India’s bottled water industry is hit by the Iran war, and prices for plastic bottles, caps, labels, and even cardboard boxes are climbing because crude oil has gotten more expensive. That’s a big deal, since oil is the backbone for the petrochemicals used in all this packaging, and with summer just around the corner, prime time for bottled water manufacturers, they are sounding the alarm, saying these higher costs are likely to hit consumers soon, right in their wallets.

Why Are Packaging Costs Rising for Bottled Water Makers?

• Polymer price surge: The cost of plastic bottles, which are made of polymers extracted from crude oil, has gone up by almost 50 percent, raising their price to almost Rs. 170 per kg.
• Caps becoming costlier: Bottle caps, which were once very cheap, are now selling for over Rs. 0.45 each, almost double their previous cost.
• Other packaging costs increasing: The cost of corrugated boxes, labels, adhesive tapes, etc., required for shipping bottled water is also increasing.
• Oil-related supply chain issues: The recent volatility in crude oil prices worldwide has led to a surge in the cost of polyethylene (PE) and polypropylene (PP), causing packaging costs to increase by over 20 percent in various industries, say industry experts.

Also Read: Hawaii’s Kīlauea Eruption Creates Spectacular 1,000-Foot Lava Fountain

How Is the Conflict Affecting India’s Bottled Water Market?

• Price increases from smaller manufacturers: About 2,000 smaller bottled water manufacturers have raised prices for distributors by ₹1 for each bottle, i.e., a 5% increase.
• Possible further increases: The prices may rise by a further 10% in the coming days, because the prices are still high.
• Low margins for consumers: The consumers are paying less than ₹20 for a one-liter bottle.
• Necessity for bottled water: India has a population of 1.4 billion people, and studies show that 70% of the groundwater is contaminated. Therefore, bottled water is a necessity for people.

Also Read: Fuel Prices Likely To Stabilize Within Two Months, Says John Catsimatidis

Are Bottled Water Prices About to Go Up?

According to industry leaders, many bottled water producers today are absorbing 40%-50% of the additional costs, but this will not last long. India’s bottled water industry is hit by the Iran war, and premium bottled mineral water brands have begun to raise prices based on distributor costs. As an example, some brands have raised distributor prices as much as 18% over the last few weeks.

The premium natural mineral water sector has also experienced rapid growth (approximately $400 million) over the last few years, making the total percentage of the premium natural mineral water segment of the total ice bottled water market approximately 8% compared to just 1% in 2021. With costs continuing to rise, it seems that these increased costs will eventually need to be passed down to the consumers.

Also Read: Climate Shift? Himachal Pradesh Records Severe Heatwave In Early March