TATA to acquire Chauhan Brothers’ Bisleri for 7000 crores

Nothing is perennial and nothing is permanent. Just because a brand dominates your day-to-day life does not mean that it can’t change its features. More often than not these brands do and disappear in such a way that we do not even notice. Then there are brands like Bisleri. Now, your bottled water will be taken care of by TATA.

Bisleri is going to be TATA

According to a report by The Economic Times, TATA Consumer Products Limited (TCPL) will acquire Bisleri. The deal has been finalised and Bisleri owners will get Rs 6,000-Rs 7,000 crores for divestment. For the initial two years, management will not change and will assist TCPL in the transition. The main reason behind this decision by Ramesh Chauhan, Bisleri Chairman is that his daughter Jayanti Chauhan is not willing to carry on with the business.

When Chauhan floated the idea in the market, lots of companies jumped in to buy the brand. These include Reliance Retail, Nestle, Danone and TATA. What pushed Chauhan to tilt towards TATA is the values enshrined in the company.

Chauhan said, “I like the Tata culture of values and integrity and hence made up my mind despite the aggression shown by other interested buyers.” Chauhan has also refused to retain a minority share in the company.

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Initially, Bisleri was not a water bottle brand

It won’t be wrong to term Bisleri a trend setter in the bottled water segment. Bisleri is actually of Italian origin and was established in 1965 by inventor and chemist Felice Bisleri. He brought the brand to India as well in the same year. Initially, it was a high end product since only luxury hotels and some Mumbai restaurants used to sell it.

At that time, India was under an extreme socialist influence which meant that luxurious places were scarce. Resultantly, Bisleri failed to grab the market and its founder exited from India in 1969. It was sold to Jayantilal Chauhan of Parle group for 4 lakh, a big sum at that time. Ramesh Chauhan, Jayantilal’s son who was only 28 years old, started to handle the operations. According to Ramesh, the Chauhans bought it because of the popularity of its Soda in high-end hotels.

The Chauhans expanded the company’s reach by launching new products. In 1976, it launched Maaza, a fruit drink. By sheer coincidence, Coca-Cola shut down India operations which allowed Bisleri to launch carbonated drinks. Bisleri launched Thumbs Up, lemon flavoured drink Limca, orange flavoured drink Gold Spot, Citra and RimZim. But Coca-Cola did come back after 1991 LPG reforms and in 1993, it bought Bisleri’s aforementioned products for Rs 400 crore. Coca-Cola also got Ramesh to sign a clause barring him from entering the Carbonated drinks market for the next 15 years.

Also Read: Who is Jayanti Chauhan? Once managed Bisleri, Why She refused to take over the business

First mover advantage

The non-compete clause came as a blessing in disguise for Ramesh. People across India were seeing wealth creation and the anti-communicable disease drive was taken on a war footing by the governments. There were lots of reports in regional newspapers about the contamination of groundwater, especially in wells and handpumps. It was the perfect opportunity to launch a bottled water segment.

However, it was not easy. The biggest hurdle was transportation costs. Water bottles occupy space, but are low-priced products, so the transporters were not ready to carry them. Bisleri itself started transporting these bottles. It gained first mover advantage and the product gained momentum. Within no time Bisleri bottles were being seen at airports, railway stations, bus Stands and every other imaginable public place. Watching its success, other competitors like Coca-Cola (Kinley), PepsiCo (Aquafina), Kingfisher, and Nestle Also jumped in. To add insult to injury, various others also jumped in with similar names like Bilseri, Belsri, Brislei. Despite that, Bisleri occupies 32 per cent of the organised bottled water segment of the Rs 5,250 crore market.

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Expansion in pipeline

It is here that the chances of expansion lie for the TATA group. The market share quoted above is only 35 per cent of the bottled water market in India. It is organised, The actual numbers for the market of organised and unorganised bottled water is worth over Rs 15,000 crore in India.

TATA group wanted Bisleri to increase its market share by 70 per cent. It is not a bad idea since new business establishments are getting established at rapid rates in the country. Due to this reason, the biggest growth opportunity lies in the 20-litre bottled water segment. Apart from that, if TATA group conjures up its FMCG experience and launches new products without changing the nature of the Bisleri company, it would be in line with Chauhan’s dream.