project on bottle water industry.docx

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A STUDY ON MINERAL WATER BOTTLES _________________________________________________________ ____________ PROJECT REPORT ON Study of BOTTLED DRINKING WATER INDUSTRYPrepared by SHRISTI BADRINATH TIWARI Student of B.M.S. (Bachelor of management studies) 2010-2011 SUBMITTED TO UNIVERSITY OF MUMBAI & R.E.Societys’ Gogate Jogalekar College, Ratnagiri Page 1

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Page 1: Project On Bottle Water Industry.docx

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

R.E.Societys’ Gogate Jogalekar College, Ratnagiri Page 1

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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

R.E.Societys’ Gogate Jogalekar College, Ratnagiri Page 3

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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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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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R.E.Societys’ Gogate Jogalekar College, Ratnagiri Page 21

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

R.E.Societys’ Gogate Jogalekar College, Ratnagiri Page 23

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

A STUDY ON MINERAL WATER BOTTLES_____________________________________________________________________

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

R.E.Societys’ Gogate Jogalekar College, Ratnagiri Page 31

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

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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

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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

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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

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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

R.E.Societys’ Gogate Jogalekar College, Ratnagiri Page 53

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

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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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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

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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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