The Oberoi group-promoted East India Hotels (EIH) will soon serve its own brand of spring water in its hotels and resorts, speciality restaurants, waiting lounges and in-flight services.
The hotel giant is looking at having an exclusive arrangement with Pune-based Mulshi Springs -- a company that bottles natural spring water. The brand will be called Oberoi Spring Water and a formal announcement is expected soon.
When contacted, Naveen Luthra, managing director of Mulshi Springs Natural Spring Water, said, "Our company is in talks with one of India's biggest hotel chains which has shown interest in distributing our product under their own brand and we hope to finalise the deal soon."
However, a senior official from the company confirmed that the hotel chain is none other than the Oberoi. The packaged spring water will be available in 200 ml, 500 ml, 1 litre and 1.5 litre pet bottles priced between Rs 50 and Rs 200. "Water will be sourced from a rain forest near the Sahara Amby Valley located near Pune. A new facility has been set up in the vicinity to facilitate packaging of water," added the official. However, when contacted, EIH said the news is incorrect.
The Oberoi group operates in India, Egypt, Mauritius, Indonesia and Saudi Arabia, with 30 properties under the brands Oberoi Hotels & Resorts and Trident. It plans to take the total number of properties to 40 in the next three-and-a-half years. It has a room capacity of around 4,400 and the new additions would take the figure to 6,700 during the period.
"There is a huge demand for natural spring water among international and domestic tourists. With EIH planning to expand its network of hotels, this arrangement will be beneficial for the company," said a source familiar with the development. EIH, however, does not plan to venture into retailing of spring water in the open market. According to sources, necessary approvals from the Water Quality Association -- a body under the US-based Food and Drug Administration -- are in place for this venture. EIH is also said to have got its brand and logo registered.
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"Having an in-house water brand adds to the hotel chain's image and brand value. Increasingly, players in the travel and tourism business are looking at having a similar arrangement. There are other hotels too which are said to be in talks with players in the packaged drinking water business," said a Mumbai-based analyst.
The packaged drinking water market in India is worth Rs 1,500 crore (Rs 15 billion) and is growing at a compounded annual growth rate of 25 per cent. Of this, natural mineral water market is just Rs 100 crore (Rs 1 billion).
In the retail segment, Coca-Cola's Kinley and PepsiCo's Aquafina together dominate about a quarter of the mass bottled water market. Bisleri, owned by Ramesh Chauhan, accounts for 16 per cent of the total sales. More than 50 per cent of the packaged drinking water market is dominated by 200 odd water brands that sell in regional pockets.
Taj Hotels eyes top luxury brand slot in five years
The Taj Hotels Resorts and Palaces, which is part of the Tata Group, has lined up expansion plans to become one of the top global luxury brands. The hospitality major, which has more than 60 hotels and resorts in the country and 16 in foreign locations, said it will double the number in the next five years.
"Taj will have multiple plans and multiple brands for growth. We would be doubling the number of hotels in the next five-year period," said R Commissariat, director (marketing).
