Financial Daily from THE HINDU group of publications
Wednesday, Dec 18, 2002
Financial Daily from THE HINDU group of publications Wednesday, Dec 18, 2002 |
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Corporate
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Diversification Pepsi plans foray into bulk water segment Ratna Bhushan
NEW DELHI, Dec. 17 AS if the battle over market shares in the retail packaged water segment was not enough, the stage seems set to shift to the bulk water segment. According to industry sources, soft drinks major PepsiCo India is planning to foray in the bulk water segment shortly. "The company is investing in additional capacity at its plants in Bangalore and Chennai for its bulk water venture,'' sources said. Since the southern States are the biggest market for bulk water owing to factors such as scarcity and inferior quality of water, it is logical for Pepsi to begin its bulk water foray in this part of the country, sources said. Though details of the bulk water venture are still being finalised, the soft drinks major is expected to introduce bulk water under the Aquafina brand. Aquafina was launched almost two-and-half years ago, and is available in conventional retail pack sizes such as 500 ml and 1-litre bottles. When contacted by Business Line, the company spokesperson said, "Bottled water has a growing market, and we are looking at various options and exploring possibilities. However, we have not finalised any plans as yet.'' The packaged water segment is estimated at Rs 1,000 crore and is evenly split between the retail and bulk segment, according to industry estimates. Pepsi's Aquafina bulk water, expected to hit the market after a couple of months, will be up against stiff competition from Parle Bisleri and Coca-Cola India's Kinley. The 20-litre bulk water market has been witnessing aggressive action from both players. Mr Ramesh Chauhan is on record that the bulk water segment will spearhead Bisleri's growth over the next few years, and that it will account for 80 per cent of the branded water business within five years (double of what it is now). About a month ago, Bisleri had announced the relaunch of its 20-litre home pack with a more `consumer-friendly format' in thread fitting and valve cap, against the conventional snap-on fittings. Existing 20-litre Bisleri packs are now being withdrawn and the rollout of the new jars, priced between Rs 40-60, is already on. While Kinley claims leadership in the retail packaged water segment with a 37 per cent market share, which is about six percentage points ahead of Bisleri, Coke is aggressively pushing its 20-litre bulk business. Last year, for the bulk water segment in Delhi and Pune, Coca-Cola had tied up with Nuchem Weir and Thermax Culligan Water Technologies respectively. A similar contract was struck with the Chennai-based S.R. Minerals for marketing the Hello brand. Aquafina's market share in the retail segment is estimated at about 12 per cent.
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