Amul to foray into bottled water

To capitalise on its tremendous brand equity and offset the margin pressure on the dairy business, Amul is planning to foray into the bottled water segment starting with its home state, Gujarat.

The brand name of the water shall be ‘Narmada Neer’ to capitalise on the sacred status of Narmada river in Gujarat. It would be available in 200ml pouches, 1 litre, 5 litre and 20 litre PET bottles.

If the product get accepted in Gujarat, the venture would be extended to other states in Indian and then Amul could piggy back on its extensive retail network of five lakh outlets across the country.

Bottled water could otherwise provide good margins and the profits from the venture would be primarily used for welfare of families in the Amul’s dairy trade.

10 years back, Amul did take a shot at bottled water through ‘Jaldhara’ which was produced by NDDB. However the venture failed owing to less demand for packaged water in market.

But with this market growing bigger and expected to grow at 40% every year, Amul is surely going to benefit. Another positive for the company is that 40% of total national market for packaged bottled drinking water is in western India, which Amul is exploring initially.

But going by scale and investments of Amul, it would seem that the venture would be albeit on a shorter scale and done only to fulfill corporate social responsibility.