While the Rs 150-crore niche natural mineral water category is poised to grow, distribution hurdles continue to plague most of the brands. The largest mineral water company, Bisleri, is still finding it difficult to stock its Vedica mineral water brand at outlets. “Not all the stores want to keep the Vedica water brand and distributors continue to drift away as it is a small business for them. We are now trying to change the packaging for the brand and move away from the green colour which identifies Vedica with the largest selling Bisleri packaged water,'' says Mr Ramesh Chauhan, Chairman, Bisleri International.
The natural mineral water brands are priced between Rs 30 and Rs 50 and deep discounting continues with brands such as Qua, Vedica, Himalayan and Catch, which continue to seek volumes through the general trade. “Today these brands continue to discount heavily and sell at any MRP. Besides, freight costs are also high in this category as the water needs to be sourced from the mountains in the northern States,” claims Mr Chauhan. Bisleri International has now decided to have separate outlets for stocking its high end Vedica brand of mountain water and its mass brand of Bisleri.
In fact, today most of the premium mineral water brands have decided to use the distribution strengths of their joint venture partners.
In the case of Himalayan, while the distribution has been shifted to the newly formed 50:50 joint venture company Nourishco (between the Tata Global Beverages and Pepsico), sales have yet to surge on the back of Pepsico's distribution muscle. “Today Pepsi is using its juice brand Tropicana's distribution set-up to sell Himalayan but there has yet to be an increase in sales,” says an official from the joint venture company. Pepsi has tried to segregate the distribution of its Aquafina mass brand of mineral water from the more premium Himalayan but sales remain lacklustre in spite of Pepsi's distribution strengths.
The Narang group's Qua brand of mineral water is also being distributed through a joint venture, Danone Narang Beverages, a 50:50 venture between the Danone and the Narang Group. “Our biggest challenge is to educate consumers and distributors to understand the benefits of natural mineral water,” says Mr Rahul Narang, Founder & Chairman, Narang Group.
Qua is being distributed through the channel used for energy drink Red Bull and juice brand Orangina (also distributed by the Naranag group) and has yet to make money in the group's portfolio of distributed brands.