FMCG majors eyeing mineral water - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

FMCG majors eyeing mineral water

Jun 16, 2000

The mineral water market in India is burgeoning with the entry of MNC players. A number of global entrants are expected to shortly flood the branded water market. What is vital for success is a brand name and the ability to distribute it extensively and in a cost effective manner. The FMCG companies score well on these fronts. The size of the Indian mineral water market is estimated to be Rs 11 bn, of which branded water accounts for Rs 7 bn. The industry is growing at a phenomenal rate of 35-40% annually. This compares well with the near stagnant growth in other FMCG businesses such as detergents and soaps. As the awareness of people towards health and hygiene is increasing, people are willing to pay for drinking safe water. So there exists a huge untapped potential in the mineral water market. Parle’s ‘Bisleri’ is the leader in the market and the name is quite synonymous with the mineral water. The other leading players are Bailey, Yes and Hello.

Looking at the growth potential of the industry, FMCG majors are planning a foray into the branded water market, which is a high margin business. Many MNC FMCG companies have the strong support of their parent in this segment.

  • Britannia Industries Ltd. (BIL), the biscuit major is mulling an entry into the bottled water market with the support of its parent Group Danone. According to market sources, BIL’s mineral water will most probably be sold under the brand 'Britannia Pure Health'. Group Danone is a global leader in this segment with its renowned brand Evian. The company will be able to access its parent technology in introducing the mineral water brand in India.
  • Nestle India, the food major, is planning to enter the market with its brand Pure Life by the end of the current year. The company has a strong backing from its international parent, which has brands such as ‘Perrier’ and ‘Vittel’.
  • After Britannia and Nestle, HLL also seems to be thirsty for mineral water. The fast growing mineral water market has been identified as one of the nine growth engines of HLL’s Project Millennium. HLL with its huge cash generating ability might acquire the leading brand from the market instead of setting up a new plant.
  • Pepsi is all set to expand its bottled water business with plans of setting up 3 new bottling plants for its ‘Aqua Fina’ bottled water brand. The company test-launched its brand last year in cities of Mumbai. It targets a market share to 25% by end of next year in areas where it is present.

What favours growth in the branded-water segment is the country's changing demographics. The people are becoming health conscious and instead of having cola drinks they prefer branded water or fruit juices. The leader in the market would be the company, which has vast distribution and logistics network. The FMCG companies are best placed in this criterion and are expected to do well given their existing distribution network.


Equitymaster requests your view! Post a comment on "FMCG majors eyeing mineral water". Click here!

  

More Views on News

KRBL Share Price Up by 11%; BSE 500 Index Up 2.4% (Market Updates)

Sep 25, 2020 | Updated on Sep 25, 2020

KRBL share price is trading up by 11% and its current market price is Rs 281. The BSE 500 is up by 2.4%. The top gainers in the BSE 500 Index are KRBL (up 10.6%) and IFB INDUSTRIES LTD (up 13.2%). The top losers are SUNDRAM FASTENERS (down 0.1%) and BAJAJ HOLDINGS & INVESTMENT (down 0.1%).

NESTLE Announces Quarterly Results (1QFY21); Net Profit Up 11.1% (Quarterly Result Update)

Sep 23, 2020 | Updated on Sep 23, 2020

For the quarter ended June 2020, NESTLE has posted a net profit of Rs 5 bn (up 11.1% YoY). Sales on the other hand came in at Rs 31 bn (up 1.7% YoY). Read on for a complete analysis of NESTLE's quarterly results.

VENKYS (I) LIMITED Announces Quarterly Results (1QFY21); Net Profit Down 24.0% (Quarterly Result Update)

Sep 15, 2020 | Updated on Sep 15, 2020

For the quarter ended June 2020, VENKYS (I) LIMITED has posted a net profit of Rs 470 m (down 24.0% YoY). Sales on the other hand came in at Rs 5 bn (down 40.2% YoY). Read on for a complete analysis of VENKYS (I) LIMITED's quarterly results.

BRITANNIA 2019-20 Annual Report Analysis (Annual Result Update)

Aug 6, 2020 | Updated on Aug 6, 2020

Here's an analysis of the annual report of BRITANNIA for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of BRITANNIA. Also includes updates on the valuation of BRITANNIA.

BRITANNIA 2018-19 Annual Report Analysis (Annual Result Update)

Sep 16, 2019 | Updated on Sep 16, 2019

Here's an analysis of the annual report of BRITANNIA for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of BRITANNIA. Also includes updates on the valuation of BRITANNIA.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

How Much Money Do You Need to Be a Professional Trader? (Fast Profits Daily)

Sep 17, 2020

In this video I'll answer a question I get asked often: How much capital do I really need to trade the markets for a living? Let's find out...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

COMPARE COMPANY

MARKET STATS