Nepal | May 27, 2019

Price of priceless water: Explore market

Harihar Guragain

Interestingly, our ‘real’ spring water must also have better ‘spring water quality’. National policy makers and entrepreneurs should manage and explore the highly concentrated Kathmandu-based so-called water processors to move ahead

River. Illustration: Ratna Sagar Shrestha/THT

Last week, I got a bottle of water at my office in Canada. I was happy to share it with one of my old friends in Fiji who works in the Fiji Water Company. At the same time, the‘natural spring water’ from Fiji water drew my attention while I saw the price which was 3.99 Canadian Dollar for a 1.5 litre bottle, almost 2.5 times the price of petrol in Canada and more than double the price of petrol in Nepal. I was wondering how water came from Fiji to Canada crossing over 10 thousand kilometers.

Fiji water, with an average international retail market price of 1 cent per ml, made me share the huge opportunity for Nepalese entrepreneurs. As continuation of my techno commercial role in my previous job, I am in regular interactions with Nepalese entrepreneurs for a decade. We spent hours designing and developing new and innovative food items.

Raw material sourcing and pricing always become a huge obstacle in designing a good quality product with a competitive retail price. Starting from biscuits, noodles, alcoholic and non-alcoholic beverages, fat and oil, grain and cereals, legumes to ice-cream and bakeries, a big chunk of dollar is draining to purchase the raw ingredients and, not surprisingly, every time the profit  margin is squeezed by hiking raw material prices, without compromising on the quality.

This is the state of our manufacturing industries and none of the political and governmental agencies is aware of it, rather they are sometimes favouring adjusting the quality for personal benefits. The quality products remain in the grocery shelf for a long until their expiry.

I remember many small and medium food industries are either running their business with little interest shutting down or being bankrupt in a decade; and a few attracted towards service industries like hospital, school, college, banking etc.

Trading business is an excitement for many businessmen rather than manufacturing. Even ‘manufacturing’ nowadays appears as doing business for key raw material manufacturers who are making much profit. Foreign raw material processing, so called manufacturing, can’t makes us rich. It is simply doing business for others.

We should be inspired by the success story of the 21 years old Fiji Water Company. We have hundreds of ‘real’ spring water sources that can thrive in the global market. The amazing taste of water from the Himalayas  can flourish in  the growing international water market which is at the rate of 7% Compound Annual Growth Rate (CAGR) over the last five years. Moreover, the quality and taste of our water is better. Fiji water is the  premium brand in the world’s top restaurants and hotels. They could be able to sell silica as one of their marketing features. Here is a question for us, why not sell water as a Mt. Everest dew? Interestingly, our ‘real’ spring water must also have better ‘spring water quality’. National policy makers and entrepreneurs should manage and explore the highly concentrated Kathmandu-based so-called water processors to move ahead.

Beverage Market Corporation published a data mentioning US alone consumed 44.4 billion litre of bottled water with revenue of 14.24 billion USD in 2015. Per capita water consumption is increasing significantly replacing other beverages.

The same report estimated global bottled water consumption was over 330 billion litres in 2015, with per capita consumption of close to 45 litres which was a gain of 10.6 litres over five years. China (77.6 billion litre), USA (44.4 billion litre), Mexico (30.5 billion litre), Indonesia (25.8 billion litre), Brazil (20.3 billion litre), India (17.4 billion litre), Thailand (13.7 billion litre), Germany (11.7 billion litre), Italy (10.9 billion litre) and France (9 billion litre) are the top ten bottle water consuming countries.

The recent bottle water revenue numbers from the world’s top 10 bottle water manufacturing companies are respectively Nestle (Switzerland)7364.72 million USD; Hangzhou Wahaha (China) 5074 million USD; Danone (France) 4652.32 million USD; Coca Cola (USA) 3900 million USD; Nongfu Spring (China) 2217.78 million USD; Tingyi Holdings (Taiwan) 1330.668 million USD; Pepsi (USA) 1271.704 million USD; CR Beverages (China)  332.667 million USD; Fiji Water (Fiji) 250 million USD and Bisleri (India, 94.6 million USD.

The price of this ‘priceless’ water is astonishing. Think for a while how the naturally available petroleum products are distributed across the world, including Nepal. Can’t we sell our unique water in the same way? We need a big marketing network and collaborative approach which is possible. Two of the top ten bottle water consuming countries are our closest neighbours.

We can fill the empty goods-carrying Chinese and Indian lorries and trucks with our water in return. Again, we have extensive flight connectivity with Gulf countries like Saudi Arabia, UAE and Qatar which have high per capita of income and bottle water consumption countries.

Considering the cheapest raw material with the world’s best quality and probably the cheap workers, with a comparatively low investment, Nepal can establish hundreds’ of million-dollar companies instantly. Nepalese natural spring water industry has an immense potential and requires a different marketing approach.

Guragain is a food scientist working in Canada

 


A version of this article appears in print on January 30, 2017 of The Himalayan Times.


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