OBEROIs PLAN OWN WATER BRAND

Kalpana Pathak / Mumbai September 10, 2008, 5:42 IST

In talks with Pune-based Mulshi Springs.

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The Oberoi group-promoted East India Hotels (EIH) will soon serve its own brand of spring water in its hotels and resorts, speciality restaurants, waiting lounges and in-flight services.

When contacted, Naveen Luthra, Managing Director of Mulshi Springs Natural Spring Water, said, “Our Company is in talks with one of India’s biggest hotel chains which has shown interest in distributing our product under their own brand and we hope to finalize the deal soon.” However, a senior official from the company confirmed that the hotel chain is none other than The Oberoi. The packaged spring water will be available in 200 ml, 500 ml, 1 litre and 1.5 litre PET bottles priced between Rs 50 and Rs 200, respectively. “Water will be sourced from a rain forest near the Sahara Amby Valley located near Pune. A new facility has been set up in the vicinity to facilitate packaging of water,” added the official.

However, when contacted, EIH said the news is incorrect. The Oberoi group operates in India, Egypt, Mauritius, Indonesia and Saudi Arabia with 30 properties under the brands – Oberoi Hotels & Resorts and Trident. It plans to take the total number of properties to 40 in the next three and half years. It has a room capacity of around 4,400 and the new additions would take the figure to 6,700 during the period.

“There is a huge demand for natural spring water among international and domestic tourists. With EIH planning to expand its network of hotels, this arrangement will be beneficial for the company,” said a source familiar with the development. EIH, however, does not plan to venture into retailing of spring water in the open market. According to sources, necessary approvals from Water Quality Association – a body under the US-based Food and Drug Administration – are in place for this venture. EIH is also said to have got its brand and logo registered.

“Having an in-house water brand adds to the hotel chain’s image and brand value. Increasingly, players in the travel and tourism business are looking at having a similar arrangement. There are other hotels too, which are said to be in talks with players in the packaged drinking water business,” said a Mumbai-based analyst.

The packaged drinking water market in India is worth Rs 1,500 crore and is growing at a compounded annual growth rate of 25 per cent. Of this, natural mineral water market is just Rs 100 crore.

In the retail segment, Coca-Cola’s Kinley and PepsiCo’s Aquafina together dominate about a quarter of the mass bottled water market. Bisleri, owned by Ramesh Chauhan, accounts for 16 per cent of the total sales. More than 50 per cent of the packaged drinking water market is dominated by 200 odd water brands that sell in regional pockets.


BACK TO NATURE

* The brand will be called Oberoi Spring Water and will be available in 200ml, 500ml, 1 litre and 1.5 litre pet bottles priced between Rs 50 and Rs 200
* Water will be sourced from a rain forest near the Sahara Aamby Valley located near Pune
* The packaged drinking water market in India is worth Rs 1,500 crore and is growing at the annual rate of 25 per cent

The hotel giant is looking at having an exclusive arrangement with Pune-based Mulshi Springs – a company that bottles natural spring water. The brand will be called Oberoi Spring Water and a formal announcement is expected soon.

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This article was first published in Business Standard and can be found online at: http://www.business-standard.com/india/storypage.php?autono=333944. Futuristic Media Network is not responsible for third-party content and claims no Copyright.

MULSHI SPRINGS NEARS DEAL WITH ITC, UB, OBEROIs

By Pooja Sarkar - Tuesday, September 16, 2008 03:08 IST

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Natural spring water firm eyes Rs 125 crore turnover in five years

MUMBAI: Mulshi Springs, the Pune-based natural spring water company, is planning to make a huge splash in the premium bottled water segment. The company is on the verge of signing deals with aviation baron Vijay Mallya’s UB group, hotel majors ITC and the Oberoi group. It is in talks with fast moving consumer goods major Hindustan Unilever Ltd (HUL) too. Naveen Luthra, managing director, Mulshi Springs, said that the company is in discussions with at least one ‘very large’ hotel chain and one airline major. He, however, refused to name the companies.

But a source close to the development said a deal with the Oberoi group for its East India Hotels is already through. The deal size is reported to be Rs 35 crore.

“Production has already begun and this water will be available in the hotels from November this year. It has been branded as Oberoi Spring Water and approvals from US Food and Drug Association and Water Quality Association are in place,” added the source.

The source said that the ITC deal has also been ‘almost signed’ and production for that would begin in December. “The water will be available in ITC hotels from February next year,” the source said.

The UB group is expected to start offering bottled natural spring water in Kingfisher’s international flights in the next six months. The bottles, in 200 ml and 500 ml sizes, will be made available to first-class fliers.

Rival Jet Airways is also likely to offer Oberoi Spring Water as the Oberoi group manages its in-flight catering services. In addition, the bottles will be sold in airport lounges.

Priced between Rs 50 and Rs 200, Oberoi Spring Water will be available in four sizes - 200 ml, 500 ml, 1 litre and 1.5 litre. When contacted, officials from both the Oberoi group and ITC declined comment. Meanwhile, the HUL deal is expected to go through in the next one month. The FMCG giant will source water from Mulshi Springs and do the packaging and bottling itself. HUL will sell this water in plastic bottles and not glass ones and retail them in shopping marts.

Once the deals are in place, Mulshi Springs will produce an estimated 30,000 bottles per day — 10,000 will be for Oberoi group, 5,000 for ITC and 10,000-12,000 for the UB group. The company already retails water under its own brand in high-end hotels in Mumbai. Its water utilization capacity is 4 million litre per day.

Under its overseas expansion plans, Mulshi Springs will sell its product in Dubai and seven other Middle Eastern countries from early next year. Also on the radar is the United States, where the premium water brand will be available from the first quarter of the next fiscal. In the next five years, the company hopes to scale up its turnover to Rs 125 crore from Rs 10 crore now.

The packaged water industry is pegged at Rs 1,800-2,000 crore. Of this, the premium segment accounts for Rs 100 crore.


This article was first published in DNA Money and can be found online at: http://www.dnaindia.com/report.asp?newsid=1190448. Futuristic Media Network is not responsible for third-party content and claims no Copyright.