The landscape of reusable insulated flasks and containers is on the verge of transformation, as the Ministry of Commerce and Industry prepares to enforce a mandatory Bureau of Indian Standards (BIS) certification starting June '24. This directive is poised to reshape the industry dynamics, impacting both large incumbents and smaller players alike.
Come June '24, retail and e-commerce platforms may witness a shift in the availability of copper, stainless steel, and aluminium water bottles, as compliance with BIS standards becomes imperative. Presently, a significant portion of these products is imported, with minimal local manufacturing infrastructure in place. This impending mandate necessitates a strategic re-evaluation for industry leaders like Cello, Milton, and Prestige, prompting considerations of either investing in local production or bearing additional import costs.
Accelerated formalisation and competitive advantage
The enforcement of BIS standards is anticipated to catalyse sector formalization, fostering a competitive landscape that favours larger, more established players. This regulatory framework aims to ensure product quality and consumer safety, potentially tilting the competitive scales in favor of compliant enterprises.
“As of now, most large players including the listed Cello import such water bottles; there are almost no facilities in India to manufacture these. Companies may need to pay to import or set up in India to source locally,” stated ICICI Securities said in a report. Cello, Milton and Prestige are among the large players making these products.
“The BIS order regarding compulsory use of the standard marks may lead to accelerated sector formalisation and create competitive advantages for larger and ,” the ICICI report underlined.
For companies like Cello World, financial ramifications loom as the deadline approaches. With substantial net profits and revenue at stake, the necessity to adapt to the evolving regulatory landscape is underscored. Smaller and unorganized players face heightened vulnerability, with limited resources to navigate the transition seamlessly.
“For smaller and unorganised players, which constitute close to 30 per cent of the industry, the impact will be a lot more.. We are hoping for an extension but that seems unlikely now,” commented an executive at a mid-sized manufacturing brand of insulated flasks and bottles.
As the June '24 deadline draws near, the insulated flask and bottle industry stand at a crossroads, poised for transformation. While challenges lie ahead, proactive adaptation to BIS standards presents an opportunity for industry stakeholders to reaffirm their commitment to quality and compliance.
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