The proposed joint venture between Tata Global Beverages (TGB) and PepsiCo, announced this April to develop beverages in the health and wellness space, is likely to begin with developing affordable water.
Discussions are on, say sources, on the possibility of pricing a one-litre bottle of water below Rs 10, perhaps even around Rs 5. The joint venture may also offer fortified water and low-priced beverages in the earth and wellness space to attract health-conscious customers.
The joint venture, say persons in the know, will not develop products related to tea, as PepsiCo already has a tie-up with Unilever on tea beverages across the globe. It is expected to cover areas other than India, too.
The Indian packaged water market is already worth Rs 1,500 crore to Rs 2,000 crore and constitutes 15-20 per cent of the overall packaged beverage industry, which sees around Rs 12,000 crore of annual sales. The water market is growing at around 20 per cent yearly, but margins are very low, as many companies do heavy discounting in the retail market. The market is divided into two distinct segments, institutional and retail.
