WHITE SPACE OPPORTUNITIESWater Purification

Fruit & Vegetable Rinse

Sources of water :– Municipal 47% (In-home/ community taps, often limited duration)– Natural 47% (Rivers, lakes, ponds, tanks, wells, tubewells)

High level of contamination in Drinking water Recontamination of Municipal water during distribution High bacterial, coliform and parasitic counts Coliform counts also indicative of possible viral presence Borne out by outbreaks of enteric illnesses (gastroenteritis, typhoid,

Hepatitis A)

48% of all stomach related illnesses are water borne High awareness of poor water quality and health risks Economics of water treatment, convenience are issues

WATER PURIFICATIONContext- India

WATER PURIFICATIONTypes of Filtration Systems

Source : MR 4 metros% Treating water 45 Boiling 30 Filter 43 -of which systems 20

8%4%

24%20%

25%19%Cloth around tap

Passing water via cloth

Single candle Filter

Double candle filter

Zero-B

Aqua Guard

Aqua Guard Filter 10.3 Zero B Filter 8.8 Filters with candles 22.0

------- In home treatment 41.1 -------

Bottled Mineral Water 54.2-------

TOTAL 95.3

WATER PURIFICATIONCurrent Market Trends

Product Segment Market Size (NPS)£ Mln

Market : £ 95 Mln growing at 20% p.a., compared to Dishwash Market : £ 36 Mln

Large, rapidly growing market of water filters Most current devices suffer from

Inadequate efficacy High initial purchase price

Except “Aquaguard”, all other filter users replace the whole unit or cartridge once a year

Boiling and cloth filtration key proxy of the market

WATER PURIFICATIONMarket Summary

Address mass market with dependable quality solution Overcome purchase barrier with low purchase price offering Offer in-home solutions for both, On-tap and Natural water sources WHO participation / endorsement desirable

Core Product : Biocide-coated paper

Paper Biocide Applied Design

Whatman and/or Kimberly-Clark Unilever Possibly Raffo, UK

WATER PURIFICATIONHLL Strategy

Germkill : 100% bacteria, common pathogenic viruses Turbidity < 3 NTU Consumer price : Re.1 for a day's supply (15 lit.) Sensory cues to signal "exhausted" Wet-dry cycling about 3 times in 24 hours Hard Water range acceptability 2 FH to 40 FH Completely safe over usage of 70 years Simple to use Flow Rate superior to Candle filters Recontamination protection desirable, not essential

Desirable that product meets with WHO potable water standards

WATER PURIFICATIONTechnical Targets

World Potential : £ 860 Mln NPS (Category estimates)

NPS (£ Mln)

Urban Usership(%) 1 5 10 15 25 35

Consumption (Rs./Day/HH)

1 (Every day) 1.5 8 15 23 38 54

0.25 (Seasonal) 0.4 2 3.8 5.8 9.6 13.4

(Urban Households: 44.6 mln)

WATER PURIFICATIONPotential India - Urban Only

P&G Sept. 1999 acquisition of Recovery Engineering, Inc.

Manufacturer of PUR brand drinking water purification systems -- both in-home / outdoor : recreational, marine, military

Participation with WHO, CDC Atlanta, US Universities on water

Superior paper technology to Whatman likely

D/E Markets opportunity likely to be a major strategic focus

Could pre-empt / block our technology route

WATER PURIFICATION Competitive Scenario - P&G

Vivendi World leader, over 150 years experience (Generale des Eaux) Operating in 100 countries, $12b turnover in water treatment,

distribution and services April 1999: acquired US Filter (US Water No.1) and USF subsidiaries

- Memtec - expertise in microfiltration technology (especially relevant against waterborne parasites and pathogens)

- Culligan - strengths in bottled, industrial water- Kinetics - expertise in high purity piping infrastructure

Extension into in-home filters, solutions Declared E Market focus for LUP water solutions, especially India. Other

focus areas : Russia, China and Brazil

Competitor or potential partner?

WATER PURIFICATION Competitive Scenario - Vivendi

WATER PURIFICATIONBuilding Core Knowledge

Core Knowledge

H&A Study(In field)

Triggers and Barriers study

(Done)

MunicipalWater Sources

-MicrobialTurbidity,Hardness

pH etc (Done)

Natural Water Sources(Done)

Input Water Quality Consumer Understanding

Speed to market critical given P&G and Vivendi threat Technical efficacy (bacterial, common viruses, adequate flow rate) Convenient and cost-effective for consumer Suitable for tap and stored water Endorsement

Prototype testing Q2 ‘00

WATER PURIFICATION Key Success Factors

FRUIT AND VEGETABLE RINSE

Consumer Understanding Frequent purchase of fruit and vegetables; 3-7 times a week Monthly urban expenditure on fruits and vegetables Rs 600-800 p.m. High concern on contamination of fruit and vegetables from the seed

stage to entry in the kitchen Washing of fruit and vegetables prior to cooking : 2 times a day Current consumer controls

Visual selection Washing with water Some use warm water (+ salt)

FRUIT AND VEGETABLE RINSE

Ripening by artificial meansWorms

Dirt/dust Touched by hand Germs

Water PollutantsContamination intransportationDecay

Unhygienic storage Pesticides Fertilizers/ Urea

Key potential for concept /exploitation

ConcernLo Hi

Control

H i

Key Consumer ConcernsFRUIT AND VEGETABLE RINSE

Ripening by artificial means

Worms

Dirt/Dust

Touched by hands

Germs

Water Pollutants

Contamination in Transport

Decay

Worms

Unhygienic Storage Pesticides

Fertilisers / Urea

L o

FRUIT AND VEGETABLE RINSE Key Triggers

Area of Concern Key Trigger

Awareness of problem * Pesticides, Dirt* Germs - Poor Storage,

Flies* Veg. Decay / Shelf Life

Affordability * Rs 1 - 1.50 per day

Safety * Naturalness * Endorsement

* Post Rinsing by water

Visual Cleaning * Dirty water * Fresh F & V appearance

Lack of control * Poor water quality / ineffectiveness

Convenience of use * No scrubbing* Easy dissolution / solution feel* Ease of rinsing

Fruit orVegetable

Original Surface: Peel or Skin

Natural waxy layer

Pesticides & microbesduring growth/harvest

Wax or other material applied during transport or storage

Transient pesticide residues and microbes

•High levels of microbes (incl coliforms), pesticides found on Indian samples•Product efficacy : Fit >Peroxide>Hypochlorite>Water

FRUIT AND VEGETABLE RINSE Technical Issues

STM results Rs 4 Rs 1 Norm Trial % 38.8 63.6 37.0 Adoption % 3.4 19.2 13.9

High consumer concern / sensitivity to problem expressed at a rational level usage irregular / occasional

water proxy cooking kills germs price critical

Willingness to pay : Low monthly expenditure (Rs 1-1.5 per day, 2 uses

Vs Rs 4)

Fit Mix overall acceptability : Moderate- Comprehension / Advt. : Excellent- Pricing : Misfit- Sensorials : Need improvement

on dissolution, lather, slipperiness, naturals

FRUIT AND VEGETABLE RINSEFit : Mix Assessment

FRUIT AND VEGETABLE RINSE Potential India - Urban

NPS (£ Mln)

Urban Usership(%) 1 5 10 15 25

Consumption (Rs./Day/HH)

1.50 (Every day) 2.4 12 23 35 58

0.38 (Seasonal) 0.6 3 6 9 14.5

Household Expenditure Rs 50-60 per month

(Urban Households: 44.6 mln)

Water Purifier F & V RinseINDIAUrban Households (Mln) 44.6 44.6Adoption (%) 35 15Consumption / year (Rs per H/H) 360 360NPS (Mln)

- Rs 3650 1560- £ 54 23

GLOBAL (£ Mln) 860* 350

*: Category estimates; F&V global as per India to Global Water

New brand required for hygiene products that are consumed / ingested

SIZE OF NEW OPPORTUNITIES

Total global opportunity estd UK £ 1.2 bn

INGESTIBLE HYGIENE BRANDProposed Way Forward

Steering GroupBrand Key, Technology, Endorsements

IC IndiaWater

Purifier

IC IndonesiaFruit and Vegetable

Rinse

TRIGGERS TO WATER TREATMENT PRACTICES

Hygienic WaterLink to Source

SeasonalChanges

Children/family

PollutionLink to disease

DoctorsRecom-mend-ation

Skin/Hairdamage

Trigger to adoption

Visible signs of impurities

Link to urbanisation leading to pollution in air, sewage

Link todebilitatingdiseases

Rainy season- Consumerbelief of impurity

Promise of hygienic water -no loss of natural quality

Poor Source Contaminated,

Doctors recommendation trigger for change

BARRIERS TO WATER TREATMENT PRACTICES

OutdoorNo electricity

Lack of

germ threat

Source

No visible

dirt

Availability Change taste,Colour

Imm

unity

Storagesystem

Time consuming to maintainLack of

awareness of systems

Np place

to storewater

Clean = germ free

No Link to Chronic

Disease

Water

scarcity

Quantity

an issue

rather than

quality

Treatment changes

colour,tasteTakes away

Naturalgoodness

Quality linked to sourceMunicipal water = treated

No control on water quality outdoorsWhy worry indoors

Can't use sophisticated

systems Electricity,

No running

water

Price

Value for money -

not clearExtra cost -extra effort

Adults are immuneChildren need

PROJECT CINCINNATI - INDIAFit - STM

Two panels - same product, Philippines advertising Panel 1 : Price Rs 1 per 6 gm sachet Panel 2 : Philippines price - Rs 4 per sachet

Target Respondent : Housewives, 18-55 years, SEC A, B1 (top 30% h/holds)

Action Standards Project to break even at end of 3 years

(assuming 35% RGM) Panel 1 : 135 T (Yr 1) Panel 2 : 34 T (Yr 1)

50% adoption amongst triers

PROJECT CINCINNATI - INDIAFIT - Quantitative Test

Results Panel 1(Rs 1) Panel 2 (Rs 4)Norm

Trial (%) 63.6 38.8 37Adoption (%) 19.2 3.4 13.9Conversion (%) 30 8.7 36Volume predicted (Yr 1) : 37 T 5 T

required (Yr 1) : 135 T 34 T

Acceptable price range (Rs) 1.00-1.90 1.55-3.25

Mix failing on Adoption / Conversion and Volume action standardsSignificant price elasticity

Key Pillars ImplicationsComplete Assurance EndorsementRemoval No taste alterationsSafety Natural - Ingredients, ColourConvenience Simple and fast to useAffordable Relevant pricing / range

Appropriate Sensorials

For a healthier, more fulfilling life

Key Pillars

INGESTIBLE HYGIENE