Bisleri seems to have had enough of clichéd images of mountains and springs. In its latest television commercial, the mineral water brand has used humour (“save yourself from a monster by offering him Bisleri”) to drive home the brand message: stay protected with Bisleri water.
Bisleri is spending Rs 50 crore for the latest brand campaign. Though some are critical, (Ignite Mudra Head Sudarshan Banerjee says the premise of the campaign is a little far-fetched), others say the humour works well.
However, in the branded bottled water space, getting the communication right is like skimming the surface. The larger task at hand is managing distribution.
In a segment where margins are wafer-thin, driving volumes is critical. However, for Bisleri, reaching out to consumers is difficult as distribution costs are high. In view of the bottles being bulky, and the product price low, the per unit cost of transportation is quite high. This is where regional bottlers, with their manufacturing base within a radius of 100 km eat into Bisleri’s share.
But Bisleri has managed to get something right. Even today, Bisleri continues to be the leader by a long margin in a market where beverage behemoths Coca-Cola (with Kinley) and Pepsi (with Aquafina) have been flexing their muscles. In the branded Rs 3000 crore bottled water segment, Bisleri has a dominant market share of close to 40 per cent. Compare this with Kinley which holds nearly 10 per cent or Aquafina which has close to 15 per cent.
To cement its position, Bisleri has invested in a geographically diverse manufacturing model. From a footprint of 22 plants five years ago, the number has grown to 52. “A wider network has helped reduce logistics cost, thus allowing us to make deeper market penetration,” says Anjana Ghosh, Bisleri’s director (business development and human resource). Bisleri water currently reaches 150,000 outlets within the country.
Bisleri also scores over its rivals in its direct distribution model, where bulk packages are delivered at the doorstep. As an analyst at a leading brokerage firm, who has worked with Bisleri, says, “It is the first mover advantage in the direct selling channel that has helped Bisleri maintain its edge.” Direct sales, which bring in 50 per cent of the business, will continue to be the growth driver, while the retail and HoReCa (hotel, restaurant, cafe) segment will play second fiddle.
Ghosh says a reason for success in the direct channel has been timely service. As is well known, bottled water distribution requires a daily distribution model. The company has a fleet of 2,500 vans that operate out of warehouses. “Homes and offices can set their watch coinciding with the arrival of the Bisleri van,” says a confident Ghosh. And it is the ‘efficiency’ of the field force of 2,500 people and a 500-600 strong management team driving the back-end that ensures this punctuality.
Within the direct channel, Bisleri’s focus this year is to go after the home consumption market. For this, Ghosh is looking to place vans in certain localities where consumers can call and order water packs. “We have some vans in Mumbai, but we want to scale up the business and take this concept to housing societies,” explains Ghosh. Currently the vans service consumers during the day, but the company is sorting out the logistics to introduce a night service. After Mumbai, Bisleri plans to take this model to Delhi.
Earlier this year, the company launched Bisleri hubs to drive home consumption. These are local stationery shops and dairies which exclusively sell Bisleri water, while support in terms of delivery vehicles like tricycles are provided by the company. There are 120 such hubs in Mumbai.
The company also wants to expand the ‘exclusive’ ‘Bisleri Shoppes’, 20 of which are already in Bangalore. “We want 100 outlets by end of the year,” says Ghosh. Exclusive stores will help overcome the issue of ‘undercutting of margins’ common in general trade, and also allow the company to experiment with new products like Bisleri ice cubes.
KPMG analyst (consumer) Anand Ramanathan though questions the viability of exclusive stores and believes it might be difficult to get enough footfalls. “It might be wise to extend to services like a juice bar which revolves around the quenching thirst proposition.”
Coming up with the right stock keeping units has also played a part in Bisleri’s success. Today, Bisleri has the largest portfolio of bottle sizes (seven) starting from 250 ml and going up to 20-litre. “We want to sell convenience,” says Ghosh. Each size serves a different purpose, whether it is the 250ml pack for consumption on-the-go or the 2-litre pack while travelling.
So does the increasing action in the water purifier market worry Bisleri? “Every water purifier manufacturer is claiming they are better than competition, creating a doubt in the consumer’s mind. Thus, we are benefiting from that,” quips Ghosh.
The company will soon launch a 15 litre pack for the in-home consumption market. “The 20 litre pack was too bulky for the retailer to make home delivery,” says Ramesh Chauhan, chairman, Bisleri. Chauhan pays careful attention to packaging. The new 15 litre pack will have a rocking base allowing consumers to easily tilt the heavy bottle while pouring water. This is an insight Chauhan picked up from a Belgian water brand Spa Reine’s packaging.
Chauhan, the man who created brands like Thums Up, Gold Spot and Limca, before selling them to
Coca-Cola, candidly says, “I am not an original thinker, but like to learn from others.” And this certainly appears true when you see the collection of different international water brands that line Chauhan’s office shelf.