Table of Contents
Introduction to the Industry
The packaged drinking water industry serves the basic need of a person to consume purified drinking water. This industry has significantly grown owing to water shortages around the world and the misuse of natural resources. In India, drinking water can be divided into three segments – premium natural mineral water, natural mineral water and packaged drinking water. There are 5,735 licensed bottlers for packaged drinking water across the country, alongside uncountable unbranded ones.
In India, bottled water is sold in different types of SKUs – 1L bottles, 2L bottles, 500 ml bottles, 250 ml bottles, pouches, and barrels of 15-20 liters. Among these, 1L bottles have acquired the largest market share of 42% (2018), followed by 500 ml bottles and 250 ml bottles. Current market trends in the industry show that the popularity of flavoured drinking water (with artificial essences) has increased and there is a shift towards institutional sales as a result of direct partnerships with airlines, restaurants, and movie theatres.
Introduction to the Companies
Bisleri International is an Indian bottled water brand formed by Jayantilal Chauhan and Felice Bisleri. Originally an Italian brand, Bisleri was acquired by Parle in 1969. Bisleri started off by selling packaged drinking water and soon diversified into other products like mango juice and spicy cola. Powered by 122 plants, 4500 distributors and 5000 distribution trucks across India, it stands true to its promise of providing safe and pure drinking water. Bisleri gained a lot of popularity recently with its ‘Bisleri Camel Meme Fiesta’ – Har Paani Ki Bottle Bisleri Nahin memes.
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Aquafina is an American brand producing purified bottled water products, owned by PepsiCo. Introduced in 1994, Aquafina manufactures flavored as well as unflavored water. In the United States of America, it is the largest seller of bottled water by retail sales. The flavored variations include Aquafina FlavorSplash, Aquafina Sparkling, Aquafina Alive, and Aquafina Plus. It poses a lot of threat to other brands like Bisleri and Dasani in terms of competition.
Purpose behind selecting Bisleri and Aquafina
Historically, Indians as a people preferred earthen pots and then moved to RO water purifiers, not keen on buying bottled water. Water contamination and typhoid outbreaks during the mid-1970s combined with liberalisation at the given time opened India up to bottled-water companies. Bisleri (part of the Parle Group) and Aquafina (part of PepsiCo) are private manufacturers who are presently market leaders in the Indian context since the Government failed in delivering clean drinking water. In 2023, the industry is estimated to reach ₹ 403 billion by leveraging a CAGR of 20.75% (pre-COVID-19 estimates). A steep rise in the disposable incomes of consumers in India coupled with the increased awareness of consuming clean drinking water has led to not just the need for companies that manufacture and supply packaged drinking water, but has also ensured a robust growth for them. Such an extensive distribution network demands research to understand how the companies thrive using professional marketing strategies.
STP Matrix of Bisleri and Aquafina
Segmentation
Bisleri caters to all people that seek hygienic drinking water. It has segmented the market into premium, popular and bulk. Primary focus lies on the masses and bulk category. According to geography, it sells in all major cities of India with a high degree of penetration. It caters to health conscious and travellers (psychographic) and families and corporates (demographic).
Aquafina focuses on the niche market of Grade A cities that have a higher population of middle and upper classes. It not only serves all those who seek hygienic drinking water, but also those who are specific about minerals and the ‘taste’ of their water. A 7-step purification process called HYDRO-7.
Targeting
It has unique bottling sizes to cater to an individual’s needs which are priced differently.
All age groups, families, travellers, and corporates are targeted with the multiple SKUs offered. Generally, the middle and upper classes tend to afford a bottle of Bisleri water.
It bases itself on the needs of a younger generation of men and women that are always on the go. It has durable product formats of a can that caters to those that are environmentally conscious and those that look for durability.
Positioning
“Purity” is the image Bisleri has always portrayed. It ensures a high quality product (based on rigorous testing) with an extremely low chance of tampering to ensure safety. It urges consumers to “play safe”.
Aquafina focuses more on the mineral content of the packaged drinking water and hence emphasizes on the ‘taste’ along with the safety and purity of water. It has positioned itself as a ‘cost effective and refreshing beverage”.
Analysis of Similarities and Differences
Aquafina and Bisleri have been rival companies in the industry for decades now. Both companies offer their products – primarily bottled water – in various sizes. Bisleri and Aquafina believe that the key to success lies in the ‘availability of the product’ and a compromise on the distribution channel is not acceptable. They both have formed very strong distribution strategies in order to gain market share. Aquafina and Bisleri faced a lot of criticism for the employment of plastic product packaging. To reduce the negative impact on the environment, Aquafina debuted a new bottle – Ecofina – that uses 50% less plastic and Bisleri launched a campaign named ‘bottles for change’ wherein plastic waste is converted into usable products.
Despite having similarities, the companies actually function very differently. Aquafina has greater worldwide presence in comparison to Bisleri. While Bisleri operates majorly in India and neighboring countries, Aquafina products are sold in the USA, Europe and Asia. Aquafina owns majority market share in the Indian markets, second to none other than Bisleri. It has been giving tough competition to Bisleri and other brands like Kinley for quite some time. As per the BCG Matrix (in the Indian markets), Aquafina is on the question mark quadrant – high growth rate and low market share. Bisleri lies on the star quadrant – high growth rate and high market share. The customer segments Bisleri caters to are need based customers and organizational customers. Aquafina caters to personal customers – generally the niche. While Bisleri has managed to supply products to the B and C grade towns in the country, Aquafina hasn’t been able to penetrate well. Bisleri follows a locational pricing strategy while Aquafina sticks to a competitive pricing model.
Suggestions and Learning Outcomes
Taking into account the current state where the world battles its way through a pandemic, the need for clean drinking water is greater than ever. Both companies have the opportunity to boost manufacturing levels since the coronavirus has not been detected in drinking water supplies. Bisleri, which has remained the market leader, has started a consumer delivery system (where water can be ordered from the website itself) in order to cater to the demand spikes during the lockdown period. As established previously, Aquafina faces penetration issues yet again as it lags behind with no special steps taken to cater to its consumer base. Trying times like these demand for initiatives taken to help the masses, and Bisleri manages to do that and more, making it clear why it has remained the market leader in the last decade.
