WATER IS MONEY

This summer has sparked an unprecedented 30% surge in demand for packaged drinking water in Tamil Nadu. Every year, bottlers step up production between March and August but this year they are scrambling to meet demand. The election campaign in the first two weeks of April also pushed demand up.
Most of the demand is for 500ml, one-litre and two-litre bottles and not bubble top cans. That’s because many households, which were the main consumers of bubble top cans, have shifted to RO water purifiers.
The state is home to 2,100 licensed packaged drinking water plants, of which 60% are located in Chennai, Chengalpet, Kancheepuram and Tiruvallur districts. While the average capacity of each plant is 70,000-80,000 litres a day, plants run at full capacity during the six-month period between March and August. The rest of the year, they operate at 50% of capacity as demand decreases with fall in temperature.
The annual size of the packaged drinking water business in Tamil Nadu is estimated at `3,000 crore by industry sources. And it’s expected to grow exponentially as even people in remote villages now depend on packaged drinking water on a daily basis.
The demand for packaged drinking water is the highest in the past 25 years, says T Prabakaran, state advisor, Tamil Nadu Packaged Drinking Water Manufacturers Association. “Tourists and the floating population prefer PET water bottles. These contribute about 60% of sales and bubble top cans account for the rest. The share of bubble top cans has fallen because households have started installing RO water purifier systems,” he says. Bottlers expect demand in Chennai and suburbs will further increase next month as families that are on vacation return when educational institutions reopen, he adds.
April to June is also the peak wedding season when demand for packaged water also rises, says Nandakumar Rajendran, assistant secretary, Tamil Nadu Packaged Drinking Water Manufacturers Association and proprietor of Vijay Aqua Minerals, Chennai. “The harsh summer pushed demand 30% above the usual spike we experience during this period. In fact, manufacturers are struggling to meet demand,” he adds.
Leading mineral water brand Bisleri International says there is an upsurge in sales of both water and fizzy drinks, particularly in regions experiencing extreme heat. “This demand surge is boosted by holiday travel. To enhance affordability and reduce wastage of water, we are introducing a 200ml pack priced at Rs5,” says Tushar Malhotra, director of sales & marketing, Bisleri International.
The high temperatures have revived the aerated beverages industry too. “Consumers stayed away from cold beverages during Covid. This scenario continued even after the pandemic ended and this hit our sales. However, the prevailing weather conditions has revived the consumption of aerated beverages to pre-pandemic levels,” says K P D K Karthik, proprietor, Kali Aerated Water Works (Trichy). The size of the Indian market for aerated beverages is pegged at nearly `15,000 crore and Tamil Nadu accounts for a market share of about 15%.
Even the chains selling tea and coffee are serving more cold beverages. For instance, Chai King is launching new cold beverages. “Sale of cold beverages usually increases to 35% of the total between April and July. But this year demand started rising in March itself,” says Jahabar Sadique, co-founder and CEO, Chai Kings. “We are introducing 10 new cold beverage varieties such as milk bubble tea and fruit bubble tea,” he adds.
“We are witnessing an additional 10% spike in demand for nannari sarbath, buttermilk and rose milk compared to previous summers,” says P Prasanna Venkatesh, co-founder and director, Madras Coffee House. The share of cold beverages in total sales during summer is usually 30%. Now, it has increased to 40%,” he says.
In restaurants too, filter coffee is taking a backseat. Ravi Muthukrishnan, chairman, Vasanta Bhavan Hotels, says, customers prefer buttermilk and badam kheer over hot coffee. “The sale of cold beverages has doubled in restaurants,” says Ravi, who is also the president of Chennai Hotels Association.