Can risk be calculated ?

The word "Risk" itself is pointing towards journey into the unknown. However, it need not be a 100% unforeseen risk, and on the top of it, it can be known at least, if can't be avoided.

While most of Bottled Water Entrepreneurs check technicals of the project, visit many suppliers at various places, and collect a great piece of information, they actually do not devote enough time for their detailed Financial Calculations. The most important is the actual Risk involved.

"Should I venture into this ?"

This is a typical question every entrereneur asks. My answer to them : If your gut feeling says, go ahead, however, check the amount of risk before that, as any wrong decision may pull you into damage which takes years to recover from.

Can it be a "Calculated" Risk ?

Absolutely yes. 3 ways to do it. Let's explore those :-

1. Very first, understand the ROI & overall investment needed : Refer the online/offline material to first confirm this & check your own investment appetitie. Then decide the business Model.There is nothing wrong to start small. 
2. Thing Big Right : Check your Financial Position, if you can insure for the same. Calculate the holding period :- The number of months which may go without active income & make arrangements for the same. You should and can calculate the impact which these months will make.
3. Loan is Okay, but not a Victory : Loan is an asset for Bankers, initially a liability for an entrepreneur. Take it carefully. No problem being extra careful. Calculate everything before going to banks. This step is most important.

Be Wise, no Heroics

Optimism is proved when it realizes the deliverables. Hence the "deliverables" is the true wealth you make & contribute towards the national treasure. It's a very responsible decision. By becoming a financially aware entrepreneur, you are taking a step towards this. It's a DUTY.

The Need : Water Vending Machines ( Not a Mineral Water Plant )

The region faces contaminated water 

V. Madugula is a place in AP, where residents of a small village had to protest to demonstrate the sorry state of water. Here's a small synopsys of the news I received from Google Alert ( thanks to gemini )

Here are the the impacts of 15 years of quarrying in Anakapalli district:

• Quarrying has dried up local streams and borewells across three villages, causing severe water scarcity.

• The remaining borewells, even those drilled deep, are yielding contaminated water, forcing villagers to use unsafe sources.

• Residents attribute serious health problems directly to consuming this polluted water from the quarrying sites.

• Villagers have appealed repeatedly for a mineral water plant and official intervention, but assurances remain unimplemented.

• Local leaders threaten to present samples of the polluted water to the District Collector if authorities fail to act.

I don't know how have the villagers come up with demand for a Mineral Water Plant; but the true need is Properly Run Water Vending Stations. Water ATM's

And they should not be just install-forget type; but entrepreneur driven.There is a lot more as a business, Good, Ethical business in this. Watch this Video

These Reports : Greatly misleading !

Today I received an email which was mentioning the growth of the Bottled Water Industry in India. I handed over the link to Gemini and asked it to concise the same for me, and the report ( which is on sale for several thousand USD, and compiled by a US agency ) just says simple 3-4 not so great things. Here's the synopsys of the synopsys provided by Gemini :-

1. Growth Trajectory: The market is projected to grow from over 84 thousand Crores INR in 2024 to over 2.6 lakh thousand Crores INR by 2033. (12.45% CAGR).

2. Key Drivers: Growth is fueled by rising health consciousness, concerns over tap water safety, and the expanding spending power of the urban middle class.

3. Product Shift: The industry is moving toward premiumization and innovation, with strong demand for functional, flavored, and sparkling water options.

4. Sustainability & Regulation: New FSSAI rules mandate the use of 30% recycled PET (r-PET) in bottles by March 2025, pushing brands toward eco-friendly packaging solutions.

5. Distribution Change: E-commerce, quick-commerce, and the HoReCa segment are modernizing distribution while brands expand fiercely into Tier-2 and Tier-3 cities.

As a "confirmation Bias" or "Availability Heuristic", people get hooked to these so-called "growth" figures. Let's go deeper to take an overview ....

Consumption Pattern

This whole thing talks about "Bottled" water. How does it easily assume that people are going to get driven by fear, and buy more "Bottled" water ? And who are these people ? only those who live in Urbans, Metros ? Even in Metros, I haven't observed anyone buying a "50 Rs" bottle, when a "20 Rs" bottle is available. The only buy when they are made to. like inside a Food Mall, where only the Bisleri Bliss is available sold at Rs. 30 instead of Rs. 20 the regular Bisleri.

Agreed, there are changes in people's consumptions. It's only by Variety. However, someone looks at this report & thinks that how great opportunity it is, it's only half the truth. The opportunity is to be properly encashed by understanding consumption patterns, locale by locale. 

Alternate Solutions

Not that just bottled water is the solution. Who says tap water is bad in every part in India ? It is fairly good, and improving season by season. Rainwater Harvesting is on the move, and people might have their own stored water at their houses. Water Vending Machines ( ATMs ) are also a great way to substitutue the bottled water. It goes further and offers clean, cheap and yet sustainable solution for all.

How easy is someone starting a Bottled Water Business from scratch in India ?

If it's your 1st time venture, take a step by step approach. Start from being a Distributor to some brand. Then go for Co-Packing, meaning, under your brand supply to others, however, not producing the water by yourself. It will be someone else's water. Then after some time, once you are confident, start your own plant.

Which stage is right for these steps ?

The volume you sell is critical. Let's take example of 1 ltr bottles, which are more popular in Indian market. 

• Once you reach daily 200 cases ( 12*200 ) , and maintain the level for 6 months, think of co-packing.
• Once you reach daily 700-800 cases, and manintain for 6 months, start with own plant.

Major Things for a Manufacturer :

• At least 5000 sft land, 3000 sft building
• Local licenses + Fssai License
• Capital : 35 Lakh for Jar , 70 Lakh for Bottle + Jar 
• Payback : 4 Years, if you run 1 shift daily for 300 days/year , for 4 years

Major Things for a Distributor:

• At least office space ( 500 sft )
• Local licenses + Fssai License as distributor
• Capital : Max 1-3 Lakh
• Payback : No calculation

Major Things for a Co-Packer:

• At least office space ( 500 sft )
• Local licenses + Fssai License as Re-Labeller
• Capital : Max 5-15 Lakh
• Payback : No calculation
• ** A Co-Packer is also considered to be a Manufacturer

For Fssai Explaination check this Youtube Playlist 

Start with gathering necessary information first

• Read : https://mineralwaterprojectinformation.org/access-free-stuff/
• FAQs on Quora :- https://www.quora.com/profile/Saumitra-M-Ghotikar/answers
• Listen to this Video :- https://youtu.be/viIi4Workc8
• Get Educated ( After you acquire free stuff :- https://mineralwaterprojectinformation.org/trainings/

No Business is "Easy", so is Bottled water.

Bottled Water Business under Fssai

As you may/may not be aware, that the Packaged Drinking Water & the Natural Mineral Water don't carry the "Mandatory BIS" tag, and now just need 1 License : the Fssai. We also have a special article on this. 

Last October, 2024 this became a Gazetter notification, then in November, Fssai declared Water as a High Risk commodity. Now, after almost 10 months past the same, how the Bottled Water business is viewing its future ?

Major compliances & changes 

• The declaration under High-Risk makes the quality checks very stringent.
• There are very heavy penalties for non-compliance.
• There is currently no special lab needed as was needed under the BIS. 
• 2 Lab reports needed to be submitted every 6 months
• 1 Annual Audit will be compulsory. Its with certain quality checks.
• Pre establishment plant inspection is mandatory ( as was in the BIS )
• CGWA NOC is going to be mandatory for every plant. 

Effects 

Entering this business is easier ( Just Rs.7500 annual fee instead of Rs. 1,00,000 + for BIS

The compulsion ( at present ) of having a lab has gone. This brings the Capex down. And opex as well.

Heavy Penalties threaten the plant owner about strict compliances.

Non-regulated earlier ( The Water Vending / ATM ) businesses have a chance to get regularized.

The water-borne diseases due to these unregistered vending stations, will be expected to come down as they can get an Fssai license & will be subject to the Lab reports necessary.

Overall it looks a little challenging to the plant owners, who enjoyed marketing-less freedom till this time. They will need to equip themselves with latest trends to sustain in the market.

You can alse watch a Youtube Short on this subject.