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“In pricing, we are at a premium of 35-38%”
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Monday, 29 July, 2019, 08 : 00 AM [IST]
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Veen is a sparkling mineral water brand from Finland which was launched in 2006. The company sources the water from multiple unique spring sources where it produces distinctive bottled water products of individual characteristics in recyclable glass packaging. The Arctic Wilderness of Finnish Lapland is the brand’s origin and the home of its first spring source. In 2014, the company discovered the second source of its natural mineral water spring in the Himalayan Kingdom of Bhutan. Currently, the brand is available in 17 countries across Europe, the Middle-East and Asia including India and China. Ganesh Iyer, national sales director, Indian Subcontinent, Veen Waters, in an email interaction with Nandita Vijay shares the company’s India plans, growth and more. Excerpts:
Could you detail on your brand in India and how has it fared so far in the country?
Veen Natural Mineral Water and Sparkling Water which is bottled at source from the Himalayan Kingdom of Bhutan was launched in India in 2013 as one of the first natural mineral water brands in a clear glass bottle dedicated exclusively to the cause of hoteliers and restaurateurs. Being an exclusive hotel and restaurant brand, we did not retail. But we have successfully established partnerships with most of the leading hotels and restaurants in India over the past six years and in doing so have had our footprint in 35-37 cities on a pan-India basis till date and expect the same to reach 58-60 odd cities by 2020.
What are the key strengths of this brand? Where is the water sourced from and also provide us details on the manufacturing in India?
The brand is of Finnish origin and thereby its iconic design is the main strength. Other than this we were the first water brand to launch a natural mineral water in a clear glass bottle in India way back in 2013, and it is bottled at source at the world’s first and only carbon negative country which is the Himalayan Kingdom of Bhutan. The water is sourced at a place called Samste, in the Himalayan Kingdom of Bhutan. The bottle is manufactured in Bhutan and is sold only in B2B for the present.
What is the marketing strategy of the company and how it is positioning itself on the retail shelves in the wake of stiff competition?
Our primary marketing strategy is to take the education and awareness route within the hotel and restaurant space and train the associates, restaurant managers and F&B managers on the importance and significance of natural mineral water preferably in a glass bottle in the culinary environment not just from experience point of view but also from a revenue perspective. From a revenue perspective, as a premium water brand in India we are growing annually at a CAGR of 40-43% year on year and in terms of pricing we are at a premium of 35-38% over natural mineral water in PET bottles.
Apart from this, our main focus is to give the hospitality industry in India a solution to having access to a unique natural mineral water in premium recyclable glass packaging. We believe that the choice of water plays a crucial role in the overall dining experience and must be appropriate for the environment. We want to help hospitality industry with new solutions to recycling and responsible waste management. One of the projects we are currently working on is to provide our hotel customers with an on-site ‘glass to sand’ crusher, which reduces the glass waste by 90 per cent and ensures that the recycling is done onsite itself rather than being left to someone else to do. One of the big challenges we are facing is that although so many products are marketed as “recyclable” but only about 7-8 per cent of recyclable products actually do get recycled.
What is the pricing of this product and which are the markets that are proving to be profitable?
We have four varietals and the pricing is as under: The pricing for the same will differ from 3 star to 5 star and from outlet to outlet. Natural mineral water in 660ml is priced between Rs 175 and Rs 225. A 330ml costs from Rs 100 to Rs 125. A sparkling mineral water of 660ml is around Rs 350-400 and in 330ml it is between Rs 250 and Rs 275.
Bottled water business is a long-term approach, in terms of profitability we see the horizon only by 2021 onwards this is because water as an industry has a long gestation period and it takes actually close to 8-10 years to have some semblance of profit so in that sense we see the brand to make that around 2021-2022.
Would you be looking at addition of flavours in your water brand?
We have plans to launch Ayurveda Water and Mixers which is tonic water and gingerale in the last quarter of this financial year.
How would you describe the current scene for packaged water in India and globally?
Bottled water or packaged water is the fastest growing category globally. One of the challenges in the Indian context is to provide a near certain estimate on the size of the water markets because there is a huge unorganised sector and not registered with BIS (Bureau of Indian Standards) which accounts for a sizeable chunk of the business. But going by the organised sector the bottled water market could be in the region of Rs 160 billion and is expected to reach Rs 403.06 billion by the end of 2023, expanding at a compound annual growth rate (CAGR) of 20.75% from 2018. Based on volume, the market is likely to reach 35.53 billion litre by 2023, expanding at a CAGR of 18.25% from 2018 to 2023.
What are the visible trends in this space?
One of the encouraging trends is that the consumer today is more aware than what he/she was a decade back. Consumers today know the importance of a natural mineral water in a culinary environment and therefore terms like pH level, TDS (Totally Dissolved Solids), virginality, vintage etc. in the field of water are no longer alien to them and they are ready to pay a premium for a natural mineral water in a glass bottle.
What are the challenges in this space for companies like yours to grow and succeed?
Challenges are more to do with the mindset and as mentioned earlier the right way to grow the category and the brand is to keep educating and creating awareness amongst the hotelier fraternity.
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