1.0 mg/litre

17. Antimony (as Sb) Not more than 0.005 mg/litre

18. Nicke l(as Ni) Not more than 0.02 mg/litre

19. Borate (as B) Not more than 5 mg/litre

20. Anionic surface active agent

(as MBAS)

Not more than 0.2 mg/litre


95


21. Silver(as Ag) Not more than 0.01 mg/litre

22. Chlorides(as C1) Not more than 200 mg/litre

23. Sulphate(as SO4) Not more than 200 mg/litre

24. Magnesium(as Mg) Not more than 30 mg/litre

25. Calcium(as Ca) Not more than 75 mg/litre

26. Sodium(as Na) Not more than 200 mg/litre

27. Alkalinity(as HCO3) Not more than 200 mg/litre

28. Arsenic(as As) Not more than 0.05 mg/litre

29. Cadmium(as Cd) Not more than 0.01 mg/litre

30. Cyanide(as CN) Not more than 0.05 mg/litre

31. Chromium(as Cr) Not more than 0.05 mg/litre

32. Mercury(as Hg) Not more than 0.001 mg/litre

33. Lead(as Pb) Not more than 0.01 mg/litre

34. Selenium(as Se) Not more than 0.01 mg/litre

35. Iron(as Fe) Not more than 0.1 mg/litre

36. Polychlorinated biphenyl (PCB) Not detectable

37. Poly nuclear aromatic hydrocarbons Not detectable

38. Aluminium(as A1) Not more than 0.03 mg/litre

39. Residual free chlorine Not more than 0.2 mg/litre

40. Pesticide Residues Below detectable limits

41. "Alpha" activity Not more than 0.1 Bacquerel/litre

42. "Beta" activity Not more than 1 pico curie/l (pCi)

43. Yeast and mould counts 1 250ml Absent


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44. Salmonella and Shigella 1 250ml Absent

45. E.coli or thermotolerant bacteria 1

250ml

Absent

46. Coliform bacteria 1 250ml Absent

47. Faecal Streptococci and

Staphylococcus aureus 1 250ml

Absent

48. Pseudomonas aeruginose 1 250ml Absent

49. Sulphite reducing anaerobes1 250ml Absent

50. Vibriocholera and V.Parahaemolyticus

1 250ml

Absent

51. Aerobic Microbial count The total viable colony count shall not

exceed 100 per ml at 20`c t0 22`c in

72h on agar-agar or on agar-gelatin

mixture, and 20 per ml at 37`c in 24 h

on agar-agar.

It is needless to mention that water, a compound of Hydrogen and Oxygen is a

precious natural gift which is very essential for survival of mankind including animals.

The water used for potable purposes should be free from undesirable impurities. Water

available from untreated sources such as well, boreholes and springs is generally not

hygienic and safe for drinking. Thus it is desirable and necessary to purify the water and

supply under hygienic conditions for human drinking purpose. As the name implies, the

mineral water is the purified water fortified with requisite amounts of minerals such as

Barium, Iron, Manganese, etc. This can be absorbed by human body. It is either obtained

from natural resources like spring and drilled wells or it is fortified artificially by

blending and treating with mineral salts.

Mineral water shall be manufactured and packed under hygienic conditions in

properly washed and cleaned bottles in sterilised conditions. The trend indicates that

lightweight, resilient and affordable PET is increasingly the packaging medium of choice.

Almost 7 out of every 10 litres of water now appear in PET - a significant increase from


97

6 litres as of 1998, and it still continues to grow. The packaged water market is

essentially a one-way street. Non-refillables account for four out of every five litres.

Consequently nonrefillable PET is very much the norm on a global scale. It is estimated

that worldwide, 1.5 million tons of plastics (mostly PET) are consumed for the

manufacture of different sizes of drinking water bottles. In India, out of 54,000 tons of

PET produced locally, 12,500 tons go in for the manufacture of bottles for the packaged

water industry. The PET bottle market in India is also expected to grow. The used

PET bottles are disposable, their collection and recycling is a cause of concern to the

industry, the consumers and the environment protection groups. However, in India, there

is a PET recycling industry, with a capacity of 75,000 tons per annum.

The PET waste is recycled into fibres. This is an effort to pre-empt a market

situation that may arise a few years hence. Unfortunately sufficient safe potable water is

not available everywhere in the country, either harmful chemical substances are found in

the layers of earth which enter into water or it may be contaminated due to pathogenic

micro-organisms. If such water is consumed, the body suffers from waterborne diseases.

Due to this, it has become imperative to process and bottle safe potable water for the

mankind in prevailing conditions.

The demand for purified water becomes more during summer season. Although a

few companies have already entered in the bottling of safe potable water and mineralized

water, but still a huge gap is there in between demand and supply at all metropolitan-

cities and towns. The product is widely accepted in offices, restaurants, railway stations,

airport, bus stands, and hospitals and to some extent even in rich households. So there is

good scope for establishing the units for processing and bottling plain and mineralized

drinking water in different parts of the country.

PET Container: Packaging Medium of Choice

The trend indicates that lightweight, resilient and affordable PET container is

increasingly the packaging medium of choice. Almost seven out of every 10 litres of

water now appear in PET - a significant increase from 6 litres as of 1998, and it still

continues to grow. The packaged water market is essentially a one-way street.

Non-refillables account for four out of every five litres. Consequently non-refillable PET


98

is very much the norm on a global scale. It is estimated that worldwide, 1.5 million tons

of plastics (mostly PET) are consumed for the manufacture of different sizes of drinking

water bottles. In India, out of 54,000 tons of PET produced locally, 12,500 tons go in for

the manufacture of bottles for the packaged water industry. The PET bottle market in

India is also expected to grow. The used PET bottles are disposable, their collection and

recycling is a cause of concern to the industry, the consumers and the environment

protection groups. However, in India, there is a PET recycling industry, with a capacity

of 75,000 tons per annum. The PET waste is recycled into fibres. This is an effort to

pre-empt a market situation that may arise a few years hence. Unfortunately sufficient

safe potable water is not available everywhere in the country, either harmful chemical

substance were found in the layers of earth which enter into water or it may be

contaminated due to pathogenic micro-organisms. If such water is consumed, the body

suffers from waterborne diseases. Due to this, it has become imperative to process and

bottle safe potable water for mankind in prevailing conditions.

The demand for purified water becomes more during summer season. Although a

few companies have already entered in the bottling of safe potable water and mineralized

water, still a huge gap is there between demand and supply at all metropolitan cities and

towns. The product is widely accepted in offices, restaurants, railway stations, airports,

bus stands, and hospitals and to some extent even in rich households. So there is good

scope for establishing the units for processing and bottling plain and mineralized drinking

water in different parts of the country.

Market comprises of two segments:

1. Natural mineral water: Drawn from a natural underground source.

2. Packaged drinking water: Water from any source is treated for consumption.

a. Packaged water shows greater penetration with greater sale values and market

for natural mineral water still nascent.

b. Packaged drinking water has the retail sales market.

c. Pouches have a greater share in the market in terms of packs sold in different

parts of India.


99

d. Increasing mobility of consumers has led to varied differentiation among

package sizes.

e. Fiercely competitive due to attractive economics and huge size.

Trends in Marketing of Packaged Drinking Water

i Institutions continue to be an important channel.

ii Wide packaging formats.

iii New entrants from other sectors.

iv Launch of flavoured water.

v Natural mineral water going abroad.

Drivers in Marketing of Packaged Drinking Water

i Water shortage and low bottled water consumption.

ii Increasing consumer awareness on health issues.

iii Increase in waterborne diseases.

iv Archaic government laws supporting ground water exploitation.

v Growth in foreign visitors and expatriate population.

Challenges in Marketing of Packaged Drinking Water

i Inefficient transport infrastructure.

ii Sound economics and high low-entry barriers.

iii Threat from profitability low-quality products.

iv Increasing use of water purifiers.

Innovations in Bottled Water New Food and Drinks Report

Mineral water, it is claimed, offers skincare and nutritional benefits. It is positioned as

water that helps prepare skin for sun-tanning. The carbohydrate-free water contains aloe vera

extract, concentrated betacarotene, vitamin C and lycopene. It is marketed under the

Micro-fluid Biotechnology name and bottled by Micro-fluid Biotechnology.


100

Consumer Concerns had a Positive Effect on the Bottled Water Market

Consumer concerns over rising obesity levels combined with an increase in public

knowledge of health issues had a positive effect on the bottled water market. Consumers

have been switching from sugary carbonated drinks to healthier alternatives. In addition,

manufacturers are creating new premium and super-premium brands to satisfy demand at

the high end of the market. These trends, combined with convenience and ethical issues,

mean there is currently a significant amount of innovation in the bottled water market.

Health Issue on Purity of Bottled Water

City water systems must issue “right to know” reports about what‟s in the water.

Bottlers successfully killed this requirement for bottled water. Up to 70 per cent of

bottled water is unregulated by the Food & Drug Administration. Acceptance of the

supposed purity of bottled water is being undermined in India by the government Health

Department's warning of pesticides and contaminating organisms being present in some

bottled products.

India to Serve As Hub for Imported Alaskan Water

Global Systems, based in San Antonio, Texas, has announced plans to export

12 billion gallons of water per year from the Blue Lake Reservoir in Sitka, Alaska, to a

new, yet to be built water hub on the west coast of India.

The first shipment to the new hub in India whose location remains undisclosed for

security reasons is at least 18 months away; the water hub will be built in the next six

months, while custom-built water-transport tankers, costing about $75 million, will be built

over the next 18 months. Existing oil tankers cannot be used because of potential

contamination from leftover oil residues, he explained. The water will be packaged at the

hub, and then distributed in India as well as several GCC – Gulf Cooperation Council –

countries, including Saudi Arabia, Iraq and the United Arab Emirates.

Government Legal Rules on Packaged Drinking Water

The government of India issued the following news release through the Ministry

of Consumer Affairs, Food & Public Distribution: “No person is authorized to

manufacture, sell or exhibit for sale, packaged drinking water and packaged mineral


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water except under Bureau of Indian Standards Certification Mark. As per the Quality

Control Order issued under Prevention of Food Adulteration (PFA) Rules, 1955, Bureau

of Indian Standards has formulated the following Indian Standards which provide quality

norms for packaged water:

i) IS 14543:2004 Packaged drinking water (other than natural mineral water)

ii) IS 13428: 2005 Packaged natural.”

Growing Use of Packaged Bottled Water led to Increase in Sale

The growing use of packaged bottled water for cooking and washing is set to

boost sales in the branded water segment in summer. Bisleri, Tata's Himalayan, Pepsi's

Aquafina and UB Group's Kingfisher are some of the brands vying for the top slot in the

packaged drinking water space, where prices range from Rs 20 to Rs 120 for a 20-litre can.

Tamil Nadu Government Urged to Take Over the Sale of Bottled Water

The Tamil Nadu Water Supply and Drainage Board (TWAD) Workers Federation on

May 15, 2010 suggested the State government take over the sale of bottled drinking water and

make it available at Rs. 2 a litre. The State government which is generating a huge income from

sale of Indian made Foreign liquor (IMFL) through TASMAC outlets should think of making

available good drinking water to people. People Federation General Secretary P.H.C.M.Gandhi

said that the government could earn revenue of Rs 5,000 crores even if it sold water at Rs. 2 a

litre. He said, adding that multi-national and private companies selling packaged drinking water

were earning crores of rupees as profit whereas actual cost of purifying water was less than five

paise per litre. TWAD should be fully in charge of surveying, designing, execution and

maintenance of all water and drainage schemes and empowered to collect water and drainage

tax also, he said, Organizers of Go Green in December 2010 at the Copenhagen Climate talks

wanted to go as green as possible and so they did not provide delegates bottled water and

instead offered Copenhagen tap water in corn Starch cups.

Government Close Illegal Bottled Water Units

To prevent the spread of waterborne diseases in summer, the Delhi high court has

directed the government to tighten the noose around illegal units manufacturing and selling

bottled drinking water on May 31, 2010. Justice S. Muralidhar directed government agencies


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to crack down on units manufacturing and selling drinking water without a licence and

Bureau of Indian Standards (BIS) certification. It also constituted a committee for the

purpose. The High Court was hearing a petition filed by Bottled Water Processors

Association. The association moved the court, alleging there are a large number of units in

Delhi not complying with norms. They also claimed that despite the central government‟s

attention being drawn to illegal manufacturers, no action was taken to stop such activities.

High Court constituted a task force against units without a license and BIS certification.

Future Growth Opportunities

A number of factors are fuelling the growth in the market. Rapidly rising population

has led to increased requirements for drinking water and sewage treatment. While this is largely

in the urban areas at the moment, this could shift to smaller towns and villages in times to

come. The Government has also got into the action by imposing stringent legislations regarding

wastewater treatment. There is also a compulsory requirement of Environment Clearances from

Pollution Control Boards at the Centre and the states. The recent Supreme Court directive to

move polluting units out of Delhi is also likely to act as an impetus to future sales of water

treatment equipment. Also at the same time, many existing treatment plants would need to be

replaced or upgraded to meet with more stringent standards.

Drinking water problems in India are quite different from those in developed

countries. The main concern is with disinfecting the potable water at the point of use.

Traditionally, the point of use market has been dominated by ultraviolet purifiers and filters.

Industrial majors like Ion Exchange and Thermax have tried entering this market, but with

limited success. In the last year, domestic reverse osmosis purifiers have struck the market

and have been hugely successful. Recent advancements in nano filtration and ultra filtration

are now entering this area and offer future opportunities. One big area of growth has been the

increase in bottled water plants in India. With liberalization and increased awareness of water

quality, hundreds of bottled water brands have entered the market. The USD 250 million

bottled water market is growing at the rate of 75-80 per cent and a large number of reverse

osmosis plants have come up in the last two years. With multinationals like PepsiCo and

Coke getting established in the market, the quality and technology in their plants has

improved.


AN OVERVIEW OF PACKAGED DRINKING WATER INDUSTRY...

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