Business Overview
Water is an indispensable element of human life, making it a logical choice for business. With the average person requiring 2-3 liters of water daily and India's population surpassing 1.36 billion and growing at over 1.1% annually, the business potential is immense and largely untapped.
Previously, bottled drinking water was a luxury reserved for the elite, foreign tourists, and health-conscious individuals. However, in recent years, there has been a surge in its popularity among the general population. Rising living standards, disposable incomes, education, and awareness have driven increased sales of bottled water among domestic and foreign tourists, as well as in sophisticated business establishments and offices.
The surging demand for bottled water reflects the scarcity of clean drinking water and concerns about tap water quality. It has become a symbol of a healthy lifestyle in India. The sale of pure and safe water has become one of the fastest-growing industries in the country, offering the triple benefits of convenient packaging, consistent quality, and widespread availability.
Market
In FY 2013, the packaged bottled water industry in India was valued at INR 60 billion. Value Notes estimates that by FY 2018, it will reach approximately INR 160 billion, growing at a remarkable CAGR of 22%. With such a vast market in India, we are focused on expanding our market presence, enhancing our brand value, and establishing production partnerships.
Current State
Our brand of Packaged Drinking Water was introduced in February 2015, and since then, we've made significant strides in establishing ourselves as a leading brand in Chhattisgarh. After a highly successful launch in Chhattisgarh, we expanded our operations to Vidarbha, Odisha, and Mahakaushal, swiftly becoming a renowned brand of Packaged Drinking Water in these regions. Currently, our brand boasts a monthly business volume of 15 lakh bottles of Packaged Drinking Water, with monthly consumer sales exceeding Rs 2.25 crore.
To meet this demand, we've formed partnerships with six manufacturing units to ensure a smooth supply chain. Additionally, we've cultivated a network of over 50 distributors in Chhattisgarh, Odisha, Vidarbha, and Mahakaushal to efficiently distribute our products. With a robust distributor network and effective fleet management, Xtreme Packaged Drinking Water has earned a reputation as a trusted brand. Our unwavering commitment is to deliver the highest quality products and ensure exceptional customer satisfaction. In a short time, we've firmly established our presence in Central India.
Competitive Landscape
Our competitors can be categorized into two groups: major brands like Bisleri, Bailey, Aquafina, and Kinley, and local brands that operate on a city or district level. To assess the competition, we consider the margins offered on our highest-selling variant, the 1-liter Bottled Water.
Major brands typically provide retailer margins ranging from 35-70%. Currently, our brand offers retailer margins between 100-125%. Our quality matches that of major brands, and our higher margins make us a preferred choice among retailers. Additionally, our product design and aesthetics are superior, making our brand more appealing to retailers.
Local brands have a presence in most towns and cities, with margins higher than ours. However, their business model involves supplying bottled water directly to retailers within their city limits, bypassing distributors or C&F agents. This allows them to offer high margins but limits their reach. Consumers often view them as local brands with less emphasis on quality and design. In contrast, our brand assures consumers of quality and offers attractive, well-designed products with competitive retail margins.
