The Hindu Business Line : Himalayan ambitions

Today, both Bisleri and the Tatas with their respective ‘Himalayan products’ are attempting to create the category of natural mineral water as well as take their brands to the overseas markets.

Ramesh Chauhan, Managing Director, Bisleri International.

Purvita Chatterjee

With ‘Himalayan water’ emerging a USP in the natural mineral water segment, there are two big brands to choose from. While the Tatas, with their acquisition of Mount Everest Mineral Water (MEMW), have re-launched the Himalayan brand, B isleri has brought in its own Bisleri Mountain Water from the Himalayas as its latest offering. Both players are promoting their ‘bottled at source’ property to differentiate themselves from the rest of the mineral water brands in what may well be a ‘Himalayan opportunity’ in the premium water segment.

Pradeep Poddar, Managing Director & Chief Executive Officer, Mount Everest Mineral Water.

However, making money on the ‘Himalayan brands’ is going to take time. Both brands are expected to make losses initially. Admits Ramesh Chauhan, Managing Director, Bisleri International, “The premium water segment is a loss-making proposition and there is hardly any possibility of getting high margins as freight costs are high and the outlets tend to squeeze the margins at the same time.” Besides, the single source of the water (both brands are bottled at source in the Himalayas) is a limiting factor for distribution and coupled with high transportation costs, makes it an expensive segment to be in. Today, both Bisleri and the Tatas with their respective ‘Himalayan products’ are attempting to create the category of natural mineral water as well as take their brands to the overseas markets. For Bisleri, the brand was initially created for the export market, targeting countries in Europe and the US where the equity of the Himalayan source is an attractive one. Chauhan says, “We created Bisleri mountain water from the Himalayas, primarily for the export market. The brand was exhibited at a fair in Germany and after testing its response we have recently decided to bring it in the Indian market.” Removing the distribution hurdles usually associated with a new brand, Bisleri would be riding on its existing distribution strengths and tapping into the top 10,000 outlets in the country with its new brand.

Bisleri is also breaking away from the routine square and round bottles by packaging this water in a hexagonal one. The challenge of creating labels to suit the bottle shape has also created impediments in terms of launching the brand in the domestic market. “It is not an ordinary bottle and there were problems labelling it, but now we are ready with the brand and should be able to launch it in the domestic market within a month,” explains Chauhan.

The brand prides itself on its source of an aquifer compared to other brands whose product is pumped out through a bore well. With low sodium content and sulphates as detoxifying agents, Bisleri Mountain Water from the Himalayas focuses on its wellness proposition.

Going forward, Bisleri plans to overcome distribution hurdles by not having just a single source of natural mineral water from the Himalayas. In future, it would source water from other mountain ranges in the country for its Bisleri Mountain brand while Bisleri Mountain Water from the Himalayas would continue to source from the Himalayan ranges. “We will thereby give multiple choices to our consumers,” says Chauhan.

At the same time having a first-mover advantage in the new categories under water is also being contemplated by the company which is already a market leader in the packaged drinking water category. Considering Tata’s Himalaya brand had the first-mover advantage in the natural mineral water category, Bisleri is now gearing up with more ‘enhanced’ waters in the future, just as competitor MEMW intends. “Bisleri was the first mineral water brand in the country and we will catch up with competitors in all the new segments as well and even overtake them in the future,” promises Chauhan.

While there are smaller brands such as Evian, Catch and Ava still trying to make an impact in the natural mineral water segment, Bisleri’s main contender is the decade-old, recently re-launched Himalayan brand from the Tatas (through MEMW). The Rs 25-crore Himalayan natural mineral water brand is bottled at the water source at Dhaulakuan in Himachal Pradesh and the brand is touting the source of its natural mineral water as its biggest USP. However, for the company, the most important task remains building the brand and natural mineral water category simultaneously.

MEMW is planning to beat the distribution challenges by having a multiple transportation model whereby it would use railway containers to ferry the brand to the southern markets apart from building a direct-to-market route, especially for institutional sales. Pradeep Poddar, Managing Director & Chief Executive Officer, MEMW, says, “Being a single source, logistics cost does go up as you are carting your water brand all over the country, but we plan to bring in a multiple transportation model in the business to meet these challenges.”

The Himalayan source is also being leveraged to build a global brand. As Abanti Sankaranarayanan, Executive Director & Deputy Chief Executive Officer, MEMW, says, “The Himalayan brand was bought not for its brand but for its source to give it a competitive edge in its category. Its source is its biggest USP as it becomes a global brand.” Just like Bisleri, Himalayan is also touting its Himalayan aquifer as one of the largest and purest sources for mineral water with a host of ‘health-benefiting’ minerals. The company claims its Himalayan aquifer is situated about 130 metres below the earth’s surface and that bottling it at source lends the brand its intrinsic strength. Himalayan is internationally accredited by the US FDA, the European Union and the health ministries of Japan and France, according to the company.

The Tatas are already planning to take the brand to the US and the UK markets where the group already has a presence with brands such as Tetley and Eight O’ Clock. “We would look at markets where the Tatas already have a distribution presence and would be using this route to market the Himalayan brand in these countries,”says Sankaranarayanan.

Investing in a new campaign and packaging for the Himalayan brand is one task, creating the natural mineral water category is another. According to Nisha Singhania, Executive Vice-President, Rediffusion DY&R, “The Indian consumer today is not familiar with the differences between natural mineral water and other packaged drinking water. We needed to establish natural mineral water as a differentiator in their minds. Himalayan natural mineral water takes 20 years to journey from its source in the Shivaliks to the Himalayan aquifer. During this time, Himalayan naturally gathers various essential minerals. In our communication, currently the focus is on going back to nature. However, going ahead we will need to strengthen the Himalayan mythology and help the brand maintain and enhance its aura.”

Taking the natural mineral water category overseas is now the next task for both Bisleri and MEMW. In fact, Bisleri Mountain Water from the Himalayas was initially created for the export market and is now on its way to Europe and the US even as it gets rolled out in the Indian market. Himalayan too is poised to enter the UK and the US markets after experiencing the potential of enhanced water through the Tatas’ association with US water company Glaceau in the past (now taken over by Coca-Cola). As Poddar says, “We cannot be a global company unless we are in the US market and value-added water is going to be a $50-billion market there.” Meanwhile in the domestic market the price premium charged by the brands ( Rs 25 for 1 litre) would be justified only if consumers are ready to accept the benefits of the natural mineral water category. As MEMW’s Sankaranarayanan says, “Our challenge is to simultaneously build the category and make people realise the benefits of this category and that there is value in the kind of price premium that they are paying for.” With natural mineral water being a small subset (estimated at Rs 100 crore) of the Rs 1,500-crore packaged water category, there is still a long way to go before either of these brands make a significant impact.

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