Financial Daily from THE HINDU group of publications
Monday, Jul 12, 2004
Corporate - Announcements
Chauhan to take Bisleri to US
Sindhu J. Bhattacharya
New Delhi , July 11
THE water king, Mr Ramesh Chauhan, is now set to take brand Bisleri across the globe. The man who sold off all his well-entrenched beverage brands to Coca-Cola in India has tirelessly rebuilt his fortunes around Bisleri, despite stiff competition in the domestic market from multinationals and steadily rising input costs. And he will be entering the competitive US market this week.
With the aim of doubling water sales over next three years, Mr Chauhan has initiated the globalisation of Bisleri. "We will use the contract manufacturing route to bottle Bisleri in Quebec, Canada and then sell it in the US market. In fact, production is scheduled to begin this week," Mr Chauhan told Business Line.
What about earlier plans to sell bottled and sparkling water in Europe? Mr Chauhan says that negotiations fell through, so the European foray has been put on the backburner.
The company is already selling and distributing its `Maaza' brand in the US and Bisleri distribution will ride piggyback on this network. Currently sales of various Maaza variants account for $10 million each year in the US, Mr Chauhan says.
When he sold his soft drink brands to Coke in India, he insisted on retaining Maaza rights for all other markets.
This decision has reaped rich dividends for his company and Maaza sells in a whole host of overseas markets in several flavours like `Passion Fruit', `Litchi' and `Guava', besides mango.
On plans for the domestic market Mr Chauhan displays an uncharacteristic reticence. While he refuses to divulge numbers on Bisleri sales, he does disclose that the focus is on the 20-litre bulk water jars instead of the PET bottles.
"Bulk water constitutes 60 per cent of my business today, but its share will go up to 80 per cent soon. Bulk water is extremely economical for consumers and means large sales volumes for my company. The only problem is that its delivery is tougher than the PET bottle."
When one examines the growth rates of the two segments - up to 50 per cent annually in bulk water business against only about 1-2 per cent in bottles - Mr Chauhan's stress on the former makes eminent economic sense.
On his oft-voiced plans to tie up with a strategic partner by offering majority stake in the company, again Mr Chauhan says that negotiations have remained unsuccessful.
"I have dropped plans to invite a strategic partner as of now. I want to grow the business first."
Mr Chauhan has charted a clear course for his business: concentrate on the bulk water business in the domestic market while taking the brand overseas. And like his earlier endeavours, this strategy may yet reap rich dividends for Bisleri.
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