Yes, the bottled drinking water business in India can be profitable, with a potential profit margin of 15-20%. This is because the demand for clean and convenient drinking water is high. Also, there is a growing awareness of health concerns associated with tap water.
However, profitability depends on several factors:
- Location: Demand for bottled water is higher in urban areas, offices, and places with unreliable tap water supply. Thus, setting up your plant near these areas can reduce transportation costs and increase sales.
- Brand: Building a strong brand that signifies trust and quality can help you command a premium price and attract a loyal customer base. For example: Bisleri.
- Packaging: Attractive and eco-friendly packaging can influence customer purchase decisions.
- Operational Efficiency: Optimizing your production process and distribution network can significantly improve your profit margins.
The bottled water market in India is competitive, so having a well-defined business plan will be important for your success.
If you want to understand further, let us take a look at the cost of setting up a bottled water business In India:
How Much Does It Cost To Start a Bottled Water Business?
The cost of starting a bottled water business in India can vary depending on the scale of your operation but typically ranges from ₹5 lakhs to ₹30 lakhs or more.
Here’s a detailed breakdown of the factors influencing the cost for both small-scale and large-scale setups:
Small-scale Setup (₹5 lakhs – ₹10 lakhs):
- Land & Building: This can be a significant cost, even for a small operation. Renting an existing warehouse or industrial space might be more economical than purchasing land and constructing a building initially. Costs can vary depending on location and size but expect a range of ₹1 lakh – ₹1.5 lakh per year for rent.
- Water Purification Plant: This is the heart of your operation. A basic Reverse Osmosis (RO) plant with a capacity of 100 Liters Per Hour (LPH) can cost around ₹1- ₹2 lakh. Upgrading to a higher capacity plant will increase the cost.
- Bottles & Caps: Purchasing bottles and caps in bulk is important for cost-effectiveness. Prices depend on the material (plastic, glass), size, and design. Expect a range of ₹0.50 – ₹2.00 per bottle/cap for a basic setup.
- Labeling & Packaging: Labels for branding and providing product information are essential. Basic printing can cost around ₹0.25 – ₹1.00 per label. Consider the cost of shrink wrap or other packaging materials for bundling bottles.
- Labor: Hiring staff for operating the plant, packaging, and potentially for initial delivery might be required. Costs will depend on location and number of employees.
Large-scale setup (₹30 lakhs or more):
All the cost factors mentioned above apply to a large-scale setup, but with a significant increase in scale:
- Land & Building: You’ll likely need to purchase land and construct a dedicated facility to house a larger production plant, storage space, and potentially an office. Costs can range from ₹20 lakhs onwards.
- Water Purification Plant: Industrial RO plants with much higher capacities (1000 LPH or more) are needed. These can cost anywhere from ₹5 lakhs to ₹10 lakhs or more.
- Automated Bottling Line: For faster and more efficient production, you can consider investing in automated bottling lines for filling, capping, and labeling. These can be expensive, ranging from ₹10 lakhs to ₹20 lakhs or more.
- Transportation: Delivery vehicles are crucial for distributing your product to a wider market. Depending on the chosen mode (trucks, vans), expect costs to range from ₹5 lakhs to ₹15 lakhs or more for vehicles.
Additional Costs (both scales):
- Licenses & Permits: Obtaining Bureau of Indian Standards (BIS) certification and FSSAI (Food Safety and Standards Authority of India) licenses are mandatory. Costs can vary but typically range from ₹1 lakh to ₹2 lakh.
- Marketing & Branding: Building brand awareness is essential. Costs can vary depending on your marketing strategy (local advertising, online marketing, guerrilla marketing, etc.) but budget ₹1 lakh – ₹2 lakh initially.
- Utilities: Electricity and water usage for purification will be ongoing costs.
Important Point To Remember: These are estimated costs and can vary depending on specific choices of equipment, location, and manpower. You need to conduct thorough market research and get quotes from suppliers before finalizing your investment plan.
We hope this guide will help you in setting up a profitable bottled water business in your area or at a national level. If you are interested, you can also read our other guides on T-shirt printing and food truck business.
