Is installing own Bottling Plant a viable option ?

Recently I read a news that Cybage, an IT company installed its own Bottling plant at its Pune Unit. I was first curious, and then quite surprised to see the same. It wasn't clearly mentioned in the news ( for which it was meant 😀). I could find out from some pics :-

Instagram Story 👇

Looks like a Glass Bottle 👇

Yes, it must be a glass bottle 👇

The Capping Method is ROPP Capping, used for glass bottles with Aluminium Caps like those medicinal bottles, mostly. Had it been Plastic, the mechanism is different.

Why is the company doing it ?

They say : 

Also :- 

It's done as a step towards the ESG initiatives. Well, what is this ? 👇

My opinion about having own bottling plant :-

1. Technically, it's like installing a swimming pool for own family. You will do that if you truly afford that, OR if you are getting certain advantage, like cybage is doing for. They are doing it towards the ESG , indirectly contributing to the 17 SDGs. Intention : Investors & Tax.
2. 80,000 Bottles a year ( looks like a 500ml Bottle ) is not a huge consumption for which it stands a wise decision, in any sense, besides the ESG thing. It becomes 7000 bottles a month, 250 bottles a day of 500 ml. Nothing. They could have easily outsourced that.
3. To maintain a full-scale bottling plant for such a small consumption looks not correct. They haven't specified the water source. If it's RO Plant + The filling Machine.... It needs technicians too.
4. However, It is also possible that they have outsourced the full operations without buying anything. It might make some sense in this decision. Caring the plastic waste is truly a good intention.
5. There was a still better option, if they could implement Water ATMs. Water ATMs not just cut Plastic, but also omits the usage of Bottles. The Glass Bottle Manufacturing also carries a huge Carbon Footprint. Buying Glass Bottles, consuming them is also indirectly contributing to disrupting the environment.

For Machinery Suppliers 

• This can be another business model. Approach High-Profit companies, suggest them this idea, talk more on ESG : They will understand immediately, it's a buzz-word.
• You can also take contract for running a plant at a cost per bottle model in addition
• Can install a number of Water ATMs in premises of big companies & maintain them at cost. This can also attract good CSR business.

Truth : We only learn by committing mistakes

A little background is necessary to understand what & why I am saying this 👇

I conduct trainings for the bottled water entrepreneurs. ( no-no, this post is not to promote that😐 ). Point is something else. My trainings are for the business "owners". In trainings, I do talk about machines, however, I am strictly keeping myself away from suggesting suppliers, however, I do guide on what to look into appointing one. I also don't train on procedural part, focus on quality aspects rather than this. 

My focus is more towards the ROI aspect. I do train people on designing their plant capacity propely, so that they choose right machines, at the right stages of their business venture.

For years togther ( before Covid ) I used to conduct physical trainings at PUNE, and other cities. These trainings, due to cost limitations, were for 1-2 days. However, post covid, I started offering the same training in half the price through internet, I settled on a 4-day training course through 90 min session each day.

Entrepreneurs did use to join, however, somehow I was never satisfied, feeling it's incomplete, I took a whole 1 year gap ( 2023 ). And restarted from April 2024, with a 2- Week, 10 session course, same cost course, in evening. Now this is having a good response & good satisfaction to me too.

Main reason : The subject lingers in the participant's mind for more time. In turn he/she has more queries. Further to this, I also offer them a 1:1 assesment in which they can ask me their very personal queries too.

Still, in each of my batches, I find at least 1-2 participants who join after ordering the plant & machinery. Most of them find that they have bought some machines under their emotional influence.

Why do we commit certain mistakes & how can we avoid them ?

• Many a times entrepreneurs prefer listening to the suppliers. I have found they even decide their plant capcities also on the basis of suggestions passed by the supplier. It's really important to know that the supplier's business is selling Machinery & NOT water.
• Entrepreneurs work on a Dead-line based approach. Deadlines are necessary, but after you properly appoint suppliers. No compromise on that.
• Entrepreneurs start over day-dreaming the project & loose sight of the logical steps, like financial projections, getting hands-on experience, doing a proper market survey, starting a distributor business first etc. Somehow they don't love this "distributor" idea & they want that production unit only, though it sounds expensive. They do not see much happening in that.
• Entrepreneurs don't love selling much, as well as accounting. They worry too much about marketing, after starting the plant process. Instead they should create their market in advance.
• We do cover many of these aspects in our course & we charge fees ( Rs. 5,900 presently ). Instead of taking this course, they go on buying machinery worth 50-70 lakhs.

Question is : Why it happens ?

• Over popularity of phrases like "I don't waste time thinking, I just do it"
• The deadline based approach as I mentioned above
• Push by intermediary institutions who distribute loans, funds
• Getting caught by Govt's special schemes who offer incentives to entrepreneurs without being trained for business
• Govt too has trainings, however, these trainings have not been observed to be upto the mark.
• Getting trapped in the FREE trainings, the suppliers offer. However, they are mainly created to sell their stuff.

How can this be avoided ?

1. Believing firmly that, until my idea is not justified, validated through a Financial Document, I won't take a single step further. 
2. Once it's validated, I will try to get a hands-on experience if possible, may-be by payment or by working for free. ( I am trying to find a mid-way by creating a digital course for this purpose )
3. Get an idea as to who will be buying your stuff actually. Do some marketing through distribution.
4. Now, have a fresh look at your financials once more, make project plan. Check funding etc.

Alternate method :-

Learn through mistakes 😅 ( This is what the world is doing ). Expensive way.

Intention of marking Bottled Water as "Risky"

Recently fssai has marked Packaged Drinking Water as a "High-Risk" thing. Let's see the real meaning of this :-

• If you saw this on internet & media, just read it as another news.
• It's done after there has been removel of the "mandatory" tag by the BIS.
• Since there may be huge entrants in this category, it's here to retain the quality checks, nothing else.
• It's not at all a new step from govt towards improving health standards, as many of the news blogs, sites publicizing.
• Earlier the water was under compulsory certification from the BIS ( ISI mark ), which was much more stringent in quality monitoring compared to fssai. In fact, fssai themselves had made a directive to get an ISI license before applying for fssai.
• Though there were 2 licenses needed, there was a good division between them, BIS looked after the quality of water for safety towards consumption & fssai, used to check, the usage, commercialization, storefronts etc. It was a natural distinction between the 2 regulatories. Working not the best, however, were in-place.
• Now, since BIS is not compulsory, let's see how it affects the quality of bottled water.

Conclusion : There was no special "Annual Check" in BIS, as there were daily, weekly, monthly, 6-monthly & Yearly internal checks, with a built-in lab, which won't be there. In this place, there will be this "Annual Inspection" by the fssai. It's not any extra ordinary measure by the Govt.

Are we prepared for the future ?

While talking to various people concerning water business, about the Govt's decision to withdraw the "mandatory" tag for Packaged drinking Water, I am experiencing strange responses. Some are still not prepared to talk on the effects, waiting for final rules fssai will post. Some of them seem to be in denial mode like "there's no sufficient manpower with fssai". Some are shocked & complaining like they are victimised. No one seemed much happy & welcoming this decision.

I think, we as business owners are not taking future seriously enough. We should know, the economy is opening out, and with that, the license raaj is to go-out. This decision is a symbolic exexution of that. Reduced entry barriers. 

On the same lines, we should know that the PET is in danger. 90% of it is recycled, doesn't mean it's not dangerous. There is no alternative to PET for bottled water can't be the comfort zone. Suddenly there can be a law not to produce PET bottles anymore. Don't sail smooth & buy bigger Blowing Machines. Rather, try to find alternatives. If you are aware of the 17 SDG's , you will need to care about what I want to say.

The circumstances always give us indications, well in advance. As a business owner, do I look into it ?

Multinationals do.

Recently, I visited a Cafe at a Shell Petrol Pump. The cafe was good, however, not much crowded. It raised my curiosity to ask the manager as to what is the purpose of running this cafe inside the main city part ( not highway ).

Company is looking at next 20 years, he said. There won't be fuel like Diesel, Petrol in future. There will be charging stations, and they need time to get the vehicle charged. To spend the time during that, the cafes are purposed.

Thing to learn : Shell is learning & implementing decisions by listening to future. Can't I ?

Is it advisable to maintain separate business accounts for various purposes ?

I have seen many businessmen have separate accounts for 

• GST/Non-GST Transactions
• 100% Cash Transactions

It's very difficult to keep records this way. separate accounts, separate balance sheets. Confusions might happen and much more.

Then why businesses do it ?

The major reason may be insecurity of loosing business. They feel that their business will go down if the do not do that. 

To me :- 

This is not true. There are many ( most of the good businessmen ) who will deal with you only if you have a GST number. When we do not enter any non-GST, transaction, these are filtered out. Same applies to Cash transactions. If we decide, as a policy, to do 100% white transactions, those not doing it will get filtered out & we shall just focus on 100% white transactions. Only the professionals who respect taxation.

Where is the question of insecurity ? Those who don't respect this, were never my customers.

This happens too much in the bottled water ( indian ) context. By the way, the tax rate is 18% ( GST ) in India.

A Stich in Time, Saves Nine ....

This is a very popular proverb, which aptly applies to all ( many of them ) our dear water plant starters. 

Many a times, our training attendees become doubtful about their selection of already ordered machines. This happens after they attend the training. Our training is focused on helping the entrepreneur on creating a successful business, in which selection of machinery, appointing right suppliers, designing plant capacity, correctly knowing the resources is a very fundamental thing. 

This is not something great we do, just the very fundamental. And in this, we do not recommend any particular supplier/s. Yes, we do have a list of some of them with whom , either we have dealt in past, or they are better known, and don't need any introduction from our side. Again, we do not particularly recommend them only. It is a list, from whom you can source quotes, for comparing. Don't just rely on Youtube Videos or Indiamart, Alibaba. There are many, who don't care these media platforms, but may be there from ages.

😏Is it correct to re-check our ordered machinery ?

It's like going to another doctor for second opinion, when a surgery is already in process. There is hardly anything which one can do. So, better reassure whatever ordered without any doubt in mind. Trust your instinct and be with that. And also accept whatever is the outcome.

👉 Visit your Thought Journey 

However, it would be worthwhile to check as to why are you feeling doubtful. It might be because you would have decided to finish the machinery order to meet the set-up deadline. This action without first scrutinizing the vendors could be dangerous. Just check where is the origin of this doubt. At least you can protect yourself in future.

📌If you have still to appoint vendors ...

• Don't just compare by Prices
• Check truly how many plants/Machines the vendor has installed , verify, just don't go on the Client's list
• The vendor should have supplied at least 25 nos. of his machine/plants.
• You should verify that not in presence of the nendor, enquire like a 3rd party.
• Before all this, your plant capacity design should be proper. For this, check some of our videos dedicated to "Plant Cost". You can find one inside the Videos section inside our App. Also check other Free Content

Kindly go beyond & apply your own methods too. Thes are suggestions, nothing else.

😑 Still there are chances, that our decision goes wrong

This is not business, it's life. Series of unforeseen events & choices. So anything may go wrong even after that. The most you can do is to have a Plan - B ready. What can be the plan-B ? It will depend upon the situation; however, it will need some fresh/alternate source of Cash, availibility of capital, to execute the new decision, in time. Without getting into emotions. Time to improve emotional intelligence.

What Kind of "Education" a business owner needs ?

Business owner doesn't need to be an MBA, or an IIT graduate. All created courses are a collection of workable activities to perform, if you want to reduce your mechanical work. So, please get out of the trap of "I need to know more". 

We can learn, if we feel interested, curious. Again this "curiosity" is an expression of the creative, exploratory mind. If you decide not to invest it into none other than your priority things, you will save a lot of energy.

Point : Just get whatever you require. It may be free, very expensive, might need you to go out of your comfort zones, require extensive travel for just a little time; but fine. That's the thing you require.

Sometimes, even after doing this, you won't get what you wanted, still the journey continues. And precisely this is working for our Goal , Passion.

Typically, for a Bottled Water Plant Owner, what you might seek education in :-

1. Industry Knowledge Course : Check the one we have: You can check this on our website. At present, we are conducting these trainings online, on Zoom, Instructor-Led, Alternate month, English/Hindi.
2. Finance/Accounts Course :- The course which trains you on analysing the key parameters like PnL, Balance Sheet, Different Profits. 
3. Exhibitions in Industry : Worthwhile, best learning happens through exhibitions & conferences happening. Invest in Paid conferences.
4. Local Business Related Events : Check these in your area. Good place to learn

We run a Newsletter for Bottled Water Industry, through which we are publishing this information on weekly basis.

Make a deeper impact in first interaction !

While checking follow-up methods, at one of my clients, the sales person was sending Video of their machine to their prospect through whatsapp. There were many mistakes I observed in her method :-

# The video was on her desktop not named properly.

# It was in a random folder

I suggested a better method 

1. Decide what the video is about, create a play-list on their you-tube channel

2. Grab link of the video, as well as your channel

3. Create a whatsapp quick reply, insert the message as a standard template

4. Next time, don’t send the video via whatsapp, instead send it through a quick-reply, in seconds

What is the benefit of this method ?

• You save tremendous time
• The client ( or receiver ) also knows your full range
• As it uploads on youtube, you also get the SEO advantage
• It's a long-term link ( until you edit the decription )

But, sadly I noticed ....

The didn't know exactly, which was the operating Youtube Channel

They even didn't know the "whatsapp Quick messages" technique

I have observed, the business owners truly underestimate this creation of the real game-changer :- Making a deeper, convincing impression in the propsect's mind about their organization. 

What minimum ( and maximum ) you should have is :-

1. Tetimonials from your best clients on your website
2. Business owner's Link-in profile ( accurate if not attractive )
3. A Youtube Channel with proper play-lists
4. Links of the above 3 collaterals readily available through Whatsapp Quick-messages
5. A simple CRM system with a good channel-partner support ( No harm in trying out with a free CRM initially ) 

I didn't need to tell this sales-lady about actual sales follow-up, because she was well-trained in this, and believe me all these kinda business owners are good at that. What they do lack is :-

• A system to retain records ( They prefer excel - which is random ) : This is CRM
• An approach & respect towards descipline to follow it. 
• A habit to do it again & again ( though boring sometime ).

Winter & Water "Business"

Thirst reduces with temperature falling in the surroundings.Yes. Demand reduces. However, your business shouldn't get affected. I mean.... to a great extent. 

Because ....

If you have designed your customer segments properly, you should always have those regular buyers in your portfolio. Like ...

• Banks
• Institutions
• Corporates
• Govt Offices
• Caterers
• Restaurants & Cafes
• Hotels 

Use internal Data

Whatever you are : a distributor or a producer yourself, you need to have these all segments. For identifying your customer segments easily, the best tool is your billing software. Once in a month, you can have a conversation with your buyer and get to know from him exactly which segment he/she belongs to. 

Develop further communication

Use simple tools like Whatsapp Business to furher communicate with them. This regular communication will give you a steady & reliable ( season-free ) cash-flow. You should plan your financials considering the lowest feeding months, then winter won't be a problem, it will spare you time to look after other activities. And summer will be a boom.

Business Model Canvas : A simple technique

Rather than long text lines, is it easier to just look at a fewer images to understand things better ? Yes, and this is precisely how one should be able to look at his/her business. On a single sheet of paper. And this is the use of a Business Model Canvas. It is a simple 9-blocked Sheet ( Canvas ).

Do You need a "Turn-Key" contractor for your Water Plant ?

A Turn-key contractor is the one who buys all machinery on your behalf, co-ordinates with various agencies, and helps you get your project completed. For most of the machinery & equipment, he is the single billed entity, that's the advantage. Another is that you need to co-ordinate with just a single party. There are many advantages of working with a single turn-key contractor, and some challenges as well. 

Most of the projects have failed due to 2 major reasons :-

1. Launching Business without getting prior know-how : You can always get proper information which might be available on the internet for free of cost. Can try our water business app for this.
2. Wrong appointment of Turnkey contractor. Most of the times business owners fall in trap of aggressive follow-up by suppliers. They fail to check his/her experience in the field.

Do You need a Turn-key contractor basically ? :-

It will be very handy, but very tricky. And not complete. Meaning : You will still need other agencies.The turn-key contractors in Water Business are not available in every locale. Hence local agencies need to be your responsibility only. Machinery work at the most can be handed over.

Any alternative ?

Consultants can be an alternative, again choose wisely. And check our Mentoring Service. We provide this, through which we help you find these suppliers, agencies, at the same time you save a tremendous cost as well. 

ISI no more Mandatory, affected segment : 2 = Consumers

It's consumers who ultimately drink the bottled water. How will the decision to make ISI voluntary, affect this segment ?

The consumers are divided into 3 sub-segments :-

Those who directly buy it from a shop & drink :-

These are travellers mainly who buy bottles from open market. They just say/call it "Bisleri" and just know that it's bottled water. Most of them are not even aware that there is something called ISI. At the most, if they know or made aware that it's licensed through fssai, it should be sufficient for them. 

Those who buy it at a cafe/restaurant/hotel :-

These people too, don't know actually whether bottled water needs ISI ( majority of them ). They can also be made aware. Not much effect.

Those who don't buy, but drink it inside their work-place/event etc.

Unless the host is particular, there won't be any resistance from consumers. 

20 Ltr Jar buyers who consume water on monthly basis, mainly corporates/ institutions 

There is more chance that these consumers will insist for ISI ( at least 50% of them ). Logic : No😇

The "Cold-Jar" water consumers

There is no difference, and the suiers of such water are expected to negatively use this govt decision.

What Happens to the actual quality of water supplied in light of this decision ?

If the producers, thmselves are particular about providing the best water, ISI cost is negligible. And the quality will continue to be delivered In absence of the Mandatory tag , the quality will certainly detoriate. 

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.