How to Start a Mineral Water Business? Investment, Process, Profits

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According to the Bureau of Indian Standards (BIS), there are approximately 1,200 bottling plants and 200 brands of packaged drinking water across the country. Out of these 200 brands, 80% of them are local. A number of popular brands in India are Bisleri, Kingfisher, McDowell’s No. 1, Aquafina, Bailey, and Kinley.

Golden Advice – You should focus on the 20-litre jar while starting your business as this sector is highly unorganized without any competition from big players.

Among these brands, Bisleri has captured the majority of the market share, and it stands at 36%. Coca Cola’s Kinley is next in line with a 35% market share. This is followed by Aquafina, at 15%. Other smaller brands that do not have a major market share in the mineral water sector are Parle Agro’s Bailey, Kingfisher and McDowell’s No. 1. Today, consumers purchase mineral water in 500-ml bottles, one-liter bottles, and bulk packs, with over five-liter capacity. Many people purchase 20-liter bottles for both commercial and home usage.

Is Bottled Water Business Profitable?

The profit margin in mineral water business is highly dependent. If you sell 500-ml, 1-liter, and 5-liter jars, the average profit will be 10-15%. However, if you sell 5-liter jars, the average profit will be around 30-40%. But, the number of bottles sold also varies per category. The number of bottles sold in the small bottles category far more exceeds the number of bottles sold in the large jar category.

ADIFA can help you prepare a revenue plan for your water bottle business. Contact them here.

How to Start a Mineral Water Plant in India?

Mineral Water Plant Licences & Registrations

There are a variety of registrations that you need to go through before finally starting your business. Remember, all the below registrations is mandatory without which your business will be illegal and punishable under law.

  1. Firm Registration – You can easily start your mineral water business by registering a Proprietorship or Partnership firm. If you are starting on your own without any partners, go for a Proprietorship firm, but if you are starting with two or more partners, register a Partnership firm. You can also register a Limited Liability or Private Limited company, but that is hard and costly to manage. Register a Limited Liability or Private Limited company only if you are planning to raise funds from an investor. You can also convert your company type later.
  2. BIS Registration – ISI Specification packaged natural mineral water is IS 13428:1998 and for packaged drinking water is IS 14543: 1998. BIS is a national body which maintains the quality, safety, and reliability of products in India. The BIS license is expected to be granted within 30 days of submission of BIS Certification application.
  3. GST Registration – GST Registration is mandatory for every business. There is NIL GST on water (no mineral) but the GST rate for water with added minerals is 18%. The HSN Codes for water including aerated, mineral and non-mineral are 22011010 and 22011020.
  4. Trade Licence – Trade license is issued by the local authority. In the case of towns and cities, Municipal Corporation issues a trade license. In rural areas, the Panchayat or SDO (Sub-Divisional Officer) may offer a trade license. It differs from state to state and city to city. You can always Google to get more information.
  5. Pollution Certificate – Water treatment plants can cause pollution. The State Pollution Control Board of every state issues a certificate after inspection of your plant. The rules, regulations, and norms differ from state to state.
  6. FSSAI Registration – Food Safety and Standard Authority of India issues an FSSAI license after inspecting your plant and product. The FSSAI license number has to be printed on every water bottle that you manufacture.
  7. Trademark (Optional) – If you have a brand name like “Kinley”, “Bisleri” or “Aquafina” that you don’t want any other business to copy, a trademark will protect it. However, it is not mandatory to start your business. It is only a prevention measure to stop competitors from using your brand name.
  8. MSME/SSI (Optional) – Government has introduced a lot of schemes for MSME (Medium and Small Enterprises) and SSI (Small Scale Industries) like low-interest loans, single window clearance and many more. It is not mandatory to register as an MSME or SSI, but it can help you to do your business easily.
  9. IEC Code (Optional) – IEC means Import Export Code. It is mandatory only if you plan to import your raw materials from other countries and export your mineral water bottles to other countries. If you plan to sell within India, this license is not required.

How to Register All the Above Licenses?

All the above licenses are mandatory and take time to register. Moreover, you have to fill a lot of forms and comply with rules and regulations timely. You can yourself apply to all the above license and register but it will take time and a deep understanding of the legal processes to do so. We recommend you to use a third party service provider to register all the above licenses.

MyOnlineCA can help you register all your licenses easily without any hassles. Contact them here.

Area Required

We recommend you to rent a minimum of 1000 sq ft area to start your mineral water business in India. You can split the area into two parts – half of it to store the raw materials, bottles, etc and the other half to process the water, package it and water treatment.

Before selecting the area, make sure that the area has groundwater and is not too far away from the actual market. You can call “Water Boring Company” in your area to check if the land has water below it.

The location also plays an important role. If your plant is in the middle of the city, there may be problems like high rent, difficulty in transportation and restrictions from the government like strick pollution rules, etc.

ADIFA can help you find the right location for your plant by keeping in mind your budget and all other important factors. Contact them here.

Raw Materials

The basic raw material for mineral water manufacturing plant is of course water. The most preferable way to get water is underground boring.

There are other raw materials that you have to purchase including water bottles, bottle caps, chemical, reagents, pouches, cartoon boxes, etc.

Water Bottles

You can get PET water bottles of 500ml, 1 liter, and 5 liters to start your business. Depending on your supplier, these bottles can come up readymade. But most of the suppliers sell a compact form of these bottles known as Bottle Preform in which case you have to use a PET Blowing Machine to blow up the bottles.

The Bottle Preform looks like the picture below. Price of PET Bottles (1000 pc) varies between ₹3,500 to ₹5,000.

The PET Blowing Machine looks like the picture below.

Alternatively, if you just want to sell the water in 20-liter jars, the investment will be less as you don’t need the PET Blower machines. The 20-liter jars are readymade and are recycled. When a customer needs a 20-liter jar, he gives you his empty jar and you give him a filled jar. So, you can start your business with a limited number of jars. The price of 20 Litre Jars (1000 pc) varies between ₹1,00,000 to ₹1,50,000.

Chemical and Reagents – Find a list here.

List of Machinery

There are different types of machinery available for starting a water treatment plant. There is fully-automatic, semi-automatic and manual equipment. You have to frame your budget, target market and requirements to decide which machinery you should buy. Fully automatic machines are costly while semi-automatic and manual machines are comparatively cheaper than fully-automatic machines.

Below are the details of the machinery that are required with a price.

  1. Submersible Pump (1-3 HP) – ₹15,000 to ₹20,000
  2. Storage Tanks (1000 Litre) – ₹5,000 to ₹7,000
  3. Sand Filter Activated Carbon Filter (30-40 T/h) – ₹50,000 to ₹70,000
  4. Treatment Tanks (2000 litre) – ₹60,000 tot ₹90,000
  5. Reverse Osmosis Plant (3000 litre/hour) – ₹1,00,000 to ₹1,50,000
  6. Chlorination Tanks  (1000 litre) – ₹25,000 to ₹40,000
  7. Sand Filter  (Automatic) – ₹15,000 to ₹25,000
  8. Activated Carbon Filter  – ₹15,000 to ₹40,000
  9. Micron Filters – ₹5,000 tot ₹14,000
  10. Ultraviolet Disinfectant System – ₹45,000 to ₹80,000
  11. Electronic Doser For Alum And Chlorine – ₹20,000 to ₹60,000
  12. Ozone Generator – ₹15,000 to ₹60,000
  13. Water Sterilizers And Dispensers – ₹3,000 to ₹10,000
  14. Water Filling Machines – ₹2,00,000 to ₹4,00,000
  15. Bottle Wrapping Machine – ₹1,70,000 to ₹3,50,000
  16. PET Blower – ₹1,50,000 tot ₹5,00,000

How to find Suppliers for Machinery and Raw Materials?

There are numerous ways to find suppliers for the above machinery and raw materials. Below are some of the most common ways to find these suppliers.

Indiamart

Indiamart is India’s largest B2B network that connects suppliers with buyers. I bet you have already heard about this platform. You can just search the machine that you require and you will be connected to a large number of suppliers. You can then negotiate with them. I recommend you to choose a supplier that provides after-sales-service and is nearest to your location.

Alibaba

Alibaba is another similar platform like Indiamart. The only difference is that it connects you to suppliers in India as well as China and other countries. If you are importing your machinery and raw materials from other countries, register for IE Code (Import Export Code). I suggest you choose a supplier within India as it will be easier to get in touch for after-sales-service in case of machinery failure.

Local Intelligence

You can visit other water manufacturing business in your area and gather information about the suppliers to buy equipment and raw materials from. This is a tricky process as most vendors don’t want to disclose their sources and rates. You can use some “James Bond” skills to get the information you want. However, that is a topic for another discussion.

ADIFA can help you create a business plan and find the right suppliers for your business. Contact them here.

Water Purification Process

Below is a summary of the water purification process. However, the process is highly dependent on what machinery you use for your water treatment. The supplier will provide you with all the relevant information.

  1. Collect The Water – The water is pumped out of the ground and stored in the storage tank. The water is dozed with alum for coagulation with heavy metals and other insoluble matters.
  2. Remove Impurities – After allowing the water to settle for 1-2 hours, the impurities are removed with the help of osmosis technique.
  3. Bubbling Chlorine Gas Processes – The purified water is then transferred to a chlorination tank where the bubbling chlorine gas process kills the harmful bacteria.
  4. Sand Filtration – After the chlorination process, the water is passed through sand water filters to trap the undissolved impurities.
  5. Carbon Filtration – Carbon filtration removes the foul smell of chlorine and purifies the color of the water.
  6. Micro Filters – The microfilters performs terminal disinfection and removes the impurities below 5 microns, 1 micron and 0.4 microns in size.
  7. Ultra-violet Filtration – The water is then passed through an ultra-violet filtration chamber that kills the remaining bacteria and makes the water drinkable.
  8. Bottle Filling – The mineral water is then filled into bottles using automatic filling machines or manually. The bottles are then capped automatically or manually depending on your machinery.
  9. Packaging – The filled bottles are then wrapped in sheets and packed into corrugated boxes for transportation. A box can contain 12 to 24 bottles depending on the box and your requirements.

Total Investment

Minimum Investment for Non-Mineral Water Business with 20 Litre Jars for 1000 sq ft area

Rent Security (Delhi) – ₹1,00,000
Registration – ₹16,000
Machinery – ₹1,48,000
5 Litre Jars (100 pc) – ₹10,000
Marketing – ₹50,000
Infrastructure – ₹20,000
Service Charges – ₹20,000
—————————————-
Total – ₹3,64,000

Minimum Investment for Mineral Water Business with 500ml, 1 litre and 5 litres Bottles for 1000 sq ft area

Rent Security (Delhi) – ₹1,00,000
Registration – ₹16,000
Machinery – ₹2,98,000
Pet Bottles (1000 pc) – ₹1,00,000
Marketing – ₹50,000
Infrastructure – ₹50,000
Service Charges – ₹20,000
——————————————-
Total – ₹6,34,000

How to Sell Mineral Water Bottles?

Selling your final product requires a whole set of sales skills. You yourself have to figure it out and prepare a plan for selling your mineral water bottles. I am listing three common techniques to give you a headstart.

Local Market

You can directly sell your water bottles to restaurants, food vendors, Kirana shops and several other local sellers in your market. The trickiest part is to convince them to purchase your bottles as no one wants to invest in a new brand. The best technique that works, in this case, is offering them the product first and collect payment only when the bottle sells. You can also lure them by increasing their profit margin and keeping a low profit for yourself in the initial days.

Wholesale Market

There are distributors, dealers, and wholesalers that can easily boost your sales. You have to do some ground research to find them and talk to them. Most of the wholesalers order bulk quantities, so make sure that you are able to handle the orders and deliver on time. The same technique can be used if these distributors don’t want to invest in a new brand, offer them the stock first and collect payment only when the product sells.

Online Market

The same Indiamart and Alibaba that you bought your machinery from can also be used to sell your water bottles. List them on the platform and wait to form a buyer to contact you. Keep in mind to include transportation and handling costs in your accounting so that you don’t suffer losses. If you get an order from an overseas buyer, you should have your IE Code registration ready to export your mineral water bottles.

ADIFA can help you prepare a marketing strategy to sell your water bottles. Contact them here.

So, what are your thoughts on this story?
Tell us in the comments.

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Aabha Chanda
Aabha is the author of the category "Startup Tools" under our "Resources" section. She has been writing for 4 years.

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