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“Need to educate, create awareness among hoteliers about bottled water”
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Monday, 15 July, 2019, 08 : 00 AM [IST]
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 Veen, a natural mineral water brand from Finland, 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 Veen’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 Veen is available in 17 countries across Europe, the Middle-East and Asia, including India and China.
“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,” said Ganesh Iyer, national sales director, Indian sub-continent, Veen Waters, in an e-mail interaction with Nandita Vijay. Excerpts:
Give details on the Veen 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 brand 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 Veen. Butwe 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 footprints in 35-37 cities on a pan-India basis till date, and expect the same to reach 58-60 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?
Veen is of Finnish origin, and thereby its iconic design is the main strength of the brand . Other than this, we were the first water brand to launch 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, i.e., Bhutan.
The water is sourced at a place called Samste, in 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 is it 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 food and beverage managers on the importance and significance of natural mineral water, preferably in a glass bottle in the culinary environment, not just from the 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 (compound annual growth rate) of 40-43 per cent year on year (y-o-y), and in terms of pricing, we are at a premium of 35-38 per cent 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 three-star to four-star and from outlet to outlet. A 660ml bottle of Veen Natural Mineral Water is priced between Rs 175 and Rs 225. A 330ml bottle costs between Rs 100 and Rs. 125. While the 660ml bottle of Veen Sparkling Mineral Water is priced between Rs 350 and Rs 400, the 330ml bottle is priced 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 Veen look at addition of flavours in its water brand?
We have plans to launch the Veen Ayurveda Water and Veen Mixers, which is tonic water and ginger ale, in the last quarter of this financial year
How would you describe the current scenario 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 per cent from 2018. Based on volume, the market is likely to reach 35.53 billion litre by 2023, expanding at a CAGR of 18.25 per cent between 2018 and 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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