Post on 01-Nov-2014
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
PROJECT REPORT
ON
Study of
“BOTTLED DRINKING WATER INDUSTRY”
Prepared by
SHRISTI BADRINATH TIWARI
Student of
B.M.S. (Bachelor of management studies)
2010-2011
SUBMITTED TO
UNIVERSITY OF MUMBAI
&
R.E.SOCIETY’S
R.P. GOGATE COLLEGE OF ARTS & SCIENCE
AND
R.V. JOGALEKAR COLLEGE OF COMMERCE,
RATNAGIRI
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ACKNOWLEGMENT
My special thanks go to our Principle Dr. S.A.Deo for giving
me an opportunity to do this project and also Vice-principal of
commerce faculty Mr. Uday Bodase and not to forget co-ordinate
Mr. M.R.Sakhlkar
It was formidable task, but for the active guidance and help
from, all distributer of various mineral water and -
Mr. Goharjan Galbi (M.D of royal chill co.)
Mr. Zeeshan Kazi (M.D of bleu berry co.)
It would not have diluted into a research project
My novice knowledge of practical world not have got me far,
had not been under direction of Prof. Ashwin Deosthali I would
express my gratitude to Prof. Ashwin Deosthali for her
philanthropic and overriding efforts for developing my career.
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AVOWAL
I the undersigned hereby declare that the project report titled study of “Mineral water industry and packaged drinking water” with the reference to the distributer of brands & packaged drinking plant of Ratnagiri:
1. Distributer of various brands ( Bisleri, Aquafina, oxyfresh, kinley)
2. Royal Jal (C-219 M.I.D.C behind finolex academy, mirjole, Ratnagiri)
3. Bleu Berry (plot no. 20, MIDC, zadgaon block, Ratnagiri )
Is an original work by me under the guidance of Prof. Ashwini Deosthali.
The findings and suggestions of the study are based on the Data collected by me. This is my original work and this has not been previously submitted for the award of any degree or diploma of this or any other university.
Date:Place:
Shristi Badrinath Tiwari
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INDEX
1. Introduction
2. About Indian Bottled Water Market
3. SWOT Analysis Of The Bottled Water Industry
4. . Market Segmentation
5. Consumer Habits And practices
6. Legal Requirements
7. Taxes & Advertising Strategies
8. Market of water bottle industry in Ratnagiri
9. Brand Wise Details
10.Case study
11.CSE Report On Mineral Water Brands
12.Future Outlook
13.Conclusion
14. BIBLIOGRAPHY&WEBSITES
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CONTENTS:-
INTRODUCTION
HISTORY OF MINERAL
WATER
TYPES OF WATER
PURIFICATION AND
FILTERATION PROCESS
LABELLING
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Introduction
To
Water BottledIndustry
CHAPTER
I
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1 INTRODUCTION
Water forms an essential part of every living being. After air,
water is the most important necessity for life. Water plays a number of
functions for the body. It serves as the body's transportation system, it
acts as a lubricant, it regulates the body temperature etc. The eulogy for
water is an unending thing. In fact more than 2/3rd of the human body is
made of water. The importance of water for human body can be well
accessed from the fact that if the amount of water in our body is reduced
by just 1-2%, we feel very thirsty. If it's reduced by 5%, our skin will
shrink and we will have difficulty moving our muscles and if it's reduced
by 10%, we will die.
Moreover with this commodity being a human necessity it makes best sense to do business in. As a normal human being requires on an average needs 2-3 litres of water everyday and world population is more than 6 billion (growing at 2-3% annually), the business opportunity is humongous and the potential is largely untapped. These facts about water added to the growing number of cases of water borne diseases, increasing water pollution, increasing urbanization, increasing scarcity of pure and safe water etc. have made the bottled water business quite lucrative. In addition with getting pure drinking water from municipal taps in cities and towns becoming a luxury the scenario has become so lucrative in business sense that the opportunity is being misused by a number of companies especially in our country. These companies are selling plain tap water under the name of mineral water and are be-fooling consumers. The situation has got aggravated by lack of awareness among common people about mineral water and also due to lack of initiatives on part of the government both on count of setting
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stringent norms as well as on taking action against non-compliers. In fact
one of the major factors for flourishing of the sector is the public fear that water supplied by civic bodies is impure. Health benefits Our bodies are made of mostly water which is lost by natural processes throughout the day through sweating, urinating, and breathing. It is essential that this is replaced as a lack of water can have devastating consequences. Activities such as manual labour and exercise increase the rate of loss of water. Below benefits of water are mentioned.
Regulation of body temperature removal of waste product from our bodies.
Dehydration Headaches Constipation Smelly urine with strong color Joint pains Keep the skin soft and ward off the signs of ageing
Control level of body salts. Maintain muscle tone Keep you alert May help in the prevention Keep you alert May help in the prevention of gastric problems and kidney
stones
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1.1 HISTORY OF MINERAL WATER
INTERNATIONAL SCENARIO:
The tradition of bottled water and mineral water is not very old. Even in western countries the practice of bottled drinking water started in 1950s. The trend of having mineral water gained grounds in the market.
Since ancient time people have used water from mineral springs, especially hot springs, for bathing due to its supposed therapeutic value for rheumatism, arthritis, skin diseases, and various other ailments. Depending on the temperature of the water, the location, the altitude, and the climate at the spring, it can be used to cure different ailments. This started the trend of using mineral water for drinking purpose to exploit the therapeutic value of the water. This trend started gaining momentum in mid 1970s and since then large quantities of bottled water from mineral springs in France and other European countries are exported every year.
The concept of bottled has been quite prevalent in western countries due to
greater health consciousness and higher awareness about health and hygiene.
The international standards regarding bottled water are so stringent that for a
particular brand of water to be certified as bottled water it has to get
approvals on four levels: federal, state, trade association and individual
company levels.
In United States, the bottled water industry is regulated on four levels:
federal (by the U.S. Food and Drug Administration as a food product), state,
industry association, and individual company. EPA (Environment Protection
Agency) regulates public water systems. FDA regulates bottled water that
crosses state lines.
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NATIONAL SCENARIO:
In 1967 Bisleri set up a bottling plant for manufacturing and marketing its
mineral water but failed. The brand was later sold off to Parle in 1968-69.
Mineral water market had its seeding as early as 1968-69 when Parle Group
acquired the Bisleri brand from Bisleri of Italy for launching Soda water but
later launched bottled water also. The launch at that time was a big flop as
concept of buying water that too in bottled form was not accepted by the
Indian public. The market remained dormant for quite long (for a period of
20 years or so). The market throughout this period was formed only by the
premium products that too available through 5-star hotels. In early 1990s
with onset of liberalization policy by the Indian government , coming in of
cola majors, sell off of local soft drink brands of Campa, Thumps up, Gold
Spot etc by Parle to Coke and other factors led Bisleri to test waters again.
Bisleri re-launched its bottled water in 1994. By this time with exposure of
media and exposure to international life styles, deteriorating levels of potable
water, increase in a number of water borne cases, increase in awareness
about health and hygiene and other related factors led to acceptability of
concept of mineral water. The market has not looked back ever since then
and has grown leaps and bounds to such an extent that a number of genuine
as well as fly-by -night operators have entered it to milch it.
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1.2 SOME OF THE STANDARDS GOVERNING THE BOTTLED
WATER INDUSTRY IN UNITED STATES ARE:
Water is classified as bottled water or drinking water, if it meets all
applicable federal and state standards, is sealed in a sanitary container
and is sold for human consumption.
Bottled water cannot contain sweeteners or chemical additives (other
than flavours, extracts or essences) and must be calorie-free and sugar-
free.
Flavours, extracts and essences -- derived from spice or fruit -- can be
added to bottled water, but these additions must comprise less than one
percent by weight of the final product.
Beverages containing more than the one-percent-by-weight flavor
limit are classified as soft drinks, not bottled water.
Bottled water may be sodium-free or contain "very low" amounts of
sodium.
Tap water uses Chlorine as a disinfectant bottled water uses Ozone as
a disinfectant.
Bottled water should not contain chlorine.
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1.3 HOW IS BOTTLED WATER DIFFERENT FROM TAP WATER?
Consistent quality and taste are two of the principal differences
between bottled water and tap water. While bottled water originates from
protected sources - largely from underground aquifers and springs - tap water
comes mostly from rivers and lakes.
Another factor to consider is the distance tap water must travel and what it
goes through before it reaches the tap. In compliance with international
regulations, bottled water is sealed and packaged in sanitary containers. If a
bottled water product is found to be substandard, it can be recalled. This can't
happen in case of tap water.
According to regulations in the US, when bottled water is source from a
community water system the product label must state so clearly. However, if
the water is subject to distillation, deionization or reverse osmosis, it can be
categorized that way, and does not have to state on its label that it is from a
community water system or from a municipal source.
Processing methods such as reverse osmosis remove most chemical and
microbiological contaminants.
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1.4 TYPES OF WATER
1. ARTESIAN WELL WATER :
Bottled water from a well that taps a confined aquifer (a water-bearing
underground layer of rock or sand) in which the water level stands at
some height above the top of the aquifer. Another name for bottled water.
Accordingly, drinking water is water that is sold for human consumption
in sanitary containers and contains no added sweeteners or chemical
additives (other than flavors, extracts or essences). It must be calorie-free
and sugar-free. Flavors, extracts or essences may be added to drinking
water, but they must comprise less than one-percent weight of the final
product or the product will be considered a soft drink.
2. MINERAL WATER :
Bottled water containing not less than 250 parts per million total
dissolved solids may be labeled as mineral water. Mineral water is
distinguished from other types of bottled water by its constant level and
relative proportions of mineral and trace elements at the point of
emergence from the source. No minerals can be added to this product.
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3. PURIFIED WATER :
Water that has been produced by distillation, deionization, reverse osmosis
or other suitable processes can be labeled as purified bottled water. Other
suitable product names for bottled water treated by one of the above
processes may include "distilled water" if it is produced by distillation,
"de-ionized water" if the water is produced by deionization, or "reverse
osmosis water" if the process used is reverse osmosis.
4. SPARKLING WATER :
Water that after treatment and possible replacement with carbon dioxide
contains the same amount of carbon dioxide that it had at emergence
from the source.
5. SPRING WATER :
Bottled water derived from an underground formation from which water flows
naturally to the surface of the earth. Spring water must be collected only at the
spring or through a borehole tapping the underground formation finding the
spring.
6. WELL WATER :
Bottled water from a hole bored, drilled or otherwise constructed in the
ground, which taps the water of an aquifer.
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1.6 PURIFICATION & FILTERATION PROCESS
Purity and safety are two major factors that should be taken care in sourcing
and processing of bottled water. Under ground water is used by it for filling
the water. Underground spring is carefully selected based on its portability
and pathogen free water. Great care goes in tapping this source. Only water
below 25 meters is tapped. This is to avoid any surface contamination to
percolate and mix with underground water source. Area surrounding the
water collection tube at the surface is protected and kept clean.
The underground water goes through seven stages of purification
process which is as follows :
1) CHLORINISATION :
First of all water is taken out from six bore wells
and stored in the tank and chlorine is mixed in
it. This is done to remove bacteria from water.
2) SAND FILTRATION:
Chlorine mixed water is passed through seven
layers of sand in tank. This way all the major
bacteria are taken out from water
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3) CARBON FILTER:
After sand filtration water is passed through
carbon filter to remove the chlorine that was
mixed earlier.
4) ULTRA FILTRATION:
Under this method water is passed through a
filter, which has the pores of 0.2 microns, and
even the biggest r of bacteria is of 0.5 microns,
hence through this filter even the remotest
bacteria and dust particles are taken out.
5) REVERSE OSMOSIS:
As per the law TDS (total dissolved solids) are
required to be maintained at the level of 70 - 110
ppm, through reverse osmosis TDS is maintained
at 100 ppm.
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6) OZONISATION:
Under this method ozone gas is mixed with
water. Ozone generated is used for disinfection
of water Increases the shelf life of bottled water.
Provides residual disinfection effect in bottled
water.
7) ULTRA VIOLET STERILISATION
Under this method ultra violet rays are passed
through the water to kill water. This is basically
a precautionary step to purify water as after
reverse osmosis no bacteria remain in water.
After whole this process at last step
bottles are passed through a white screen where a quality in charge inspect
each and every bottle to ensure that there are no dust particles in the bottles
and if they are found then those bottles are rejected.
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WATER TREATMENT SCHEEM FOR PACKAGED DRINKING
WATER
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Chemical Dosing System
Storage Tank
Sand Filter Activated Carbon Filter
Softener Reverse osmosis system
FILLINGMACHINE
WACHING MACHINE
OZONIZATION
STORAGE TAMK
ULTRAFILTRISATIONSYSTEM
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1.7 LABELLING
STANDARD PERTAINING TO LABELING OF PRODUCT IN THE
INDUSTRY:
Label should have consumer brand name.
Label should have the name of the product category.
Label should have name and address of the manufacturer.
Label should have net weight or volume.
Label should have the batch number.
Label should have the name of source or place of origin of the product.
Label should have the date of packaging.
Label should have the date of expiry.
Label should have direction for storage.
Label should have treatment for disinfections.
Label should have the license or certification from the concerned
authority.
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1.8 COST OF PRODUCTION
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About
Indian
Market
Chapter
II
About Indian
bottled water
Market
Important facts
about Indian
market
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2 ABOUT INDIAN BOTTLED WATER
MARKET
The Water shortage around the world and particularly in third world
countries has opened new avenues for bottled water Industry. If we compare
the growth and status of Indian Bottled Industry with western or Asian
market, we are far behind in terms of quantum, infrastructure,
professionalism & standards’ implementation.
Multinationals have entered Indian Shores, making rapid strides in
Indian Market and have eroded market share, image and infrastructure of
leaders and small players alike. My belief is that through methodical
approach, Indian companies CAN withstand this onslaught, which is
threatening to gobble up the competition & eventually, the Market. Though
in a way, this entry has provided a semblance of professionalism to the
market and Indian firms HAVE noted the same. Unless a matching product,
not necessarily coming from huge infrastructure matching them, is brought in
the market, it would be reduced to NO COMPETITION
If one has general perception that bottled water in India is a saturated
Market now, take my words: it is just the beginning and thirsting for more,
day by day…
DEMAND OF WATER WOULD NEVER GO DOWN… & WATER
WOULD NEVER BE OUT OF BUSINESS……..
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India’s 1 billion plus population needs between 1-2 billion litres a day.
More than 200 brands of bottled water are being retailed across the country.
An estimated 850 million liters of bottled water is bought every year.
As we can see from the diagram above that most of the sales of Bottled water comes in the summer season. Therefore, the right time to launch such type of product is summer season.
In monsoon time also a good response can be generated because there are people who are very much conscious of their health and this makes them to go for packaged water. Therefore, the sales are good in rainy season.
In winter season the sales are very low because of climatic conditions.
The bottled water industry is estimated to be a whopping Rs 1,000 crore business. It has grown at a rate of 40-50% annually over the past four years
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rainy winter summer
0
20
40
60
80
100
sales
sales
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or so. According to the Bureau of Indian Standards, there are 1,200 bottled
water factories all over India (of which 600 are in the state of Tamil Nadu). Shockingly, in most cases, the industry is making money practically for free, as bottling companies pay a minute amount to the government for the use of groundwater.
Over 100 brands are battling over the bottled water market, hard-selling their products in every way possible -- better margins to dealers, aggressive advertising, and catchy slogans .
Parle was the first major Indian company to enter the bottled water market in the country when it introduced Bisleri in India 25 years ago and created “Bisleri” as the synonym of mineral water but now that image is getting deteriorated with the entry of major international giants like Coca cola, Pepsi, Nestle and noticeable presence of national players like Mount Everest, Manikchand, Kingfisher. Their distribution network with professional marketing approach has resulted to capture the major chunk of the bottled water market though they are receiving good fight from the local players as well. One thing have to be noted in this business is that the required infrastructure and the distribution network requirements are same for major players and small or local players but in as per my belief where they can make difference is the only marketing and branding part.
The real boost to bottled water came in the early- to mid-1980s with the growth of PVC packaging and, later, PET bottles. By the mid-1990s, many more players had entered the market, and competition was stiff: Coca-Cola’s Kinley, Pepsi’s Aquafina, Nestle’s Pure Life and a host of smaller companies. By 2002, Kinley overtook Bisleri, with a market share of 35.1% compared to Bisleri’s 34.4%. Kinley’s slogan, ‘boond boond mein vishwas’ (reliability in every drop), capitalized on the unreliability of ordinary piped drinking water.
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Almost all the major international and national brands water bottles penetrated in the Indian market and are available at right from the malls to railway stations to bus stations to multiplexes to grocery stores and even at panwala's shop. It has penetrated so deeply in to market and now it’s become very common to consume bottled water whereas before few years it was considered as the rich people's choice and fashion to consume bottle water. Thanks to low pricing and aggressive marketing strategies adopted by the multinationals. Some surveys show that truck drivers on highways form a major chunk of bottled water drinkers. Penetration in rural areas is another significant factor that is likely to play a key role in the development of the bottled water trade.
The summer of 2002 witnessed a ‘packaging revolution’ of sorts, with Coca-Cola India launching Kinley in 200 ml cups. The cups, priced at Rs 3 each, were first rolled out in pockets of Gujarat, and gradually spread nationwide. With this initiative in place, Coca-Cola began to generate market share from the institutional segment, such as restaurants and hotels, caterers, and transport channels like buses and trains.
The major growth in packaged water, however, was in the bulk water segment. According to estimates, bulk water packs of 20 litres, targeted at the institutional and home segments, grew at a rate of 30-40% in 2002 alone. Bisleri re-invented its 20-litre jumbo home pack, fitted with a spout, to acquire a more ‘consumer-friendly’ image.
According to industry estimates, the main consumers of packaged water are no longer restricted to the upper class but include middle class and lower-middle class families as well. The ‘rural’ market is currently dominated by tourists and travellers; packaged water is now beginning to be seen as an essential appendage to any form of travel.
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The Indian market is estimated at about Rs 1,000 Crore and is growing at whopping rate of 40 per cent. By 2010, it will reach Rs 4,000 - 5,000 Crore with 33 per cent market for natural mineral water. According to a national-level study, there are more than 200 bottled water brands in India and among them nearly 80 per cent are local brands. In fact, making bottled water is today a cottage industry in the country. However though having the large number of small and local producers, this industry is dominated by the big players like - Parle Bisleri, Coca-Cola, PepsiCo, Parle Agro, Nestle, Mount Everest, Kingfisher and Manikchand and so on. These players can be called as the trend setters in the marketing of packaged drinking water.
The recent industry figures indicates that the sales of bottled water grew from $189 million (USD) in 2003 to $599 million in 2008 -- a growth rate of 216 percent and it is expected that this figures will be doubled in the next five years. This growth rate makes Indian Bottled water market as one the fastest growing in the world. The factors contributing to such a rapid growth are sound economy, disposable income of the people, poor public water distribution system and infrastructure and the Indian government hardly cares for what happens to the nation's water resources. However like each industry is facing the challenges the Indian bottled water industry is also having bottlenecks like poor transportation infrastructure, low entry barriers, difficulties in brand recognition and sometimes threats from the environment protectors and social activist against the use of bottled water. Though ignoring all these hurdles and only looking at the above mentioned growth rate figure many bottled water companies think about their future business plans. For e.g. PepsiCo announced that it will double the investments in its Indian beverage business in 2009. The company's Indian beverage investments will be now total $220 million. Mount Everest Mineral Water, a subsidiary company of Tata will has also launched a bottled water brand for the mass market. Mount Everest presently sells only premium drinking water under the Himalayan brand.
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And largely Urban centric
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2.1 Important facts about Indian market
52%
15%
5%
28%
south north east west
It is currently heavily South Biased
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Growth driven by Rural and Small Towns
All Regions seeing healthy growths
Metro ROU Rural
% Growth 12% 28% 38%
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What is fueling this Industry growth?What is fueling this Industry growth?
Region % Growth
North 25%
East 31%
West 20%
South 26%
India 24%
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Higher disposable income Increased On-the-go behaviour
Importance of Hygiene Increased Availability
7 Lakh 9 Lakh outlets
Affordable Price Points
The growth is expected to continue given the low Per Caps
The growth is expected to continue given the low Per Caps
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Barriers to Growth
• Availability /Scale
• Quality standards of unorganized players leading to loss of
confidence in the industry
Triggers
• Growth in affordable packs at Rs.5 and Rs.10
• More variants in the top end (Mineral and fortified waters)
• More health/hygiene consciousness
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SWOT
ANALYSIS OF
THE BOTTLED
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Chapter
IIICONTENTS:-
Strength
Weakness
Opportunity
Threat
SWOT
ANALYSIS OF
THE BOTTLED
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3. SWOT ANALYSIS OF THE BOTTLED WATER
INDUSTRY
STRENGTH
The industry is growing @ 40%. In India the market is huge & untapped Growing awareness among the people about the importance of mineral
water
WEAKNESS
Many players entering in the race. Any local person can start manufacturing. Rural population is not using the packaged water. Not very economical Quality not properly maintained e.g. Bisleri & hence has bad effect on
the whole
OPPORTUNITY
Sustained Market growth increase in coming years Literacy rate growing and hence the awareness of safe drinking water
to avoid the diseases. Huge population & untapped market.
THREAT
Many substitutes available
Too many players will dilute the market & the profit margin
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MARKET
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Chapter
IVCONTENTS:-
Market Segmentation According To Consumer
Market Segmentation According To
Pack sizes
MARKET
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4. MARKET SEGMENTATION
The mineral water market is segmented according to the type of
consumers:
Foreign Tourists :
Foreign tourists have been the main consumers of the mineral water as
they face a lot of digestion problems due to different food habits.
Domestic Tourists :
Domestic tourists have switched to mineral water mainly because of
safety and hygiene factors.
Fashion Conscious :
Like soft drinks, drinking mineral water is also considered fashionable
by some people.
The mineral water consumer is mainly in the age group of 20-35 years
and is an educated middle class person. This is also the segment of fruit
drinks, which have usually been positioned as fun and health drink for young
adults.
The mineral water market is also segmented along pack sizes:
One litre bottle : it is meant to spell safety and security for consumers.
It is positioned on a prestige platform for the achiever segment - who
like to make a fashion statement by drinking mineral water. This
segment gets the maximum sales.
500ml bottle : This size has been introduced in the market target the
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individual and local travelers.
PET bottles: The size of the PET bottles varies from 10 to 20 liters.
These are mainly for institutional sales (Wedding parties, Hotels,
Corporate, etc.)
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Consumer
Habits
And
Practices
Chapter
V
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
Consumers are growing more health conscious and are more careful
of their drinking habits.
Brand loyalty is very low as all the products taste the same so they can
buy just any product which is on the shelf, same as that of soft drinks
and fruit beverages.
Availability in the chilled form and brand awareness plays a crucial
role in purchase decisions.
While there is no aversion to consumption of mineral water by any age
group, this product is mainly consumed by the people in the age group
of 20-35 years who have less attraction of soft drinks or other
synthetic drinks whereas youngsters look in for soft drinks and fruit
beverages to quench their thirst.
Visibility is another factor that should be taken care of by the
companies as consumers are not very brand loyal and consume
whatever is in front of them
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Chapter
VICONTENTS:-
The Prevention of Food Adulteration Act (PFA)
The Bureau of Indian Standards (BIS)
Legal
Requirement
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
6. LEGAL REQUIREMENTS
The bottled water industry is governed by PFA and BIS standards. Some
of the key highlights of these legislations are:
Mineral water is covered under the Prevention of Food Adulteration
Act (PFA), while drinking water is not under its preview.
Drinking Water is excluded from the purview of the (PFA) Prevention
of Food Adulteration Act, 1954. Except for the specification that water
used in the preparation of a food article shall be free from micro
organisms likely to cause diseases and should be free from chemical
constituents that might impair health.
The Prevention of Food Adulteration Act (PFA) of 1954, whose
stipulation is mandatory, has set standards only for mineral water and
defines it as water obtained directly from potable natural or drilled
sources that contain a substantial amount of non-toxic, health-related
mineral salts.
The PFA rule on mineral water is that it must be free from dirt, foreign
matter or any other ingredients injurious to health and has to be packed
in clean and sterile containers.
The Bureau of Indian Standards (BIS) has provided standards for both
drinking water and mineral water but compliance hitherto was
voluntary
To regulate the quality and price of bottled water, BIS approval has
been made mandatory w.e.f. end of 1999
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Mineral water shall be packed in clean, colourless, transparent and
tamper-proof bottles made of polyethylene conforming to the IS 10146
standards.
The standards laid down under PFA Act do not prescribe any minimum
quantity of minerals to qualify as mineral water.
Hitherto Indian laws do not stipulate the minimum mineral content
level required for water to be labelled as a mineral water
The BIS does not lay down any guideline or practice for processing
water.
There is no specific industrial licensing policy for the bottled-water
sector. Thus any one can set up a plant can do so without establishing
the source of the water and the technology used to purify it.
Both the PFA Act and BIS state that the water must be completely free
of bacteria like salmonella, E-coli, faecal streptococci, v. cholera and
shigella that cause a range of illnesses such as cholera, typhoid,
dysentery and various types of gastro-enteritis
Both the PFA and BIS lay down standards for metals like lead,
mercury, arsenic, aluminium and barium which cause a range of
disorders
The BIS lays down a minimum of 150mg/l and a maximum of 700
mg/l of TDS for mineral water.
The PFA rules do not prescribe any minimum TDS levels but does
mention the maximum of 1500mg/l
There are no government laboratories for testing water samples for all
the parameters involved
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Contents:-
Types of charges
charged
Cost incurred
Modes strategies
Taxes
&
AdvertisingStrategies
Chapter
VII
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
7. TAXES & ADVERTISING STRATEGIES
The cost of processing the water is around 20-30 paise/litre the major
cost is of the taxes
Also the taxes are quite high. The taxes are as under:
SR.NO Types of Taxes charged & cost
incurred.
%
Contributio
n
1 Octroi 4.5
2 Sales Tax 7.5
3 Excise 15
4 Transportation 10
5 Distribution Margin 12
6 CNF’s 2-3
7 Retailers Margin 40
8 Advertising – cost varies --
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ADVERTISING:
Advertising is any paid form of non-personal presentation & promotion of
ideas, goods or services by an identified sponsor.
Modes of advertising:
Newspapers, billboards, glow signs, banners, inflatable etc.
TV.
Mails.
Radio.
Magazines.
Yellow pages.
Newsletters.
Brochures.
Telephone.
Internet.
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Chapter
VIII
Market
Of
WaterBottle
IndustryIn
Ratnagiri
Contents:-
Brands Available
Retail Outlets
Market Categories
Retail outlets Findings
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
8. Market of water bottle industry in Ratnagiri
POPULATION – RATNAGIRI
According to 2008 census of India Ratnagiri had a population of 500,000
people
MALE – FEMALE COMPOSITION
MALES55%
FEMALES45%
Consumption of Ratnagiri:-
The market size of Packaged Drinking Bottled water is around 1000.
And Mumbai market constitute around 10% which is 100 crore. Compare to
these data Ratnagiri constitute only o.1% of total market
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8.1 LIST OF POPULAR NATIONAL COMPANIES Brand available in Ratnagiri.
Bisleri
Bailley
Kinley
Aquafina
Oxyfresh
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8.2 RETAIL OUTLETS
SR. NO CLASSIFICATION PERCENTAGE
1 GROCERY & GENERAL STORES 15%
2 DEPARTMENTAL STORES 5%
3 HOTELS & RESTAURANTS 50%
4 BEER BARS 0.5%
5 PAN BIDI SHOPS 9.5%
6 OTHERS 20%
The above information is collected by the distributer of water bottles in
Ratnagiri.
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8.3 BRAND WISE SHARE
38%
20%8%
11%
6%
17%
BisleriKinelyOxyfreshAquafinaBailleyOthers
BRAND WISE MARKET SHARE %
After visiting various dealers and distributors the above data has been
collected.
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8.4 MARKET CATEGORISATION
The market of packaged drinking water is categorized as follows:
Theatres / cinema halls/ multiplexes.
Corporate.
Caterers.
Picnic spots, Clubs, Gymkhanas.
Hotels, Resorts.
Resorts.
In-flight kitchens.
College canteens.
General Stores etc.
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CATERERS
Usage Pattern:
Users65%
Non-Users35%
USAGE PATTERN IN CATERERS
Payment Terms:
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74%
26% Cash Credit
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Other Findings:
Price closely followed by Service, Storage, Ease of operation &
Availability are the key factors affecting the buying decision process. They
are willing to pay only unto a maximum of Rs 2.50 per liter which is too
below the price that any branded player can afford to sell
Credit is a key factor that was revealed by most contractors after
intensive probing. The credit period expected by most was from 15 days to
a month. They mostly avoid dealing directly with companies for this very
reason & prefer to buy through the company’ intermediaries who provides
them the necessary credit
Most contractors expect the provider to supply directly to the
wedding/party site, as they generally do not have the space to stock the
bottles.
Brand name has absolutely no relevance to them
8.4 HOTEL AND RESTAURANT
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Payment Terms:
PAYMENT TERMS - HOTELS & RESTAURANTS
Service Frequency: Alternative Day
Findings:
Price closely followed by Service, Taste of water and Ease of
operation are the important factors that affect the buying decision
process.
Hygiene is a very important factor when a customer decides to
snack/eat in a particular outlet. More so when we interviewed food
stalls in Juhu Chowpatty a majority of the food stall owners said that
they now provide their customers with the 1 liter Bisleri bottle as
many customers refuse to accept the water offered to them.
Respondents showed a fair level of brand awareness but there was no
distinct preference to any particular brand. Bisleri had a fair level of
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65%
35%
Cash Credit
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unaided recall vis-à-vis other brands like Bailey, Kinley, etc.
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8.5 RETAIL OUTLET FINDING :
Small Space
Less Quantity and more frequency of purchase
Look out for schemes.
Bigger Margin, More preferences.
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CHAPTER
IX
BRAND
WISE
DETAILS
CONTENTS:-
BISLERI
KINLEY
AQUAFINA
BAILLEY
OXYRICH
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
9. BRAND WISE DETAILS
A Survey Format of ‘Distribution- Network’ of “Packed Bottled Water”
1. Name of Company:
2. Brand:
3. Name of Distributor:
4. Area:
5. Address & Tel. No:
6. List of staff appointed:
7. MRP to distributer:
8. Quantity required:
9. Profit margin:
10.Scheme:-
ltr:
2 ltr:
11.Distribution weakness:
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9.1 PARLE BISLERI PRIVATE LIMITED
Bisleri have been the market leaders in India as far as mineral waters are concerned. Every time their bottle and waters are checked and rechecked for its purity. Their main aim is to stay ahead of the main rivals i.e. Pepsi and Coca Cola. Their raw material comes from reliance industries limited who are their main suppliers of the raw material i.e. PET. Bisleri has been the first to introduce mineral water to India. For over 30 years, Bisleri remains the pioneers in the bottled water industry with its ever-evolving innovations and product offerings.
Brand: Bisleri
Address: Parle Bisleri Pvt. Ltd., Western Eastern Highway, Andheri (E).
Product: Packaged Drinking Water
Design:
Quality: ISI Marked.
Packaging: Pet Bottles
Target Market Segment: Health Conscious people
Positioning: Safe Water
Trade Promotion: Corporate Event, Play safe Campaign, and
Mobile Van, Stressing on Seal
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Distribution
Bottling plant (Andheri), The Company directly approaches
the distributer. They have tracked through various routes and accordingly
they service. Their major hub is Santacruz, Vile Parle & Andheri in
Suburbs.
Distribution in Ratnagiri: The distribution of Bisleri bottle in Ratnagiri is
done by M/s suresh & sharad. They distribute only in Ratnagiri city. No
target is set by the company or by them.
Quantity required: as per the demand of public, minimum 600 box
(off season) 2000 box(in season)
Transportation information: transportation cost is carried by the
company .the goods are transported from Pune to Ratnagiri .damage
replacement is done if any.
MRP;Rs. 120
Net cost price (for distributer):Rs. 108
Margin of Rs. 12 (10 %)
Manpower per vehicle : 1 loader
1 Driver
1 salesman
Schemes: flat (no scheme)
Liter available:1ltr, 1/2 liter, 2 liter, 20 liter(only in season)
Distribution Weakness: Company is not addressing the compliant
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from distributor and end user. Company does not use Polycarbonate Jars
in 20 Liter, which result in loss of face value and ultimately losing
customer.
Some time shortage in season. Credit facility is not allotted
to distributer goods are supplied on advance basis
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9.2HINDUSTAN COCA COLA BEVERAGES PRIVATE LIMITED
Company: Hindustan Coca cola Beverages Private Limited
Brand: Kinley
Product: Packaged Drinking Water
Design:
Quality: ISI Marked.
Packaging: Pet Bottles, Polycarbonate Jars
Target Market Segment: Health Conscious people
Positioning: Safe Water
Trade Promotion: Effective TV ads (Boond Boond mien vishwas), Banking
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on Parent Brand, Mobile Van.
Distribution:
Kinley sell their products through their own network only. They
have appointed HDA (Home delivery Agent) for some area to sell their
product.
Distribution in Ratnagiri: The distribution of Aquafina in Ratnagiri is done
by Sheela enterprises. These enterprise also distribute the bottles in taluka
of Ratnagiri
Quantity required: As per the public demand, minimum 800 boxes is
required every month.
Transportation information: Transportation cost is carried out by
company. The transportation is carried on contract basis. Goods are
transported from Pune to Ratnagiri.
MRP:Rs 135
Net cost price (for distributer): Rs. 126
Margin of Rs: 9
Manpower per vehicle:1 driver
1 loader
1 store keeper
2 helper
Schemes: Flat (no scheme)
Liter available: 1 liter, ½ liter, 2 liter
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9.3COMPANY: PEPSICO INDIA LIMITED
Brand: Aquafina
Aquafina was first launched in USA in the year 1994 and with its unique purification system and great taste, Aquafina soon became the bestselling brand in the country.
In India, Aquafina journey began with the Bombay launch in 1999 and it was rolled out nationally by the year 2000. On the strength of its brand appeal and distribution, Aquafina has become one of India's leading brands of bottled water in a relatively short span.
Brand Advantage
Aquafina goes through a 5 step state-of-the-art purification process to give consumers pure water and perfect taste every time. Aquafina has been built through refreshing and edgy advertising. The ‘What a Body’ campaign has enabled the brand to drive modern, premium, and youthful brand imagery in an otherwise undifferentiated category.
Bottled across India in 19 plants, Aquafina ensures its availability across more than half a million outlets. To cater to varied consumer needs and occasions, it is available in various pack sizes like 300ml, 500ml, 1 ltr, 2 ltr bottles and in bulk water jars of 25lts.
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Aquafina is the face of PepsiCo’s water conservation initiatives and builds awareness on PepsiCo’s efforts to replenish and restore the water table through its pack-labels.
Product: Packaged Drinking Water
Quality: ISI Marked
Packaging: Pet Bottles
Target Market Segment: Health Conscious people
Positioning: Safe Water
Trade Promotion: Banking on Parent Brand, Banners.
Distribution in Ratnagiri: The distribution of Aquafina in Ratnagiri
is done by maitri sales. These enterprise also distribute the bottles in
taluka of Ratnagiri (ganpatipule, jaigad, zakadevi).
Quantity required: minimum 500 boxes per month
Transportation information: Goods are brought from sawantvadi to Ratnagiri. Transportation cost is carried by the company. Transportation work is done on contract.
MRP:Rs 146
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Net cost price (for distributer): Rs. 132
Margin of Rs: 14 rs(10 % profit)
Manpower per vehicle:1 driver
2 loader
1 helper
Scheme: 12 Boxes on that 2 boxes free
Liters available: 1 liter, ½ liter
‘Distribution Weakness:
It seems that the Company is not pushing their packaged water brand
“Aquafina” and concentrating on Beverages market.
Many times their products are not available in the market.
Aquafina packaged Bottles water is given in a scheme to promote their
Beverages brand
Sum time there is shortage in season because of which distributer has to
face problem.
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9.4 COMPANY: PARLE AGRO PRIVATE LIMITED.
Brand: Bailey
Bailley: Launched in 1993, Bailley is one of the first Packaged Drinking
Water Brands in India and is counted amongst the top water brands. It is
developed to cater to the Indian palate. Bailley is the first packaged drinking
water brand which tied up with airlines to serve in flight customers safe
packaged drinking water. Bailley keeps itself active by regularly making
pioneering efforts. It is the first water brand to be issued an ISI certification.
The first to launch special four-sided 200ml bottles catering to premium
airlines like Jet Airways and British Airways.
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Product: Packaged Drinking Water
Quality: ISI Marked
Packaging: Pet Bottles, Polycarbonate Jars
Target Market Segment: Health Conscious people
Positioning: Safe Water
Trade Promotion: Mobile Van
Manufacturing plant: sindhdurag
Distribution in Ratnagiri: The distribution in Ratnagiri is done by pioneer
sales. These enterprise also distribute the bottles in taluka of Ratnagiri
(ganpatipule, jaigad, zakadevi).
Quantity required: minimum 800 boxes per month(off season) & 300 boxes (in season)
Transportation information: Goods are transposed r from sindhurga
to Ratnagiri. Transportation cost is carried by the company.
Transportation work is done on contract bases.
MRP:Rs 100 or 95
Net cost price (for distributer): Rs.90
Margin of Rs: 10
Manpower per vehicle:1 driver
2loader
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1 helper
Scheme: no scheme
Liter: : 1 liter, ½ liter, 2 liter
Distribution Weakness:
The Company is losing out its share on every front. Lethargic
Approach towards Market. No Advertisement, Lack of Aggressiveness.
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9.5 MANIKCHAND GROUP – OXYRICH
BRAND- OXYRICH
Now Oxyrich perfectly blends water and oxygen in a totally natural process. The result is highly oxygenated water that contains up to 700%
more oxygen than other waters. This is a major development for health, nutrition and wellbeing.
Dhariwal Industries Ltd - Food & Beverages division has one of the most modern and comprehensive packaged drinking water facilities spread across India. The facilities are fully integrated with in house facilities for manufacturing of Performs, Closures/Caps and Bottle Blowing. The labels and cartons are also made in the group companies to ensure total control on quality and processes. Their plants are spread over the western, southern and northern regions. We have existing capacity to bottle over 3.6 crore liters a year (360 lakh bottles of 1 liter each).
ISO 22000 CERTIFIED:-Manikchand Oxyrich is the only bottled water with ISO 22000 certification. ISO 22000 is the latest and most stringent standard for safety in the food supply chain.
Product: Packaged Drinking Water.
Quality: ISO Marked
Packaging: Pet Bottles, Polycarbonate Jars
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Target Market Segment: Health Conscious people
Positioning: Safe Water
Manufacturing plant: Pune
Distribution in Ratnagiri: The distribution in Ratnagiri is done by yash
enterprises. They also distribute the bottles in Ratnagiri district.
Quantity required: minimum 1000 boxes per month(off season) & 2000 boxes (in season)
Transportation information: Goods are transported from Pune to
Ratnagiri. Transportation cost is carried by the company.
MRP:Rs 100
Net cost price (for distributer): Rs.92
Margin of Rs: 10
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Manpower per vehicle:1driver
1loader
1helper
Scheme: no scheme
Liter: : 1 liter, ½ liter, 2 liter, 20 ltr
Distribution Weakness:
According to the yash enterprises (distributer in Ratnagiri) they don’t
have any compliant regarding distribution. There is no distribution
weakness, they are completely satisfied
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Chapter
X
Case
Study
Contents:-
Blueberry
Royal Jal
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
10. Case Study
The further part of the project is a case study based on the local packaged dinking manufacturer’s constraint to Ratnagiri city. The case revolves around the manufacturers located in Ratnagiri, their production process, their marketing strategies, distribution system, and schemes and also how they manage competition.
There are basically two main packaged drinking water companies
Bluberry
Royal Chill
.
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10.1 Bleu Berry
INTRODUCTION:-
MR. ZEESHAN KAZI, M.D of Blueberry Company has entered the industry after noticing future scope for their product. He started his business on .his mission about his industry is to supply good and safe drinking water to his customer. His vision to be ranked first among all the water bottled industry in the Ratnagiri city.
Further the company details & strategies are given as follows:-
Name: Konkan Food and Beverages
Brand: Bleu berry
Area:Pl plot no. 20, MIDC, zadgaon,
block Ratnagiri
Liter available:
1liter
20 liter jar
Process:acf+ ro+ uv+ ozonation.
Quantity required:12000(off season)
25000(in season)
Manufacturing problem: Delay in raw material (pry form)
MRP to distributer: 61/box
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Distributer’s selling price 78/box
Profit margin for distributer: 17 (39.53%)
Scheme: (only for distributer):
1litre- 50 boxes-1 box free
20 liters – no scheme
Supply to:
Jsw jsw, sha shagun sweets, federal and
BOI bank in Ratnagiri konkan
railway
Distributed to Kankavli, mahad, Karnataka.
Their future planning is to manufacturer juices e.g. mango
As they feel competition is really tough in the market they believe in keeping
good relations with their customer for good sales, they want to expand their
business in future and also want to cover more and more area.
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10.2 Royal Jal
INTRODUCTION:-
Mrs. Goharjan gaibi, M.D of Royal Jal, is basically from
sangmeshwar but now she has got citizenship of U.K. she knows her
responsibility regarding her country, always concerned about Indian people.
She went through many business proposal but she choose these project as
according to her water is on the top of list regarding health and so she choose
to start water bottle industry in Ratnagiri to serve clean water. According to
her water is very important product n should be clean as if not can affect
ones health. Royal jal was stared on 2nd Sep 2009. They always aim to serve
clean and safe drinking water and their vision is to be a successful.
Further company details and strategy are given as follows:
Name: Royal Jal foods and beverages
Brand: Royal Chill
Name of owner: Goharjan gaibi
Area: c-219, M.I.D.C behind finolex academy, mirjole, Ratnagiri.
Littre available:1 litter
20 litter jar
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Process: acf+ ro+ uv+ ozonation
Quantity required: 500(off season)1000-1500(in season)
Manufacturing problem: delay in raw material
List of staff appointed: marketer, chemist, micro biologist, store keeping
Man power per vehicle: 2-3 workers
Selling price to distributer: 90/box (they don’t have any direct contact to customer.)
Scheme; (only to customer): 1 litre: 15 boxes- 1 box free
20 litters – no scheme
Supply to: jsw, bharti shipyard
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CHAPTER
X
CSE
REPORT
CONTENTS:-
WHAT WAS FOUND
GRAPH
A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________
11. CSE REPORT ON MINERAL WATER
BRANDS
Your bottled water is contaminated by pesticides. Gaping holes in
regulations and corporate irresponsibility in the fastest growing segment
of the beverage industry make a mockery of public health
New Delhi, February 4, 2003: We take it for granted that the bottled water
we drink is safe. But a Down To Earth exposé, based on tests conducted by
the Pollution Monitoring Laboratory of the Centre for Science and
Environment (CSE) shows otherwise.
After analysing 17 brands of packaged drinking water sold in and around
Delhi and 13 brands from the Mumbai region, the CSE lab found the samples
to contain a deadly cocktail of pesticide exceeding the standards specified as
safe for drinking water.
The samples had enough poison to cause in the long term, cancer, liver and
kidney damage, disorders of the nervous system, birth defects, and disruption
of the immune system. Pesticides do not kill immediately, but can cause
irreparable health disorders as they accumulate in the body fat.
The CSE lab tested for two types of pesticides: organ chlorine and organ
phosphorus. The findings were appalling. The four most commonly found
pesticide residues were lindane, DDT, Malathion and chlorpyrifos. Using
European Economic Commission norms for maximum permissible limits for
pesticides in packaged water, the CSE lab tests of samples from the Delhi
region showed that on average, each sample contained 36.4 times more
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pesticides than the stipulated levels. The Mumbai samples were a shade
better, primarily because the source water used by the industry was relatively
less contaminated.
CSE used European norms because the standards set for pesticide residues by
the Bureau of Indian Standards (BIS) are vague and undefined. The
standards say, "pesticide residues shall be below detectable limits". This, one
would assume, means that there ought to be no pesticide residues at all in the
bottled water. But no, it actually means that
one should not be able to find the pesticide residues in the water. The BIS
has specified the methodology for detecting pesticide residues and this
methodology, which is not very sensitive, does not detect pesticides unless
present in extremely high quantities.
Even for drinking water, the BIS norms specify that pesticide residues should
be "absent". What is plainly absurd is that if drinking water norms specify
that pesticides should not be present, how can packaged drinking water
norms be so vague, and use a non-quantifiable phrase, such as "below
detectable limits"? Even going by drinking water norms, all the bottled water
brands tested by the CSE lab would fail the test of quality.
What was found?
Top seller Bisleri was third from the bottom, with pesticide concentration
levels 79 times higher than the stipulated limits (see graph). Kinley had
concentration levels 14.6 times above the maximum permissible amounts.
Aquaplus — favoured by the Indian Railways — topped the dubious list,
crossing the limit by 104 times!
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Contamination levels were significantly lower in packaged natural mineral
water brands Himalayan and Catch from Himachal Pradesh, a state with
lower pesticide use.
In the Mumbai region, the worst brand was Oxyrich, with 16.7 times higher
pesticide concentration levels than the prescribed standards. Bisleri and
Kinley fared better in the Mumbai samples – they were ranked 7th and 4th
respectively.
The lab also collected raw water from bottling plants to verify its findings. In
all cases, tests showed that the pesticides found in the source water matched
the toxins found in the bottled water — proof that the source of the pesticide
residues is contaminated groundwater. Plants manage to eliminate
somewhere between 20 and 80 per cent of the residues. But no regulations
exist to ensure that bottled water plants are set up in clean groundwater
zones.
The study is important because of the implications for public health.
Pesticides ingested in small quantities over time are known to have severe
effects on the human immune system. What will it take for regulatory bodies
to tighten controls? Should the bottled water industry be allowed to play
havoc with public health and breach consumer trust?
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12. Future Outlook
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In my view, thanks to all these factors the Indian bottled
water industry will be booming in coming years and do not be surprise if
today’s bottles water industry becomes next Oil industry by 2025. The
present Indian entrepreneurs and those who are planning to take the plunge
in the bottled water business are thinking that the industry has reached to its
peak point, and having stiff competition, need to change their perception
because with the ever increasing demand of water the elephant is already
grown and looking at the future of water in India, is continuously growing
and one day it will turn into mammoth.
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13. Conclusions
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The packaged drinking water in India, which is estimated at Rs.850
cores with over 200 brands floating in the market, most of which have
restricted territorial distribution. This is a growing market in India as quality
consciousness among the consumers is on the rise. The bottled water market
is growing at a rapid rate of around 20%.At this growth rate, the Rs
7000million per year market is estimated to overtake the soft drinks market
soon. Multinationals, Coca-Cola, Pepsi, Nestle and others are trying to grab a
significant share of the market. There are more than 180 brands in the
unorganized sector. The small players account for nearly 19% of the total
market.
The per capita consumption of bottled water in India is less than half a
litre per year, compared to 111 litres in France and 45 litres in the US. These
points to the future potential beyond the high growth.
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BIBLIOGRAPHY:
1. A & M Magazine
2. Financial Express
3. Business world
WEBSITES:
1. www.google.com
2. www.rediff.com
3. www.lycus.com
4. www.search37.com
5. www.yahoo.com
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