The Indian bottled water industry began in 1965 with the introduction of Bisleri. Ramesh Chauhan, the founder, played a crucial role in its growth. Over the years, it has grown significantly, driven by concerns about water quality and safety. Despite the challenges, the brand Bisleri is expected to thrive. Rajat K Baisya, explores its journey and anticipates future acquisitions and ownership changes.
The bottled water industry in India can be traced way back to 1965, when an Italian doctor, Cesari Rossi and an Indian businessman, Khushroo Suntook, introduced Bisleri, bottled water in India by setting up a small factory near Thane in Maharastra. Initially, Bisleri was sold in star hotels and select restaurants in Bombay, now called Mumbai, in glass bottles in two variants -sparking (bubbly) and still. It is said that Parle Beverages was the sole distributor of Biselri in the initial years. Subsequently, this business was acquired by Jayantilal Chauhan, father of Ramesh Chauhan, in 1969. Bisleri India Pvt Ltd thus became a wholly owned subsidiary of Parle Beverages Pvt Ltd. However, till late 70’s Bisleri water business was small, it picked up momentum and started growing much later.
Origins of Bisleri in India: Pioneering Bottled Water
Bisleri launched its very successful cloudy lemon-lime soft carbonated beverage Limca in late 1971, which became a very successful brand. All marketing and promotional activities were aimed at highlighting Limca’s Italian connection and association. I joined Bisleri as a Development Engineer in 1973. The Bisleri, India’s first bottled water company, where I started my journey in the corporate world. When Bisleri introduced bottled water, it was in PVC bottles and then PET bottles when PVC was not permitted. However, sparkling water was bottled in glass bottles. We used process water by passing treated water through both UV lamps and Silver candle filters to destroy microbes. Silver is known to have a sterilising effect because of its oligo-dynamic properties. And we used the claim in our marketing communications. I don’t think anyone uses Silver Candle now.
The sale of bottled mineral water, or what we call packaged drinking water, was limited only to select-star hotels and restaurants. During the seventies, Bisleri’s sales of water were around 1 lacs cases (1 case containing 12 bottles of 1 litre each) annually, and each bottle was selling at Rs 5 in star hotels and high-end restaurants. As such, the total market was around INR 60 lacs. The same Bottled Water Market now is valued at USD 2,970. 61 million in 2021, and is anticipated to reach USD 7,897. 20 million by 2029, exhibiting a CAGR of 13% during the forecast period.
Bottled water market in India
Yet another estimate puts the figure as in 2021, the bottled water market value in India amounted to over 221 billion Indian rupees and is projected to reach over 826 billion INR in 2030, growing at a compound annual growth rate of 14. 03 per cent between 2022 and 2030. India was the 12th largest consumer of bottled water by value and the 14th biggest by volume in 2021, according to a new United Nations report released during World Water Day. In the mineral water segment, the country reported the second fastest growth rate after South Korea during three years from 2018 to 2021, as per the same report. Against that, the global bottled water market size was estimated at USD 303.95 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5. 9% from 2023 to 2030.
When India was reeling under a severe water crisis bottled water and soft beverages were reaching and consumed even in remote villages. Bottled water consumption is also depleting groundwater levels, which is the primary source of packaged water. Mr Ramesh Chauhan, the man behind the most popular mineral water brand, Bisleri, has contributed to the growth of this industry. The distribution reach of Bisleri through the franchising route setting up franchised bottling plants all over India has really contributed to the significant growth of the bottled water industry, and Ramesh Chauhan’s signal contribution is well recognised.
Bisleri’s Growth and Market Impact
Two important factors were responsible for the phenomenal growth in the packaged drinking water industry. One is the safety and quality of water, which was always a question mark, and people started shifting to bottled water when they were outside their homes and having their own water purifier installed for their in-home consumption. Large-scale awareness of the people about waterborne diseases has made this possible, and consumers do not want to take risks with the water quality that they drink. In the beginning, Bisleri was seen to be consumed by a select few and was seen being used in events and conferences. Soon, it became essential for every occasion.
Purified Water holds the largest market share, driven by concerns about contaminated water. Sparkling Water is expected to grow fastest, driven by consumer preference for healthier alternatives. Treated water is the most popular bottled water market by volume, making up 47% of the total. This water is treated, disinfected and bottled for consumption. Developing countries, including India, dominate this category.
Mineral water comes next, with a 33% market share. The remaining 20% of bottled water is from other natural sources like natural spring water. In 2022, the still water segment held the largest market share of more than 74. 5% in terms of revenue and is expected to maintain dominance in the coming years as well. Drinking water scarcity in several regions further necessitates demand for safe drinking water, leading to increased product sales and augmenting the market growth. While the western part of India holds 40% of the market, bottling operations and manufacturing plants are more in Southern India.
Challenges and Opportunities in India’s Bottled Water Industry
Diseases such as dysentery, diarrhea, and typhoid are usually caused due to contamination in supply water. Consumers are looking for safe water options, and companies are addressing the same issues. For instance, Aquafina offers purified drinking water, which is claimed to be filtered and sodium-free. Bisleri dominates the market and is the market leader. The other leading bottled water brands in India are Bailleyof Parle Agro, Pepsi’s Aquafina and Coca-Cola’s Kinley.
However, the functional water segment is projected to register now a higher growth at a CAGR of 6. 9% from 2023 to 2030. The growing emphasis on health and wellness is a major driver for the market. Consumers are becoming increasingly conscious of their overall well-being and are actively seeking out functional beverages believing that would be good for them. As alcohol cause dehydration, many now take wine with water. The increasing preference for nutrient-fortified water is trending due to the rising importance of health and wellness among consumers. The demand has increased among travellers, working professionals, and in-house consumers.
Over the past few years, products with labels such as alkaline, electrolyte-rich, fortified, caffeinated water and oxygenated water have been gaining popularity. These brands of fortified water, including favoured drinking water, are increasingly gaining popularity. Bisleri, however, is not a player in this segment. Others, finding it difficult to crack and take away some market share from Bisleri, are resorting to be active in this segment. This segment is growing but still small and natural still water is growing at a higher rate and driving the growth of the category.
The leaders in natural waters are all from Europe, including Belgium, the Netherlands, the United Kingdom, and France. In Europe and the USA, running tap water itself is generally considered of good quality and safe to drink. Even in restaurants people take tap water as bottled water is very costly.
Bottled water consumption is popular in low- and middle-income countries because of a combination of factors, including unreliable and unsafe clean drinking water supplies, rising urbanisation, and limited water delivery infrastructure in cities.
The bottled water market in India faces two big challenges, including duplication of leading brands like Bisleri and quality and safety of water from the unorganised sector. If we take this into consideration size of the bottled water market is much larger than reported. The duplication is seen largely in 1-litre bottles. As groundwater, particularly in northern regions, is depleting, we need to look at newer sources of water, and as such, water management practices need to change to avert a severe water crisis in the coming years.
Future Prospects and Potential Ownership Changes for Bisleri
Ramesh Chauhan is now old, he has one daughter who does not seem to be keen to join the business. He finalised a deal with Tata Consumer Products Ltd to acquire Bisleri as an ongoing entity. The deal was announced also, but for some unknown reasons, the deal finally did not go through and got fizzled out. A new CEO was appointed to look after day-to-day operations, and Ramesh Chauhan’s daughter Jayanti Chauhan, who is now Vice Chairperson, gave a press statement that she will manage the business. Sooner or later, Bisleri will be taken over, which I was predicting for some time. And likely buyer could be the world’s largest player in the water business, Nestle, which controls about 20% of the global water business, but in India, they tried once and did not succeed. As water is a core business for Nestle, acquiring Bisleri would be a good entry strategy for them.
*The author is the chairman of Strategic Consulting Group and served as Professor and Head of the Department of Management Studies, IIT Delhi, India.
