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On the back of a revamped retail-first business model post-pandemic, Ahmedabad-based premium packaged drinking water brand Clear Pani is now expecting to treble its turnover to Rs 300 crore by next fiscal year.
The target follows the firm’s confidence in doubling its turnover in the current financial year 2021-22 to over Rs 110 crore, from Rs 45 crore last year.
Having pioneered in a highly competitive market like packaged water with innovations like square water bottles, red colour branding and biodegradable bottles that use 40 per cent less plastic, Clear Pani is now consciously moving from hotels, restaurants, catering and airlines (horeca) first business model to retail first.
Known for cracking enterprise sales for premium packaged water bottles including Jet Airways, Air India, Air Asia, Holiday Inn, Marriott and Hilton, among others, Clear Pani is now looking to bank upon retail distribution to become a pan-India brand.
“The Covid-19 pandemic in 2020 was a turning point for our business which was 90 per cent dependent on horeca and only 10 per cent on retail. As a result, our business went to zero whereas our branded competitors were hit with only 20-25 per cent of sales. That is when we decided to balance our business segmentation to retail first,” said Nayan Shah, founder and chief executive officer of Clear Pani.
Contrary to its branded competitors, another strategy that Clear Pani has adopted based on its learning from the pandemic is to lean on contracted packers for bulk of its capacity. Even as it is on its way to clock three million bottles a day from current 2.5 million, Clear Pani is adding at least two co-packers a month with its bottle capacity being met today by plants run by 22 co-packers and just two company owned plants.
“This way, we have also kept our need for fundraising at bare minimum since there is hardly any capital expenditure and low working capital requirements. However, going forward as we grow our turnover and retail reach, we may look at raising funds to fuel future expansion,” said Shah.
According to Shah, the packaged water market offers immense scope for branded players to grow pan-India since hardly 12-15 per cent of the Rs 40000 crore market is branded and organised, with the rest being unorganised.
“There are also very few truly pan-India packaged water brands. We are already doing well in western, southern and northern markets. We are now looking to have a few more plants of our own even as we expand our co-packing and distribution network, including in the eastern region,” said Shah.
The company is looking to expand its current network of 52000 retail stores and 1186 distributors to touch 150,000 stores before launching additional products which are currently in the pipeline.
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