ISI no more Mandatory, affected segment : 1 = BIS license holders

The recent notification to lift the "compulsory" ISI mark to run a Packaged Drinking & Natural Mineral Water Units have posed many questions in front of the existing license holders. However, every obstacle opens up way to a new solution. Let's try to contemplate here.

Ambiguity : The special, protected market gone kya ?

The consumers, especially the corporates etc, rely on the "ISI" license of the producer. Once they see this, and don't see that, their first screening is done. Now, it's expected that many of the plants will opt out of the licensing. Is this viewed as a threat or emergence of a special market ? 

My view :-

The corporates which truly care the hygiene etc, will still stay with the "ISI" holders. Those who just care for the compliance will go to others as well.

How to compete here ?

Staying with the BIS license, and stringently follow the tests. Use it as a brand. Also educate your audience through self publication, through social media & newsletters.You can bid for marginally higher prices, and can reason it out as well. Slowly, market, brand gets developed, and you may earn a solid reputation.

Build relation with the "consumers" not just distributors. Built a list of consumers of your water. Share coupons, with them through whatsapp, and share brand news about your company. Something like "loyalty List" can be very very handy.

Show how BIS compliant plant protects their hygiene. As stated in point no.1, share exactly how you meet the standards mentioned & why they are in place. It assures them their hygiene.

As time passes by many updates will appear. Let's watch. But welcome the change with a belief that it will bring a positive change.

BIS is no more mandatory for Packaged Drinking Water : Effects

With the recent Gazzeteer notification, it's very clear, that, within India, anyone willing to sell Packaged Drinking Water, will not be needing ISI mark, as it was mandatory, earlier. At present, there are 2 licenses needed, 1. The fssai & 2. The ISI ( Issued by the BIS ). With immediate effect, this will come into force.

😐Yes, you heard it right : Anyone willing to start his own production unit for Packaged Drinking Water, he won't need the BIS certified ISI mark. 

However, if somebody wants to take it, it can be taken as an added certification.

What can be the possible broad effects of this ?

For existing license holders :-

• They will loose the sort of monopoly, as many new entrepreneurs will enter this zone.
• They will need to find ways to prove their water's real worth
• BIS certification will have its true value, not just a "license"

For new entrants :-

• Big entry barrier gone
• Scope for more creativity
• More flexibility

Things are not as smooth as they look like 

• It will take some time for the fssai to make its own set of rules, however, it is more likely that they will follow BIS's ways in many procedures, but upto certain time-limit.
• BIS has a Scheme of Testing, through which, adeltration was automatically protected. Now, without BIS, how can this be protected ?
• There is likelihood of getting several complaints, at least till it gets stabilized.
• Fssai will replace BIS, things don't change much : That's what business owners expect.
• There is not enough strength of auditors/officers with the fssai; how can there be new licenses issued ?

I have listed down hardly a few challenges. The Association of All india PDW manufacturers has requested the fssai to re-visit the decision ( however, it won't be taken back ) & make certain amends in it. Let's see. Only time will tell the story.

This : Clauses 17 & 18 are omitted now.👇

The earlier Regulation said it is necessary :👇

Water ATM : Is it a sustainable "Business" Model ?

In a true sense, Water ATM is the best, very less discussed solution to all the growing concerns on Pure Drinking Water. Why am I saying so ?

1. It doesn't require a container ( In a Bottle of Packaged Drinking Water, water is the minimum cost ), most of it is the packaging : Bottle.
2. It omits plastic 100% , so it goes well with the 17 SDG ( Sustainable Developement Goals) Deviced by the UN. 
3. It provides local water at places without drilling the land
4. It will provide employment at local level 
5. It's the cheapest Water available

The threat to this model is the intervention of the govt itself. It should be taken out of the "Welfare" agenda. In this, these Water ATMs are not maintained & the whole thing goes to junk. 

We have created certain Videos through our Youtube Channel to explain the Business Model in depth, there is a complete playlist :-

==> https://www.youtube.com/playlist?list=PLUVSB_771ek1HhQF3P2CX-hRP4MZH0gxr

Some basics about "Profit"

When people talk about "Profit"; it's actually an enterprise level term. Every business having same category, product may still have different 'profits' though the general industry level profit "margin" may be same or equal.

For example, in Bottled Water in India, the production cost per bottle may be appx Rs 5 per bottle. This becomes 60 per case of 12 bottles. The same case is sold by the business owner at (general trend) Rs. 80 per case.

Revenue 80 * 10000 ( Cases sold per month ) = 8 Lakh

Less Prd cost 60 * 10000 = 6 Lakh 

Gross Profit  = 8-6 = 2 Lakhs ( 25% ) : 25% is the Margin

But the operating profit is something else. You need to deduct expenses such as :

S& GA ( Sales & Gen Admin Expenses ) , then you will get the Operating Profit, which is called as EBITDA : Earning before Interest, Tax, Depreciation & Ammortisation.

This will vary from business to Business

After this, EBIT will appear, by deducting Depreciation &/ ammortisation. 

Still this is NOT the Net Profit. Net profit will come after deducting Interest & Tax from the EBIT.

All of these ( After EBITDA ) don't tell you the operational efficency. The business might be loading unnecessary equipment costs or might be investing in certain non-business assets, on which it might have procured certain loans & paying interest, it might reflect here.

Point is : Never judge a business from its NET profit, look at the EBITDA first.