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Natural Mineral Water - Raising the Bar

Monday, September 9, 2019, 15:58 Hrs  [IST]

The packaged water market in India is quite clogged with innumerable brands with varied market positioning. Although the consumer awareness about the positioning of different brands and their standards are still low, growing health consciousness in the consumer market is certainly driving demand for niche category of packaged water products. Most of these niche brands target hotels and high-end restaurants which cater to high-end customers. Hospitality Biz tries to understand the niche natural mineral water market in India and their focus on hospitality customers.

Packaged water is the most accessible consumer product in India with every street-side shop selling it like hot cakes. The general perception about poor potability quotient of pipe water in the country has triggered a spike in demand for packaged water in the country from the last decades of the 20th century. The business opportunity in this burgeoning category made all kinds of investors to flock into it virtually clogging the category and in some markets the category known in the name of a brand itself.

Although consumer awareness about the category has improved over a period of time, the fine line among purified bottled water, mineral water, and natural mineral water, etc. is still blurred. There has little effort even on the part of the industry to create consumer awareness to enable consumers distinguish products based on the procurement, processes, procedures, quality standards, etc.

As a regulator of standards, Bureau of Indian Standards recognises two varieties of branded drinking water - natural mineral water and packaged drinking water. BIS has published two Indian Standards for Packaged Drinking Water namely IS 13428 for Packaged Natural Mineral Water and IS 14543 for Packaged Drinking Water (Other Than Packaged Natural Mineral Water).

While mass-market packaged mineral water market is dominated by brands like Bislery, Kinley, Aquafina among others, the premium natural mineral market is a relatively new and picking up market share quite significantly alongside the growing consumer awareness in the market. Although having a low base in the market, the market growth is comparatively higher for the premium natural mineral water compared to the distilled or mineral water category.

Confirming the market growth, Behram Mehta, Managing Director, Aava Natural Mineral Water, (Sheelpe Enterprises Pvt. Ltd.), says, “India is a growing market for bottled water which was at one time growing at 30% a year for the premium natural mineral water segment due to its wellness and health benefits, while the purified packaged drinking RO water segment was growing at about 25%.”

A near-certain estimate on the size of the water market in India is impossible because of the presence of the huge unorganised sector not registered with BIS- Bureau of Indian Standards, says Ganesh Iyer, Director - Operations India & Indian Subcontinent, Veen, a premium natural mineral water brand. But going by the organised sector, the bottled water market could be in the region of INR 160 Bn and is expected to reach INR 403.06 Bn by the end of 2023, expanding at a compound annual growth rate (CAGR) of 20.75% from 2018.

According to a recent research by IKON Marketing Consultants, Indian Natural Mineral Water market was worth INR 187 Crore during 2009 -10 and growing at CAGR of 21%, which will cross INR 10 billion marks in the current decade.

Tapping the Hospitality market
While retail consumer market is the mainstay of the mass market mineral water brands, the natural mineral water brands largely target and thrive on the back of institutional customers like hotels and hi-end restaurant brands. According to certain estimates, 90% of the sales of premium package water category is institutional B2B customers.

Confirms Aditya Deshpande, Founder Director, Kelzai, another high-end Indian natural mineral water brand. “We are the brand standard for a lot of five-star hotels. We have partnered with the Marriott Group, and Speciality Restaurants Limited since our inception, and we also have presence across airports. We are also hoping to be present in the retail segment in the near future. The sales strategy is currently purely B2B and institutional. High-end schools and high-end hospitals will be our next target. Currently, our top four segments in India would be hotels, restaurants, airports, and institutions.”

The guests in a luxury hotel or a high-end fine diner is sophisticated enough and informed about the benefits of natural mineral water over the regular packaged water, and therefore they are the natural customer base for premium natural mineral water. “As HoReCa realises the benefits of premium natural mineral water and its natural alkalinity, their perspective is slowly but surely shifting – instead of looking at water as a commodity people are now viewing it as an essential for good health. When the experience is clubbed with fine dining it is impacting the interest of consumers towards Fine water or Table water. It is a slow progression but is happening,” informs Mehta.

Aava is a premium natural mineral water brand and is also India’s highest-selling natural mineral water, with over 3 lac bottles being sold every day.
“For the well-heeled Indian travellers’ globalisation in its wake has made access easier for anything and everything to land on your table and that includes some of the varied natural mineral waters brands despite water being ubiquitous. Therefore, now terms like PH, TDS, virginality, flavour origin are no longer buzz words and the discerning consumer is well informed about these while he /she makes decision with regard to the water that’s going to be served on the culinary table. Awareness amongst consumers on the difference between bottled water and natural mineral water is therefore on the rise. Parallel to this with the emergence of fine waters as a category in itself the eco-system around non-alcoholic beverages and more so with water has gained prominence and traction,” says Iyer.

Veen has been the first natural mineral water brand to enter the Indian market with a premium glass packaging way back in 2012-13 and today has a footprint in over 40 cities across India in almost 400 plus hotels and restaurants and similar base for HNI on a Pan India basis.

Focus on Sustainability
It’s a time when the world is combating the menace of plastic in a big way with target set for reducing the usage of single use plastic for every country, industry, etc. Lot of hotels and restaurants have joined the global action plan against plastic by banning or reducing the use of single use plastic from their operations. Packaged drinking water companies largely use plastic pet bottles. And, the amount of plastic gets generated in a hotel, especially where large conference and banqueting facilities are there, is huge. There is a need for greater engagement between the stakeholders of the hospitality industry to look for alternatives to reduce the generation of plastic.

There are, of course, hotels which provide water in glass bottles for consumption in guest rooms, as well as, conference facilities. But, the use of plastic bottles is still prevalent.

The natural mineral water companies are much ahead of the curve when it comes to sustainability, including usage of environment-friendly packing materials. “We are the only company in India which packs water in environment-friendly 100% biodegradable bottles. We import the biodegradable additive for the preform used to make bottles, from the USA. We have tested the bottles at IIP (Indian Institute of Packaging), which showed that in 6 months’ time, the degradation level of the bottle was 86%, which means that within 2-3 years, the bottle is fully degraded and is part of the soil. We have also just started providing water in sustainable glass bottles and have been getting a very good response,” Mit Karia, Founder Director, Kelzai, said spelling out their commitment to sustainability.

“Sustainability is integral to Aava’s DNA,” states Mehta. “We only use 100% recyclable PET plastic containers. Over the years, we have set up several recycling kiosks in major metro cities and even have a buy-back policy in place to fulfill our producer’s responsibility. We adhere to International Environmental Quality Standards to ensure all our practices are eco-friendly. Not a single drop of water is ever rejected or wasted.” Aava, he said, will be launching glass bottle range soon.

Veen is the first imported natural mineral water brand to enter India in a premium glass packaging and thereby has the first-mover advantage, asserts Iyer. “I can say with conviction that there isn’t a better-looking bottle packaging in the natural mineral water business today in India.”

Cost Factor

Natural mineral water is expensive as compared to normal mineral water because it is sourced from natural resources. Even within natural mineral water, there are exclusive categories like Sparkling Mineral Water, Volcanic Water, Valley Spring Water, Bubbly Sparkling Water, Alkaline Water, etc., and in some cases the cost of a bottle of such exclusive packaged water can be equivalent to that of a high end alcohol.

Mehta attributes it to the rules and regulations that govern such exclusive products. “Since we can only bottle near our source, this means transportation costs are much higher for us vs packaged water brands who can source and bottle their water from anywhere.”

Evolving from a commodity to a Product
Hi-end hotels and restaurants which get a lot of foreign guests do not take risk when it comes to water; they use and serve to guests. They make sure they engage the right vendor for the right brand of water. In that sense, water has evolved from a sheer commodity to a product category in hotels and restaurants.

“Guests travelling to India are generally vigilant about drinking water. So, we keep ourselves ready for any kind of water requirement for them from Spring water to Sparkling water and Mineral water. There are numerous bottled water companies that compete in the market and it becomes a tedious process to decide which is the best option that could be made available to the guests. Some companies make distinguished claims on their bottles about the source of their water and filtration process. We are very particular in choosing the right brand which is synonymous with quality, brand value and is a market leader like us,” says Anurag Mathur, Rooms Division Manager, DoubleTree Suites by Hilton, Bangalore.

Water could be served and consumed in many ways. While some prefer packed drinking water, some go for water that has mint, cucumber or lemon in it that act as detox agents and come with health benefits, says Sathya Narayanan Rao, Assistant Manager – Food and Beverage, Four Points by Sheraton Mahabalipuram Resort & Convention Center. “Being in the hospitality industry, we would like to serve as per their preference but in recent days it’s been observed guest prefer packaged drinking water.”

The hospitality industry is also aware about the environmental hazards that single-use plastic including the pet bottles can create. “At DoubleTree Suites by Hilton Bangalore, we have entered into a partnership with a leading brand to ensure environment-friendly water is made available to our guests. We have also taken a step forward
by reducing plastic that normally comes with the bottled water. We have chosen to responsibly replace individual plastic water bottles in our rooms and suites with environment-friendly bulk packaged bottles. This water is absolutely safe to drink and duly certified by the authorities. We have also replaced plastic bottles in meeting and boardrooms/ restaurants with glass bottles,” informs Mathur.

Explaining the policies in place in this context, Somrup Chanda, Director of Food and Beverage, Indore Marriott Hotel said, “At Indore Marriott Hotel, we partner with brands that are committed to sustainability and one of the most important aspects of this is environment-friendly packaging where we make sure that a 100% reusable plastic is utilised. As an internal hotel policy, we also follow stringent plastic disposal measures using a simple method that involves effective waste segregation.”

However, condemning plastic in its entirety as an environment-hazard is also questioned by many. There are 100% recyclable plastic which is still relevant. “I believe once the stringent Extended Producer Responsibility (EPR) law takes hold, PET recyclability will be recognised and respected as PET can be further recycled into fabric, clothes, and is even great for road building,” says Mehta. On the other hand, the kind of energy required to manufacture glass, wastage involved in cleaning, transporting of glass increases carbon footprint to a large extent,he observed. “Some claim to use biodegradable plastic but this is a huge misconception as Polylactic Acid (PLA), the most common type of bioplastic used is compostable but not biodegradable. Under normal conditions, microbes break down just as slowly as conventional plastics. PLA is an acid, it will raise the acidity of its surroundings as it composts, and requires a temperature over 60 degrees to decompose making it difficult to recycle.”

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