India’s $5bn packaged water industry is being affected by the ongoing conflict in Iran, with manufacturers reporting increased costs for key packaging materials ahead of the country’s peak summer season, reported Reuters.
The escalation in oil prices due to the war has raised expenses for items such as plastic bottles, caps, labels, and cardboard boxes.
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Industry sources say around 2,000 smaller bottled water producers have raised their prices to distributors by Rs1 per bottle, a 5% increase, with further hikes of up to 10% expected soon, according to the Federation of All India Packaged Drinking Water Manufacturers’ Association.
The federation’s secretary general Apurva Doshi said: “There is chaos and within the next 4-5 days, this will start impacting customer prices.”
Currently, a one-litre bottle is generally sold to consumers for Rs20 (around $0.20).
Larger businesses are reportedly absorbing the higher costs for now, but smaller firms have begun passing them along to resellers.
Industry correspondence and data show that the price of polymers used in bottle production has climbed by 50% to Rs170 per kilogram.
The cost of bottle caps has more than doubled to Rs0.45 each.
Other essentials, including corrugated boxes, labels, and adhesive tape, have also become more expensive.
Clean drinking water remains a concern in India, where research indicates that 70% of groundwater is contaminated. This has made bottled water a regular purchase for the majority of the country’s population of 1.4 billion people.
Companies competing for market share include Aquafina (by Pepsi), Bisleri, Kinley (owned by Coca-Cola), Reliance, and Tata.
These companies did not respond to requests for comment from Reuters.
Within this sector, natural mineral water represents a $400m business and is gaining popularity among wealthier consumers.
Clear Premium Water, a brand under Energy Beverages in India, informed its distributors about what it described as an “unprecedented and continuous surge” in the cost of raw materials used for packaging and production.
As summer approaches and demand increases, it remains to be seen whether retail prices will follow the upward trend observed at earlier stages in the supply chain.
