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Where govts have failed, industries rake it in

| Updated on May 26, 2014

Low-hanging fruit: Bottled water kept for sale at a shop near Kochi, Kerala. KK MUSTAFAH   -  The Hindu Business Line

Quality issues keep demand for bottled water high

The provision of clean drinking water is a duty that has been enshrined in the Constitution of India. Article 47 confers this duty, along with improving public health standards, on the State. But due to the fall in the quality of both surface and groundwater sources, access to good quality water continues to remain a challenge.

The Planning Commission has said that in the 12th Five-Year Plan, ending in 2017, an investment of $26.5 billion is required to provide safe water to all Indians. But the growing levels of pollutants — iron, arsenic, fluoride — is making the problem difficult to solve.

Bottled-up demand

There are companies that capitalise on the drinking water issues in India.

Concerns over quality as well as higher levels of health awareness have led to a boom in both water-bottling and water purification industries.

The bottled water industry has seen spectacular growth since Bisleri’s launch in 1967.

The industry, worth ₹6,000 crore as of 2012-13, is set to triple in size to ₹16,000 crore by 2017-18, says a report by ValueNotes, a market research firm. This is an annual growth rate of 22 per cent.

The reason for the optimism is because per-capita bottled water consumption is still quite low in the country — less than five litres a year compared with the global average of 29 litres. Still, due to our large population, India ranks 10th in the list of bottled-water consumers in the world.

The market has so far remained concentrated. Nearly two-third of the market share is held by the top five companies: Bisleri, PepsiCo, Coca-Cola, Parle and Dhariwal. But regional outfits are fast catching up and finding niches to play, particularly in the rural markets.

Smaat solution

For instance, Smaat, a Hyderbad-based start-up, packages water in pouches instead of plastic bottles. The company’s ₹1.3-crore unit can be mounted on a truck and driven around to deliver 2,000 litres an hour. It can also pack water in 5,000 small pouches in an hour. Not just in India, Smaat’s 18 in-house technology solutions are sold in 33 countries.

Another growing niche is the premium water segment, estimated to make up nearly 10 per cent of the total packaged-water market.

This high-end market, which includes natural mineral water, is pegged to touch ₹1,500 crore by 2015, according to a 2012 study by IKON marketing consultants.

Natural mineral water, usually from an underground source, meets quality standards without processing. Packaged water typically refers to water that is treated and disinfected.

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Published on May 26, 2014
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