'Our aim is to offer a better mineral water experience'

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Tata Tea, the Rs 4,392-crore beverage company of the Tata group, is serious about its new initiative—water. The foray is being led by subsidiary Mount Everest Mineral Water Limited (MEMW). Mount Everest’s only product Himalayan has been relaunched in Mumbai and more is in the pipeline, according to its managing director and chief executive officer Pradeep Poddar. The company is not ruling out the possibility of acquisitions in its drive to scale up quickly. Despite an earlier shaky start with Glaceau, the US energy drinks maker, where Tata Tea had acquired a 30% stake only to sell it off last year to Coca-Cola for $1.02 billion, the group is pulling out all stops to capture consumer’s mindspace with Himalayan. In an interview with Viveat Susan Pinto, Poddar outlines what Mount Everest is doing with Himalayan. Excerpts:

What was the motive behind the makeover of Himalayan?

It is a holistic makeover that endeavours to create a leader in the natural mineral water category in a format that is aspirational. We took six months to relaunch the product. A lot of hard work went into it. A new bottle shape was designed. We came up with coloured caps. We came up with the right moulds, etc. But one thing that we didn’t change is the price of the product.

If this was the physical side of the relaunch, the softer side was not ignored. What is the story of the brand, how do we capture it in different ways, what labels can be used, et al? We came up with five labels that depict the flora of its origin. I am talking about the region (foothills of the Shivalik Mountains in the Himalayas) from where the water is derived. We have a perennial source of water there by virtue of our investment in the Mount Everest as we acquired it along with the brand Himalayan last year. The water from the source seeps down the entails of the Himalayas at the foothills of the Shivalik Mountains with a recharge of more than a billion litres a year. It is pristine in nature since it’s protected from contamination by multiple layers of clay. So what we are talking about here is not any water, but natural mineral water in the truest sense of the word.

Is the price of the product not on the higher side since the competition is substantially lower priced?

See, this is not any water, but natural mineral water. The bottled water business in India is skewed towards the packaged water segment, which makes up 90% of the category. Natural mineral water does not exist in a substantive way in the country. So does functional, flavoured and enhanced water. The bottled water business is worth Rs 1,600 crore and has been growing at 25% year-on-year for the last decade. That’s a high rate of growth if you ask me. Not many product categories are growing at that rate in the country. But it has been skewed towards products that play on the aspect of safety and security.

The leader Bisleri, for instance, has a market share of 16%, followed by Kinley and Aquafina at 14%. The balance 60% of the market consists of myriad regional brands, which straddle different price points. Our product, however, endeavours to upgrade the consumer to a preferred choice of water. It is not only about safety and security, but a better mineral water experience, about health and wellness if you ask me.

Who do you view as competition then?

Evian is a competitor. But it has outpriced itself in the Indian marketplace making it a niche product. We are available at one-fourth the price of Evian, but our aim is to be as international as Evian is. And why should it not be? We too boast of a water source that is pristine and pure. The natural mineral water space has been dominated by water from the Alps, harnessed by companies such as Danone, which sells Evian, and Nestle, which has products such as Perrier among others.

In a sense, we are showcasing what is available in nature’s glory out of India. The profile of the water from the Himalayas matches the best in the world. It has a total dissolved solids concentration of 350 milligrams per litre with a delicate balance of organic minerals. So why should we not pitch it against the best in the world?

How do you plan to distribute the product internationally?

We will leverage our larger beverage presence in markets such as the US, Western Europe and the Middle East. Here we have Tetley, Eight ‘O Clock Coffee, etc. We could use the existing infrastructure to pitch fork our products in these markets.

What is the kind of investment going into these initiatives?

We are making a reasonable amount of investment. The idea is to build as we grow rather than make an upfront investment. We would rather take a step at a time. Water is a big initiative for us. But it is not only plain water that we are looking at, but also functional, flavoured, enhanced and fortified water. We would like to straddle every end of the water pyramid. So, it becomes important to understand the needs of the consumer and to treat him or her as a moving target.

In my opinion Maslow’s hierarchy of needs flattens out into a continuum where self actualisation vies for attention with basal needs. This is a global trend. It therefore becomes imperative to tie up with the consumer at different points in his life to take advantage of this phenomenon.

How serious are you about inorganic growth?

We are very serious about it. We are looking at both organic and inorganic growth. If there are good targets in wide geographies, we would consider them if it gives us access into those markets.

So you are not shying away from acquisitions after the Glaceau experience?

I don’t think so. We are not shying away from anything.

Will you at any stage contemplate an entry into fruit juices and energy drinks, which belong to the wellness domain?