Eureka Forbes to enter packaged water segment

Water purification appliances maker Eureka Forbes is making a foray into the packaged water segment and will roll out the bottled water product on a pan-India basis by next year, a top company official said.

“We are foraying into the extremely competitive packaged drinking water market through the `franchise’ route.

In our business model, each franchisee will invest Rs 1.5-2 crore in a latest purification and bottling set-up,” the Eureka Forbes CEO - Direct Sales and Senior Vice-President - Marketing, Mr Marzin Shroff, told PTI.

The company will sell the product under the brand name ‘AquaSure’, in 20 litres and one litre bottles, but has not divulged the prices.

Eureka Forbes, which started the direct selling concept in India, has a 52 per cent market share in the Rs 1,500-crore water purifier segment, with Aquaguard and AquaSure brands.

When asked why it is entering the highly competitive market where there are many players including the multi-nationals, Mr Shroff said: “Our core expertise of direct selling is our differentiator. We believe this shall help us establish in the 20 litres ‘bubble’ segment that is currently dominated by local players. The existing customer base of over 10 million users of Aquaguard and AquaSure are captive audience for bottled water launch.”

At present, the bottled water segment is estimated to be worth Rs 3,000 crore, growing at an annual rate of 25 per cent, and is dominated by Parle group’s Bisleri, Manickchand group’s Oxyrich, Tata Group’s Himalayan, UB Group’s Kingfisher, Pepsico’s Aquafina and Coca-Cola’s Kinley.

Eureka Forbes has already set up franchised operations for packaged drinking water in Andhra Pradesh, and plans to enter Andhra Pradesh, Maharashtra, Tamil Nadu and Gujarat in a phased manner in the next four to six months.

“Our focus will be South India, Maharashtra and Gujarat....Markets that constitute almost 65-70 per cent of the bottled water market, to begin with,” he said.

The company is eyeing a 14 per cent growth in its revenue in the current fiscal from Rs 1,450 crore last year, with the help of its plans for the air-purification segment.

The air purifier market is estimated to be around Rs 4 crore and the firm currently enjoys a market share of 70-80 per cent and plans to sell 15,000 units compared with 5,000 units it sold last year.

Mr Shroff further said the company is trying to expand its global footprint to 14 new countries, and would be helped by Swiss firm Lux International AG, in which it acquired a 25 per cent minority stake last year.

“We are in a partnership with them (Forbes - Lux Group AG) in 36 countries, we want to move that to 50 countries. We are expanding into Eastern Europe now. We are also looking at Southern Africa and South America,” he said.

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