Tata Global Beverages, PepsiCo join hands for bottled water business

The bottled water market in India is set to boil over with the marriage of heavyweights PepsiCo India and Tata Global Beverages yielding a new product - Tata Water Plus.

The firms are eyeing a big chunk of the market pie and are targeting a turnover of Rs 700 crore over the next five years.

At present, the size of the bottled water business stands at Rs 1,000 crore, out of which large brands accounts for Rs 340 crore of the market. According to the industry, the market is growing at a robust 35-40 per cent - a rate which is drawing many multinationals to taste the waters.

Currently, companies such as Bisleri, Coca-Cola's Kinley, PepsiCo's Aquafina and Himalayan are already engaged in a tussle to grab a larger share.

PepsiCo and Tata Global Beverages formed a joint venture NourishCo in 2010 to cater for the growing bottled water business in India.

"We expect that by 2016, the JV's turnover would touch Rs 700 crore with our product portfolio, which will be enhanced by then," Tata Global Beverages Vice-chairman R.K. Krishna Kumar said.

The company also has plans to expand the portfolio with glucose-based and lemon-based non-aerated drinks over the next 18-24 months.

The new bottled water, to be priced at Rs 16 for a 750 ml bottle, will be rolled out in Tamil Nadu first - covering 20 towns such as Coimbatore, Salem and Madurai, among others. Eventually, the product would hit other states as well.

NourishCo, which has outsourced the production of the new product to a company in Chennai, will follow the same process all over the country.

"We plan to cover the entire country, including far-flung areas in next three years," Kumar said. On the branding of future products, Kumar said that there were "no hard and fast rules" and the JV would not follow any set pattern.

While Tata Gluco Plus is the first product developed by the JV, Nourish Co had entered into a brand licensing and a manufacturing agreement with the Tatas for marketing the latter's Himalayan brand of mineral water.

Courtesy: Mail Today