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Bisleri and Aquafina

INTRODUCTION

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. Now around 100 companies sell an estimated 424 million liters of bottled water valued at around Rs. 200 crores in the country annually. 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.

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 The concept of bottled has been quite prevalent in western countries due to greater health consciousness and higher awareness about health and hygiene countries are exported every year.

In India, with exposure of media and international life styles, deteriorating levels of potable water, drastic increase in a number of water borne disease cases, increased 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 milk it. In 1967 Bisleri set up a bottling plant for manufacturing and marketing its mineral water but failed.

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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.

PESTLE ANALYSIS OF THE INDIAN BOTTLED WATER DRINKING INDUSTRY

Political

  • There are various political parties protesting against the pricing of mineral water. * There is stable government at the centre with liberal policies.
  • The government has imposed price ceiling on bottled water.

Economical

  • Increase in per capita income.
  • Expansion of multinationals, IT and BPO companies in Tier 1 and 2 cities.
  • There is no licensing policy adopted in this sector.
  • Availability of affordable labor.

Social

  • Bottled water was earlier considered as a status symbol.
  • Bottled water is now the only source of pure drinking water in areas where there is scarcity of water.
  • The bottled water is considered to be safe as compared to ordinary tap water.
  • There in increase in health consciousness of people.

Technological

  •  The bundling of technologies like distillation, reverse osmosis, activated carbon filter, etc helps in better quality of water.
  • There has been a shift in packaging from bottles made of glass to bottles made of PET. This helps in recycling and reducing environmental pollution.

Legal

  • Governed by PFA and BIS standard.
  • BIS has provided standards for mineral and drinking water. The BIS approval was made mandatory from 1999.
  • Mineral water should be packed in clean, colorless, transparent, odorless, tamper proof bottles made up of polyethylene.
  • PFA and BIS lays standard for metals like lead, mercury, arsenic, aluminum and barium.

Environmental

  • The use of Plastic for bottled water increases environmental pollution.
  • The increase in consumption of bottled water causes depletion of valuable fossil fuels.

INDUSTRY ANALYSIS (PORTER’S FIVE FORCE MODEL)

Determinants of entry

As the Packed bottled water is growing at the rate of 19% in India and is expected to grow from 8000 crores to 10000 crores by 2013 it is the most lucrative and fastest growing sector currently. The market capitalization is 50-50 i.e. 50% by organised players and 50% by unorganised players. There are more than 200 players in the segment:

  1. High demand sector.
  2. Unorganised labour requirement.
  3. Absolute Cost Advantage.
  4. Low switching cost.
  5.  Recession proof industry.

Determinants of rivalry

The rivalry is not only among the top and the organised players in the sector but also among the unorganised players who are weak in brand identity. The major reasons are

  • Distribution channels
  • Retailer’s shelf space
  •  Price
  • Flexible packaging of the water to suite the purchasing power of the consumer.

Bargaining power of buyers

The bargaining power of the buyers is very high in the B2C and the B2B segment because of the number of players present in the market.

Bargaining power of suppliers-

The bargaining power of the supplier of the raw materials to the industry is very high because of lack of substitute of the raw material. Also since the demand of the end product is very high and the industry is growing the suppliers can demand a premium for the services rendered.

Substitution threat

Though theoretically speaking there is no substitute for water but then we can say the following can be considered as a substitute for it

  • Aerated drinks.
  • Juices

BISLERI

Brand Tagline: “Play Safe”

Mission Statement: “To provide the highest quality product, keeping in mind all aspect including freshness, purity and safety and making it easily available to the consumer at very affordable price.”

Company Background

Parle Bisleri Ltd is the biggest domestic player in soft drinks in India. It is a private company owned by Ramesh Chauhan. The company sold off the Thumps Up and Gold Spot brands to Coca-Cola India in the early 1990s. Since then, the company has focused solely on bottled water in India. Due to the vast number of players present in bottled water in India, Parle Bisleri has tried to differentiate its brands from the competition. The company shifted its slogan from “Pure and Safe” to “Play Safe”, following the attempt of many regional players to emulate the look of the company’s brands. Parle Bisleri is credited with revolutionizing bulk bottled water in India through the introduction of innovative 20-litre jar packaging. The company developed consumer-friendly packaging for its 20-litre jars by adding threaded fittings and valve caps, as opposed to other brands that feature snap-on fittings. These innovations facilitated easier draining of water from the jar.

History

The origin of BISLERI lies in Italy and the brand owes its name to its founder MR.FELICE BISLERI, an Italian entrepreneur. In 1967, BISLERI set up a plant in Bombay for bottling and marketing actual mineral water, which did not quite work. By 1969, BISLERI wanted to exit the business and to help him out the Chauhan’s bought the brand, intending to turn it into a soda brand. Since then it has come a long way. Now, it owns a large percentage of shares in the Indian market and also it has its presence in International Water Market.

Products

Bisleri offers a wide gamut of pack and price options. It offers 7 packaging options; a 250-ml cup and bottles in 500 ml, 1-litre, 2-litre, 5-litre, 12-litre and 20-litre packs. The 1-litre bottle accounts for nearly 50 per cent of the sales, with the 2-litre bottle taking up 20 per cent of the sales. The remaining sizes share the balance.

Production

  • Parle Bisleri Ltd operates a network of 55 plants spread across the country. This ensures an extensive reach for the company’s products. The company reportedly has plans to increase production capacity further in 2008.
  • Parle Bisleri’s latest product, Bisleri Mountain Water, is bottled in two plants in Uttarakhand (formerly Uttaranchal) and Himachal Pradesh. The company plans to invest Rs100 million to increase the new brand’s manufacturing and distribution capacity.

Cite this page

Bisleri and Aquafina. (2017, Jan 20). Retrieved from http://studymoose.com/bisleri-and-aquafina-essay

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