Water Conditioning & Purification Magazine

People

Friday, October 15th, 2004

Smith Water announces executive appointments
A.O. Smith Water Products Company, a supplier of residential and commercial water heating equipment, has appointed three executive officers. James Grasha was named to the newly created position of vice president and general manager of the company’s Water Systems business; Kevin Wheeler has been named vice president-international and David Warren has been promoted to managing director of the company plant in Veldhoven, Netherlands.

AFS names new executive manager
Suzanne Sower has been picked to lead the American Filtration and Separations Society as its newest executive manager. Sower will oversee the relocation of the organization’s headquarters from Houston, Texas, to Minneapolis, Minn. AFS is the world’s largest filtration society and organizes a variety of advanced technical conferences and expositions on the subject of filtration and separations.

Hydro Systems adds to sales staff
Hydro Systems International, of Plantsville, Conn., announces the addition of Daniel Kahn to its staff of sales and marketing professionals. Kahn, a recent graduate of Quinnipiac University with a degree in International Business, will focus his efforts on expanding business in the growing Latin American water treatment market. Founded in 1990, Hydro Systems International is a leader in the design and development of innovative fluid filtration products.

Hague technical advisor
Hague Quality Water International has appointed Eric Parrish to its technical advisor position in the Dealer Services department. Parrish has worked with Hague for nine years, previously in charge of testing tools, inspecting incoming materials and pressure testing tanks in the Quality Control department.

Calgon promotes new senior VP
Calgon Carbon Corporation has promoted Michael J. Mocniak to senior vice president, general counsel and secretary. Mocniak, the chief legal officer for Calgon Carbon worldwide, is the former vice president, general counsel and secretary of Fansteel Inc., a public company engaged in metal and aerospace component fabrication.

Moore to manage ART
Arsenic Removal Technologies Inc., a subsidiary of HydroFlo Inc., has begun building its professional team with the addition of George Moore III as chief operations officer. Moore will be responsible for conducting research and development programs for additional applications of the technology, developing a sales and marketing program, implementing cost control programs and managing the day to day operations of the company.

Water Inc. names new VP
Rick Tarantino is the newest executive vice president of Water Inc. The company made the announcement Aug. 1, promoting Tarantino who has been with the company since 1996. Water Inc. is a distributor of drinking water systems, including Everpure®, EverHot®, EverCold® and EverBrew®.

EIP appoints senior environmental scientist
EIP Associates has appointed Sabrina Cook as senior environmental scientist in the company’s Water Resources Group. Cook will serve as the firm’s senior water quality, hydrology and soil scientist on water quality assessments, hydrologic studies and permitting projects.


A True Friend of the Industry Robert E. Morley July 2, 1925 – June 16, 2004

Robert E. Morley, owner of Morley Water Improvement Systems of Redlands, Calif., died at his home after a long illness. He was 78.

Morley was a longtime supporter of the water quality improvement industry at the local, state and national levels. A former member of the Pacific Water Quality Association Board of Directors, he was honored with numerous awards for his work, including a Lifetime Achievement Award bestowed by the Water Quality Association.

“Bob was an enthusiastic supporter of the PWQA,” said Chris Layton, “He was quite content to just quietly go about aiding the association in ways that would help it to realize the industry goals. His example and his commitment will be sorely missed.”

Morley began his work in the water industry in 1951 when he began working for Culligan USA at their headquarters in Northbrook, Ill. He met his wife, Joy, at the company and the two were married in 1954. The couple moved to Redlands in 1972 and purchased their own water conditioning business seven years later. The Morleys and their son, Michael, have operated Morley Water Improvement Systems since that time.

“I shall miss seeing him at Joy’s side, with his wonderful smile,” said Publicom President Sharon Peterson, who called Morley a “true friend of the industry.”

Morley is survived, in addition to his wife and son, by two daughters, Lisa Ondra of Pleasanton, Calif., and Beth Finch of Kent, Wash., and six grandchildren.

Memorial donations may be made to the American Lung Association.

Ask the Expert

Friday, October 15th, 2004

Question: How much ozone is necessary to kill bacteria in a 500 gallon hot tub? How much is needed for a 20,000 gallon pool? We currently sell and install corona discharge ozone units on Hot Springs portable spas. I also need to know, can there be too much ozone generated? What is a safe level in a small environment such as a hot tub?

Jobi D. O’Neill
Buyer, Baker Pool & Spa, Inc.
314/965-8280 ext. 115; email jobio@bakerpool.com

Answer: Ken Mouw, fisherman extraordinaire and president of Ozotech, Inc. of Yreka, Calif., kindly offered his expertise on this question. With regard to determining how much ozone is necessary to kill bacteria in a 500-gallon hot tub, he began by noting that his answer is based on a Hot Spring (inquirer’s reference) spa line that utilizes a dedicated 24/7 recirculation pump for the injection of ozone. Numerous other spa manufacturers and older type spas do not, or have not, incorporated a dedicated pump in their configuration, thus the rules of ozone injection and sizing may not directly apply in the below response.

“In the interest of bather safety and keeping cost to a minimum, spas are most often dosed very lightly with ozone. Effective ozone treatment is realized by the cumulative effects of continuous, low-level application,” Mouw explains. In most modern spas, average ozone generator output is 0.05—0.15 grams of ozone per hour with gas concentration by weight in the 0.1 g/m3 region.

Mouw cautioned that ozone activity in a spa should be confined to the piping of the circulating filtration line. It is a mistake to attempt to carry ozone into the main body of water, both in terms of bather safety and ozone efficacy. Likewise, it is a mistake to attempt to inject ozone into the main body of water, as would be the case if using one of the air or water jets or a bubble diffuser in the lower cavity of the spa.

While ozone certainly destroys bacteria in a spa, its time proven method of application does not follow the established rules for ozone disinfection, which require that ozone residual levels be measured after contact time.

To determine ozone requirements of a swimming pool, Mouw said it is necessary to understand the role that ozone can play and the benefits that the consumer is expecting to realize.

Ozone in a swimming pool has the ability to limit the formation of THM’s and HAA’s that are created when chlorine oxidizes organic molecules. This serves to improve the overall bathing experience through reduction of the chlorine odor, as well as dry skin and red eyes. Additional benefits include sparkling clear pool water made possible by the ability of ozone to act as a micro-flocculent, coagulating small particles into larger particles that can be removed by the filter. Ozone cannot be the sole sanitizer, however. Chlorine or bromine must be added to maintain a residual disinfectant in the pool body, because ozone is applied in such a manner that it is totally consumed prior to the water re-entering the pool.

Determining the required output of the ozone generator is usually tricky, partly because of the disparity in the approach of different ozone suppliers, as well as the sometimes difficult task of quantifying to the consumer the advantages/disadvantages of each method.

The designer is faced with the decision to treat the entire volume of the filter line flow, or to split the flow and inject ozone into a reduced volume of the filter flow, usually 25-50 percent, called a slipstream or sidestream. It is a given that the more water being ozonated, the more expensive the system. So, what is the correct approach?

The only way to come up with an answer is to educate the customer regarding the benefits that ozone can provide, Mouw instructed, and how those benefits are realized. For example, one might try reducing the formation of THM’s and HAA’s, and thereby limiting the odor, dry skin and red eyes experienced by bathers. Will these benefits still be possible in the reduced flow slipstream method? Certainly, but to a reduced degree, he stated. Assuming a six hour pool turnover time, each “packet” of water (possibly containing an organic molecule) is subject to contact by ozone once every six hours in a full flow system, and only once every 24 hours in a 25-percent slipstream. It is therefore apparent that treating the full flow will provide the maximum benefit.

“Given a full flow Din Standard approach, you would need approximately 15.1 g/hr of ozone for a 20,000 gallon pool. With reduced benefits fully discussed and understood by the consumer and a 25 percent slip-stream approach as the agreed upon methodology, approximately 3.8 g/hr of ozone would be utilized,” Mouw surmised.

Can there be too much ozone generated? And what is a safe level in a small environment such as a hot tub?

As to the reader’s query about whether there can be too much ozone generated, Mouw said the short answer is yes. “It is possible to generate too much ozone for a given application, although due to economic reasons, it is more likely that ozone is misapplied. Generally speaking, if the ozone system allows residual ozone to enter the main body of water, be it a pool or a spa, exposure of the bathers to ozone gas is possible, “ he explained.

Following this line of reasoning, if ozone gas exposure is possible, it is also possible for a person to be exposed to a level that exceeds regulatory limits (OSHA 0.1ppmv TWA 8-hours; 0.3ppmv STEL).

Therefore, engineering controls are used to prevent ozone from entering the occupied space. First, ozone is applied in a manner which will cause it to be consumed prior to its being able to enter the main water body. In the case of a spa, this means injecting the ozone in the circulating filter line and allowing it to do its job before the water re-enters the spa. “The relatively low ozone levels applied, the high water temperatures, and the ozone demand all contribute to giving ozone a very short life,” Mouw noted.

Secondly, devices are available to destroy excess ozone, in either the dissolved phase or gas phase. In the case of swimming pools, in which relatively high ozone levels are applied to the filter flow and water temperatures are much lower, ozone is consumed during the time it is detained in a contact tank following the ozone injection point, with any residual ozone destroyed by passing through a GAC filter or UV unit prior to reentering the pool.

Those with additional ozone questions (or who love bass fishing) are encouraged to contact Kenneth W. Mouw: Ozotech, Inc, 2401 E. Oberlin Road, Yreka, Calif. 96097, telephone (530) 842 4189, fax (530) 842 3238 or email at ozotech@ozotech.com

Global Spotlight

Friday, October 15th, 2004

HydroFlo retains Spelman Research
HydroFlo Inc., has retained investment research firm Spelman Research Ltd., to provide and publish independent reports on the company’s financial outlook for potential investors and shareholders. 💧

Perchlorate removal in Altadena
The Lincoln Avenue Water Company has successfully started its 2,000 gpm perchlorate removal system at two wells in Altadena, Calif. 💧

Everpure relocation
Everpure Inc., relocated their headquarters from Northbook, Ill., to Hanover Park, Ill., in July. The company’s new address is 1040 Muirfield Drive, Hanover Park, Ill., and their new phone number is (630) 307-3000. For more information, visit www.everpure.com 💧

Pure H2O to test POU system for hospitals
Pure H2O Bio-Technologies Inc., and USBioSystems Inc., have reached an agreement for PHBT to oversee testing of its newly engineered potable water point-of-use disinfection systems for hospital, residential and commercial use. 💧

Arrowhead earns LEED Silver Rating from USGBC
Arrowhead Mountain Spring Water Company has been awarded the Silver Rating from the Leadership in Energy & Environment Design program through United States Green Building Council. 💧

WEFPress water quality books
The Water Environment Federation has launched a new business alliance with publishers McGraw-Hill Professional. WEFPress will publish about a dozen water quality books, including manuals of practice, each year. 💧

Wichita to use ozone in Cheney Reservoir
Wichita, Kan., is spending $7.5 million to ozonate water in the Cheney Reservoir to improve odor and taste. The reservoir supplies about 60 percent of the city’s drinking water. 💧

Lake Dunlap water treatment expansion
To provide potable water in line with the Safe Drinking Water Act, the Canyon Regional Water Authority is expanding their Lake Dunlap water treatment plant with ultrafiltration technology from Koch Membrane Systems. The system includes 48-inch UF cartridges to provide 11 mgd ultrafiltration. 💧

Chinese bottled water below standards
Spot checks of more than 200 brands of bottled water produced in China reveal that only 30 percent, or 87 brands, meet the country’s national drinking water standards, according to the Provincial Administration of Industry and Commerce. 💧

Whirlpool offering new line of drinking water products
Whirlpool Corp., is now offering its own line of water softeners, water filtration products and coolers. The products are available exclusively at Lowe’s. 💧

Channell acquires Bushman Tanks
Channell Commercial Corporate has acquired 75 percent of Bushman Tanks, Australia’s largest manufacturer of rotational molded plastic tanks. ANZ Private Equity acquired the remaining 25 percent. 💧


Global bottled water report
Research & Markets is now offering the Global Bottled Water Report to its repertoire of market analyses available at www.researchandmarkets.com. The company cites the increasing consumer demand for bottled water and the growing influence of global companies that sell bottled water as key factors in its decision to issue the report. Included within the Global Bottled Water Report 2004 are overviews of the market in 75 countries, analysis of small pack versus bulk water markets and surveys of historical market trends and forecasts through 2008.
 
Middle East

Tyco nets $35 million contract with UAE
Tyco Water, the industrial division of Tyco Engineered Products and Services, has netted a $35 million (U.S.) contract with United Arab Emirates to provide 13,000 steel water pipes for a desalination project in Abu Dhabi. The 12-meter pipes will be used to transport desalinated water from the capital to the eastern region of the country.

Research & Markets expands Israel offering
Research & Markets has announced the addition of a report on bottled water coolers and point-of-use in Israel in 2003 to their online offerings. Both industries have flourished in Israel since they were introduced in the late 1980s and the new R&M report outlines the growing competition between the two industries in the region. The report includes a full market commentary, trends, company profiles and a variety of other information. For more information, visit www.research andmarkets.com/reports.c3461

Africa

PuR sachets sent to Sudanese refugees
AmeriCares, in conjunction with Procter & Gamble’s Health Sciences Institute, has delivered one million PuR® water purification packets to Sudanese refugees in Chad. Water has been difficult to find and is often brackish throughout the region since more than 150,000 refugees fled Sudan for northern Chad in the past three months. The PuR systems are capable of purifying 10 million liters of water, according to AmeriCares President Curt Welling.

Counterfeit bottled water
Nairobi Trade and Industry Minister Mukhisa Kituyi has warned that bottled water is being counterfeited throughout the region and is unsafe for consumption. He said that the untreated counterfeit bottled water is being sold in packages of reputable companies that are known to offer safe quality products. The deception is compounding the risk for harm from the counterfeits because consumers would otherwise boil their water before drinking it. Kituyi was addressing a workshop on counterfeits and substandard goods at the time of the announcement. He said counterfeits and substandard goods have also dominated the field of medicine, motor vehicle components and lubricants, foodstuffs, seeds and chemicals.

Cape Town water supply cuts
The South Africa Department of Water Affairs and Forestry plans to cut water supplies to Cape Town and areas of the Western Cape from 10 to 30 percent at the first of October. The move will be accompanied by sharp tariffs for residential, commercial and industrial water use. The authority cites the 10-year drought as the motivation for the drastic cuts, as well as the dams in the Western Cape’s water supply system at only 41 percent capacity, an all time low for the water system now headed into its driest season of the year.

Asia

Safety of Tajik tap water still unknown
Despite admitting that high levels of chlorine are being pumped into the water supply to avoid an outbreak of typhoid, authorities in Dushanbe, Tajiki-stan are no longer delivering clean drinking water to local residents and advising they simply boil their tap water before consuming. Water tests have confirmed the presence of viruses and water turbidity following flooding of a the Varzob River and local experts estimate that about 90 colon bacillus (intestinal viruses) are present in each liter of water coming out of Dushanbe taps.

GE posts strong 2nd quarter sales
GE Infrastructure Water and Processes Technologies, an international supplier of water, wastewater and process systems solution reported a 12 percent increase in its second quarter sales over the same period last year. Company representatives credit the growth to services outside the United States, specifically China, where there is excitement around the building of infrastructure to support the Beijing Olympics in 2008.

Canada

Saint John fined over water reports
Officials from the city of Saint John were fined $7,500 (Canadian) in August after failing to write reports on water quality problems in the city that led to a boil order for 40,000 people. St. John was charged by New Brunswick authorities for failing to follow reporting rules under the Clean Environment Act after E. coli was discovered in the system in April.

CodeLine receives product certification
The NSF has approved CodeLine, a product of Pentair Water Treatment, for NSF/ANSI Standard 61 certification, making it the first fiberglass membrane housing to meet international standards for mitigating chemical contaminants and impurities indirectly imparted to drinking water products.  Unlike material certification through NSF 61, product certification guarantees that the products comply with Canadian and United States plumbing codes for water supply products, as well as other international standards.

United States

Avoiding rate shock, a new AWWA report
The American Water Works Association has released a report providing utilities insights into gaining community support for necessary improvements to drinking water infrastructure and successfully communicating their needs to elected leaders and consumers. Avoiding Rate Shock: Making The Case For Water Rates outlines how consumers often do not recognize the immense value of tap water and that reality makes setting reasonable water rates difficult. Additional information regarding the report can be found at www.awwa.org

POU cooler recall
The United States Consumer Product Safety Commission has issued a voluntary recall of 145,000 hot/cold bottled water coolers from Elkay Manufacturing Company of Oak Brook, Ill. The coolers are 115 volt POU coolers with both hot and cold water faucets. According to the commission, there have been no reports of injury but at least 14 incidents of overheating that present a significant fire hazard. Additional information on the recall can be found at Elkay’s recall website, www.coolerfix.com.

Air operation pump and test standards
The Hydraulic Institute has added two new standards to its ANSI/HI Pump Standards for 2004. The first new standard is for air operated pumps, including positive displacement reciprocating pumps for general liquid transfer. The second applies to the test of air operated diaphragm and bellows pumps and provides uniform procedures for mechanical and other pump performance tests. A master index and reference guide to the standards is available online at www.pumps.org

Maine group seeks initiative for bottled water
Residents of Maine are seeking a ballot initiative that would require compensation from companies that bottle and sell water from the state. Under the proposal, a $.20 per gallon tax would be taken from the companies and used to develop small business programs in Maine. While estimates show the extraction fee could produce $80 to $100 million each year in revenue, bottlers in the state say it could be detrimental to their business.

Pentair completes WICOR acquisition
Pentair Inc., has completed its $850 million acquisition of WICOR Industries, a unit of Wisconsin Energy Corporation. Known simply as Pentair Water, the company manufactures water system, filtration and pool equipment products under the Sta-Rite, SHURflow and Hypro brands, and is now a $2 billion operation with about 8,000 employees worldwide. According to Pentair chairman and CEO Randall Hogan, the transaction doubles Pentair’s annual water revenues and will lead to accelerated development of new products.

AWWA responds to water supply concerns
The American Water Works Association has added a new seminar to its training calendar. Watershed Protection: Planning for the Future of Source Water, is designed to help utilities ensure their future water supply by planning for source water protection. The seminar is ideal for utility managers, engineers, consultants and others interested in creating, funding and implementing source water protection plans. John Wither-spoon, a member of the AWWA South Water Protection Committee, will host the seminar that is slated for Dec. 2 and 3 in Winnipeg, Canada. For more information, call (800) 926-7337

WQA releases marketing survey
The Water Quality Association has released an extensive consumer survey mapping a variety of market factors and trends. The 2004 WQA Consumer Marketing Survey includes details on consumer opinions of home drinking water units, bottled water delivery and drinking water from the tap, as well as who is more likely to buy a water softener and comprehensive buyer demographic information.

United Kingdom

Despite alarm, no Prozac in UK drinking water
The Drinking Water Inspectorate has announced that despite recent articles in the London press, Prozac has never been found in the nation’s drinking water. The alarm arose from a review by the United Kingdom’s Environment Agency of pharmaceuticals in the environment, which showed that traces of the anti-depressant were found in sewage effluent. The review did not include drinking water. While river water can be used as a source of drinking water, the waters receive advanced treatment to remove pesticides. The report also detailed how the structure of Prozac (Fluoxetine) is biodegradable and will be broken down by the sewage treatment process and in watercourses.

Desalinated water in London
Thames Water is finalizing plans for London’s first ever desalination plant, a £200m project due to come on stream in 2007 or 2008. The plan is currently awaiting approval by authorities in the Borough of Newham, with construction tentatively planned to start before the end of the year. Thames said the plant would play a key role in guaranteeing supplies to customers during drought periods with a maximum treatment capacity of 150 million liters of water each day.

Europe

Veolia sells Culligan for $610 million
France-based Veolia Environnement has entered into a definitive agreement for the sale of its Culligan business to private equity firm Clayton Dubilier & Rice for $610 million in cash. The sale represents the end of Veolia’s “Strategic Refocus” of water operations in North America, a $1.9 billion disposal program begun in September 2003. Other portions of the program include the sale of Everpure to Pentair in late 2003 and the sale of USFilter’s farmlands in California and systems and services businesses to Siemens earlier this year. The Culligan transaction, which is expected to be complete by the fourth quarter of 2004, is subject to regulatory approvals and other closing conditions.

Viewpoint

Friday, October 15th, 2004

By Karen R. Smith

While it would certainly be correct to discuss bottled water in the most positive terms—after all, it’s a $7 billion industry in North America alone—lately it appears to be under assault as often as it is praised. As record drought conditions persist throughout the West and Southwest and conservation efforts gather steam in the Great Lakes Basin, water bottlers appear to be coming under attack in America.

In August, the Los Angeles Times ran a story entitled, “An Idyll Interrupted”. The subtitle was more to the point: “After a Hiker Noticed That a Local Creek Had Dried Up, He Suspected His Neighbor Was Operating a Commercial Spring Water Business. And Then Things Got Ugly in Idyllwild.”

The article includes a recommendation that consumers avoid bottled water entirely.

Stephen Kay, the International Bottled Water Association’s vice president of communications, responded to the piece in a letter to the editor which the paper chose to print in a heavily redacted state. I share his thoughts in their entirety here:

“The lopsided article (‘An Idyll Interrupted’) does serious injustice to the bottled water industry. Painting a negative picture of the entire bottled water industry based on the actions of, and opposition to, one local spring owner is unfair. The article did not accurately portray an industry that has continually demonstrated its commitment to responsible use and management of resources, and that practices careful environmental stewardship.

If California residents are serious about protecting and sustaining the State’s ground water, any action must focus on all users of the resources, treat all users equitably and must be comprehensive and based on sound science. Without such an approach, any industry—no matter how little water they use—might be unfairly targeted. For example, what an interesting headline it would be if critics one day set their sights on the paper and newsprint industry, which uses a significant volume of water to produce its finished product; far more water than is used by the bottled water industry.

To single out the bottled water industry—from among the hundreds of industrial water users—is just plain wrong. And of those users, bottled water producers, on a national scale, account for less than 2/100ths of a percent (0.019) of the total ground water withdrawn in the United States each year. The fact is, typical bottled water companies utilize a highly efficient manufacturing process where, on average, 87 percent of ground water withdrawn is bottled and used for human consumption. No other industry can make that claim.

What a shame that a few activists would discourage consumers from drinking bottled water. In an era in which our nation is wrestling with issues such as obesity, hypertension and other health challenges, it is imprudent for bottled water opponents to discourage people from choosing the consistent safety, quality and convenience of bottled water for hydration and refreshment. Bottled water does not add calories, caffeine, sugar or other ingredients that consumers may wish to avoid or moderate and as a packaged food product is regulated by the U.S. Food and Drug Administration (FDA).

The bottled water industry is part of the solution and partners with other beverage producers, municipalities and recycling advocacy groups to encourage and build upon the curbside recycling infrastructure. The bottled water industry is also one of the original recyclers, as we collect, properly clean, sanitize and re-use the larger water cooler bottles found in many homes and offices. When their life cycle is complete, these bottles are also collected and recycled to become part of many common consumer products.

How unfortunate that after several communications between IBWA and the reporter covering this story, that the above facts were excluded from the article. The sad truth is that the Los Angeles Times had an opportunity to exert due diligence by accurately reporting both sides of the issue, but failed to do so.”

To which I can only add a hearty “Amen!”

 

Coming Up Through the Ranks John Heurkins of Chester Paul Company

Friday, October 15th, 2004

By Nate F. Searing, WC&P Managing Editor

Chester Paul Company
1605 Victory Blvd. • Glandale, CA 91201
Tel: (800) 227-2093; (323) 245-3761
Fax: (818) 240-8804
Email: sales@chesterpaul.com
Website: www.chesterpaul.com
Founded: 1948
Owner: Robert Caughron
Employees: 21
Revenue: Projected $14 million by the end
of 2004
Operation: Distributor of components for a variety of water treatment and water conditioning systems.

Like many longtime water industry professionals, John Heurkins’ career at Chester Paul Company started in the warehouse.

He began stocking for the company in 1979. Heurkins was a 20-year-old student at a local community college at the time, eyeing San Diego for the completion of his college degree because the local University of Southern California campus was too expensive for him to attend.

But Chester Paul Caughron, the founder and then-president of the company, singled out the part-time warehouse worker and helped to push him in a new direction.

“He was a one of a kind man,” Heurkins said. “I think he saw something in me, and he gave me the opportunity to find it myself.”

Caughron offered to pay for Heurkins’ education at the local university, giving him the ability to remain in contact with Chester Paul while continuing school at the more prestigious institution.

“The kicker was that he didn’t expect me to stay at Chester Paul (after graduation),” Heurkins said. “It was simply an act of kindness.”

When he completed his degree in 1982, Heurkins returned to Chester Paul as a sales associate. Since that time, Heurkins has, done every job there is, at Chester Paul, moving up through the ranks and is now the company’s general manager.

When Heurkins began in the warehouse, there were a dozen employees at Chester Paul. While he now oversees an additional nine, Heurkins said he tries to carry on the relationships, fostered by Chester Paul Caughron, that have become a staple for their office. He prides himself on being able to facilitate a positive work environment for all of them.

“Looking at how happy employees are, how interested they are in their work and their work environment, is the fastest and easiest way to gauge the quality of the service we provide to our customers,” Heurkins said.

That effort translates directly into successes for the company, Heurkins said, citing the firm’s $14 million projected revenues at the end of this year. Because of the growth throughout the United States, Chester Paul Company is for the first time exploring the possibility of expanding beyond the Los Angeles area with a facility to serve the East Coast.

“There’s no better place in the world to be located than the Port of L.A. for international shipping,” Heurkins said. “But to better serve our customers back east, that’s an option we’re starting to look at more seriously. It’s not in the near future anywhere, but it is a real testament to how well we’ve been doing supplying dealers across the country.”

Despite distributing products to many of the largest dealers in the country, the company has no plans to start offering full water conditioning systems, instead focusing simply on the components of those systems. The move is a purposeful marketing strategy that assures Chester Paul is not in direct competition with the dealers that it supplies.

“It’s not a place we want to go, both out of respect for our customers and because it sets us apart from some of our competitors,” Heurkins said. “We are content where we are, and we’re growing very well.”

 To read more about Chester Paul Company and its ever expanding presence in the United States and abroad, as well as General Manager John Heurkins comments on the company, visit www. wcponline.com and click on the “Executive Q&A” button.

 

Determining The Marketing Budget

Friday, October 15th, 2004

By Michael Pasqua

Ask the right question
One of the most difficult jobs you face each year is budgeting. It’s a function that requires you to predict what you’ll need, what it will cost and what will be the rewards. Many budget items are obvious: real estate taxes, for example, or the monthly payment due on your trucks. Marketing budgets are not as cut and dried. Whether your company already has such a budget, or this is the first time you’re considering one, the most frequently asked question about promotional budgeting is “how much?” when the real question should be, “What are the various methods for setting promotional budgets?”

Two methods to not try
The first is the most often used and the most flawed. It is called the “percent of sales” method—if you sell more product, you’ll invest more in promotion. This is literally putting the cart before the horse. Those who decide on this method can be easily spotted at industry gatherings—they claim advertising and public relations and promotions are a waste of time and money!

More sensible, but just as limiting is the “percent of profit” method. Under this method, promotion seems to be tied to its return on investment, but again, it puts the horse in the wrong place. Your promotional efforts have to begin at the front of the process.

Competition based alternatives
Another budgeting option is “matching the competition.” Here, one estimates what others in the industry are investing and then matches that figure. The problem with this method is that it keeps you evenly paced with your competition and prevents you from gaining on them.
The fourth method is a combination of the first and third. Known as the “keep pace” method, it calls for you to invest an amount proportionately equal to your competition’s sales-to-promotion ratio. Thus, if your competitor invests five percent of sales on promotion, you would do the same.

The right choice
The fifth, and most sophisticated means of discovering the right promotional budget is called the “task oriented” method. As implied, the object is to achieve a task or goal. It’s the preferable technique for most businesses because the budget can be easily determined, enacted and monitored.

When we apply this method to our clients’ programs, we start with a list of all the promotional tactics that would advance our communications strategy, citing the task it is intended to achieve. Some call this a wish list; we think of it as a promotional menu.

We then prioritize the items on the list and assign actual costs to each. Once this is done we meet with our clients and determine what is really essential, what can be pared down, what can be postponed and what can be eliminated. Now we are ready to formulate the budget based on what the company can really afford to invest.

The benefit of this method is that it lets promotion be the driving force for your overall marketing program rather than the necessary expense—or unnecessary evil—as some may view it. If your marketing budget dollars are working for you from the outset, those dollars generate more sales activity, more community exposure, more business. And isn’t that the point?

About the author
Michael Pasqua is a partner at Hercky Pasqua Herman, an award winning full service advertising, marketing and public relations agency specializing in business-to-business clients. The firm offers a full range of services to clients in every budget category across a broad span of industries. He can be reached at Hercky Pasqua Herman, 324 Chestnut Street, Roselle Park NJ 07204, telephone (908)241-9474, email michael_ pasqua@ hotmail.com

Stopping Legionella and Other Waterborne Pathogens in Their Tracks– A Global Perspective

Friday, October 15th, 2004

By Judy Angelbeck, Ph.D.

For many people the word Legionella conjures up memories of the Hotel Bellevue in Philadelphia, Pa. in 1976. That is where Legionnaires’ disease was first identified and named when a group of American Legion conventioneers were taken sick, some fatally, from a contaminated air conditioning system. What most people don’t realize is that the source of Legionella infection is waterborne. Legionella bacteria are one of many pathogens that are ubiquitous in the environment and occur naturally in the water supply. For the majority of people exposed to Legionella bacteria, the outcome is benign. However, for sensitive populations, such as newborns and the elderly, the immunocompromised or those recovering from recent surgery, cancer, burns, or suffering from chronic lung disease, the outcome can be serious and life threatening. The problems and risks associated with waterborne pathogens, including but not limited to Legionella bacteria, are most critical in places where there is a concentration of immunocompromised people such as in hospitals, nursing homes and long term care facilities. (See Table 1).

Hospital acquired infections increasing worldwide
Nosocomial, or hospital acquired infections, are increasing at an alarming rate worldwide. According to the U.S. Centers for Disease Control and Prevention (CDC), nearly two million patients contract infections during their stay in U.S. hospitals (about 10 percent of all hospitalized patients), resulting in significant morbidity, mortality and financial burden. In 1995, nosocomial infections resulted in 88,000 deaths in the U.S. at a cost of $4.5 billion. Simply put, hospital acquired infections affect one in 20 patients and kill more people annually than homicides and car accidents combined. The CDC also reports that 23 percent of all Legionnaires’ disease reported in the U.S. in the 1980s was acquired in hospitals and of these cases, 40 percent of the patients died, twice the rate for infections acquired outside the hospital.

Although water is often overlooked as the source of the outbreaks, it is increasingly being recognized as a significant culprit. A recent survey found that as many as five out of six hospitals in one geographic area of the U.S. had Legionella bacteria in the water supply. According to Janet Stout, Ph.D., microbiologist and Director of Special Pathogens Laboratory at the Veteran Affairs Pittsburgh Healthcare System, approximately 18,000 cases of Legionnaires’ disease occur annually in the U.S. and 25 percent of these are acquired from hospital water systems.

Despite the growing incidence, the number of outbreaks continues to be underestimated, due to mis-diagnosis and underreporting. Legionella bacteria are not automatically or routinely cultured for when a hospitalized patient contracts pneumonia. Some experts contend that hospitals may also refrain from reporting cases due to misunderstandings surrounding Legionella and the specter of negative publicity associated with it.

The incidence of hospital acquired waterborne illness has also increased throughout Europe. The European Working Group for Legionella Infections (EWGLI), which conducts surveillance in 33 countries, reports a 74 percent increase in Legionella cases over the decade, from 1,242 cases in 1993 to 4,696 cases in 2002. Although some of the increase can be partially due to better detection and improved surveillance, most experts contend that just like in the U.S, the number of cases of waterborne pathogen outbreaks in hospitals is underestimated. According to Dr. Tom Makin, Directorate Manager of the Department of Medical Microbiology of the Royal Liverpool and Broadgreen University Hospitals, extrapolation of data from a prospective study on community acquired cases of pneumonia indicates that approximately 95 percent of cases of Legionnaires’ disease are misdiagnosed or go underreported. He attributes this to the fact that the symptoms of this atypical form of pneumonia are diverse and do not assist in the diagnosis. He says that the data suggest that the current level of reported cases of hospital acquired Legionnaires’ disease is also far from accurate, perhaps by a factor of ten or more, and is also increasing. His assessment is borne out by recent cases in several UK hospitals as well as the finding that up to 70 percent of UK hospitals have Legionella bacteria in their water supply.

Biofilm and aerosolization: not just Legionella
Legionella bacteria are not the only waterborne pathogens that can put immunocompromised people at risk. There are a host of bacteria and mycobacteria as well as fungi that can also be life threatening.

An estimated 1,400 deaths occur each year in the U.S. as a result of nosocomial pneumonias caused by the waterborne bacteria Pseudomonas aeruginosa alone. This bacterium causes approximately 15 percent of all hospital acquired infections and 25 percent of all infections in the intensive care unit.

The incidence of hospital mold infections also continues to increase despite the use of high efficiency air filtration systems. This has led to recognition that water systems in hospitals can also be colonized with pathogenic molds. Studies conducted by Anaissie, et.al. found that opportunistic molds, such as the fungi Aspergillus, can become part of a water system’s biofilm and lead to patient exposure from spore aerosolization in patient care areas. (See Figure 1).

In aqueous environments, microorganisms preferentially colonize surfaces to increase their chances of survival. The colonies are part of a biofilm, communities of microorganisms adhering to environmental surfaces surrounded by the slime they secrete. These biofilms can build up on the surfaces of a facility’s water system and be found in pipes, faucets, showerheads and storage tanks.

Drinking contaminated water is one means of exposure. Exposure also occurs by breathing in the aerosols, the tiny invisible droplets of water that contain the microorganisms, which form when water hits the biofilm on the hard surface of the faucet, showerhead or pipes (See Figure 2).

Legionella and other microorganisms can be found even in hospital water systems that are well maintained. While a number of methods exist for systemic treatment that may minimize the Legionella population in the water distribution system, re-colonization frequently occurs within a few months. Legionella can resist chemical and physical disinfection schemes by living in biofilms and inside amoeba, which act as a Trojan horse and protect the bacteria. It is becoming increasingly recognized that the best approach to minimize patient exposure, particularly for high-risk patients, may be combining multiple methods, such as a systemic method with point-of-use (POU) sterilizing grade filtration.

Europe on the vanguard of prevention: POU filtration
The European community is in the forefront in acknowledging the risks of waterborne pathogens for immunecom-promised patients and is working to both identify and prevent the problem. Some nations have issued guidelines and recommendations to prevent exposing high-risk patients in the hospital environment to these pathogens.

Last year, the French Ministry of Health issued a guideline that all hospitals install a 0.2-micron filter in water units where immuno-compromised patients are treated to protect against the spread of Legionella pneumophilia. This year, an official recommendation in the Bundesgesundheistblatt, the official organ of the Robert Koch Institute of the German Health Authority, called for point-of-use filtration in hospitals especially in areas with immunocomprom-ised patients, such as hematology/oncology wards and intensive care units, in order to protect them from Legionella and Pseudomonas infections.

It has become generally accepted that 0.2 micron filters represent the most effective barrier to bacteria transmission. The CDC has identified, as an alternative to sterile water, 0.2 micron filtered water to meet the standard of the highest quality of water that is practical for final rinse of endoscopes and other medical devices. However, not all POU 0.2 micron filters are alike despite claims to the contrary. Confidence in their use should be based upon performance claims in actual clinical experience.

0.2 micron point-of-use water filters are being used with success throughout Europe. Studies conducted in transplant units, hematology/oncology units and intensive care units have shown a reduction in Legionella and Pseudomonas outbreaks and the rate of infections significantly reduced or eliminated. A new study just completed in the U.S. by the VA Pittsburgh Healthcare System found that the 0.2 micron completely eliminated Legionella pneumophilia and Mycobacterium spp and achieved a greater than 99 percent reduction in heterotrophic bacteria in the water samples (See Figure 3).

The American approach
Although it has been known and documented since 1982 that water, especially in hospitals with complex hot water systems, is the most important source of Legionella transmission, the issue of nosocomial waterborne infections is just starting to appear on the radar screen. A convergence of multiple events is planting the seeds for change. There have been an increasing number of outbreaks of waterborne infections in hospitals across the United States. We are now learning from the Europeans the value of taking more proactive measures with point-of-use filtration to prevent exposure and protect patients. The Joint Commission on Accreditation of Health-care Organizations (JCAHO) has announced implementation of a requirement for reporting of hospital acquired infections starting July 2005. The CDC recently amended their guidelines to stipulate that water in areas housing transplant patients should not contain any Legionella bacteria. The Consumers Union is conducting a Stop Hospital Infection campaign to raise awareness of nosocomial infections and support legislative efforts. Five states—Florida, Missouri, California Pennsylvania and Illinois—are in various stages of the legislative process calling for hospitals to alert the public to their infection rates.

Conclusion
A great deal of education is still required. As physicians, infection control professionals, hospital and nursing home administrators, patients and the public at large continue to become more educated there will be a shift from a reactive to a proactive preventive posture in the health care setting. Perhaps this will one day also extend to patients in their homes upon discharge from a hospital, many of whom are immune compromised for a specific time frame and others for their lifetime. Water for drinking, showering, bathing and cleaning that is free of harmful microorganisms will provide protection for a growing immunocompromised and aging population as well as increase opportunity for companies that make smart filters, those that are customized to remove specific contaminants, while enabling high throughput.

About the author
Judy Angelbeck, Ph.D. is a senior vice president of Pall Medical. A 20-year veteran with Pall, in her current role she serves as a senior advisor to the Company’s blood business, works on developing new business for Pall technologies in the somatic cell therapy market and provides marketing support on blood and other product areas to the hospital group. Dr. Angelbeck is an appointed voting member of the Blood Safety and Availability Advisory Committee to the United States Secretary of Health and Human Services. She holds a Ph.D. in Cell Biology, a Bachelor of Arts in Journalism and a Bachelor of Science in Biology from the University of Toledo in Ohio. She can be reached via email at judy_angelbeck@pall.com

Form and Function—Bottled water websites that are entertaining and informative

Thursday, October 14th, 2004

by Nate F. Searing, WC&P Managing Editor

As the pages of the magazine spot-light different aspects of the ever-growing bottled water industry, we decided it was time to take a look at how major organizations are presenting bottled water issues online.

From a wealth of information geared toward consumers to industry data that bottlers and suppliers will find critical, much of the content we discovered can only be found on the web.

Whether you’re a bottler or a dealer, odds are you’ve visited at least one of the websites listed herein. Take another look. You might be surprised by just how much information is out there to help educate your consumers.

Don’t miss the new websites, like http://Finewaters.com, where you will find information that can be used to promote your water, explore new marketplaces and, if nothing else, entertain you.

http://www.bottledwater.org
The International Bottled Water Association has clearly positioned itself as the definitive online resource for bottlers, suppliers and consumers through their Internet presence.

Easily navigable and visually appealing, the IBWA website features an endless array of consumer-driven information that is both easy to understand and provides insight into the health benefits of bottled water. From the homepage, viewers can click on Bottled Water Facts to get information on everything from comparing taste the taste of tap water to an overview of international regulations for the industry. Consumers new to bottled water or thinking about making the switch from drinking from the tap would be well served by reading the Frequently Asked Questions (FAQ) section, which provides basic information about bottled water safety, cryptosporidium issues and a variety of other subtle endorsements for the industry.

For the more advanced viewer, the website has a comprehensive news section that keeps tabs on the functions of the IBWA and its member companies, and the remainder of the water purification industry as well. A similarly comprehensive calendar provides information on trade shows and conferences for a variety of bottled water associations. The only drawback of the calendar section is that it appears to be updated at the beginning of each year so events that have come and gone through October 2004 have not been removed.

For bottlers and distributors, the site is the gateway to the IBWA’s online services for its members. This portion, which can only be accessed by current members, provides even more helpful specific member news, links and outlines a variety of programs provided through the association, reinforcing why, if you are not a member of the IBWA, you should be.

http://www.bottledwaterweb.com
What differentiates this website from the IBWA offering is the focus. While the IBWA provides a variety of general information for consumers, Bottled Water Web almost exclusively caters to industry professionals, combining a variety of useful pages that include an industry calendar of events, marketing and advertising tips, research articles and much more.

Like other large bottled water websites, Bottled Water Web offers thorough water analysis and company profiles of dozens of bottlers and suppliers in the United States. Unlike finewaters.com (reviewed below), Bottled Water Web does not venture out into the international marketplace, but what it lacks in international content it more than makes up for in unique features that are notably absent from other comparable sites – like the website’s job search function. By clicking on the Career Center button on the left hand side of the homepage, viewers can see employment listings for government, utilities, private businesses and research-related positions. This type of job search is notably lacking from other water-related websites and is more on-point for job seekers than simply search “water” on careerbuild.com or monster.com.

Another unique feature of the site is the Shopping toolbar. Industry professionals can find research material on bottled water, including videos and reference books, as well as bottled water novelty items and links to other companies which offer custom labeling and other unique products and service for sale.

http://www.finewaters.com
Every once in a while a website appears that despite an informative and well-designed concept, comes to be known simply because of its one-of-kind content. They are the sites we tell our friends about and forward to our coworkers. Fine Waters appears poised to be that type of site for bottled water drinkers and bottlers alike.

A simple layout directs viewers from the homepage to a variety of topics including bottled water news, a listing of international distributors and bottlers, and a variety of other information.

So you thought water was just a drink? Think again. It’s a lifestyle choice.

That’s the motto at Fine Waters and the site never shies away from presenting the bottled water industry as a source of ultra-chic products for ultra-chic consumers. Where it truly shines is in its presentation of the vast array of luxury bottled water products and services. At the click of a button, viewers can get indexes, photos and reviews of high-end bottled water produced and sold in every country on the globe. Additional links provide reports from chefs and water connoisseurs on a host of water-related topics, such as:

  • Identifying the right temperature for drinking water with certain meals;
  • The importance of bubble size in effervescent water;
  • Enhancing chocolate with the right bottled water;
  • Selecting stemware based on the type of water you are serving.

While on the surface, the website appears to be fun diversion for many consumers and a welcome resource for those in the upper-echelon that can afford the luxury items, Finewaters.com also has a wealth of information for bottlers and distributors of all types of water. Under the Bottled Water Resources button, dealers and manufacturers can find reports on marketing bottled water products, advertising through unique bottle designs and links to national and international regulations for the production and sale of bottled water.

Conclusion:
The bottled water industry has its bases covered when it comes to providing information to consumers and manufacturers alike online. While there is a lot of overlapping information on larger bottled water websites, each provides its own unique content that makes it attractive to viewers in every part of the industry.

For an industry as large, and growing as quickly, as the international bottled water market, it would be impossible to expect any one website to be all-encompassing. But take these three together and there’s very little information you’ll be missing.

Whether you’re looking for industry-specific information, or interested in seeing the staggering array of bottled water products available worldwide, these websites are sure to please.

http://www.bottledwater.org
The official website of the International Bottled Water Association, www.bottledwater.org is a comprehensive overview of all things related to the bottled water industry. From consumer-focus topics, like how much water to drink each day, to industry specific items, such as trade show information, the IBWA website has something for everyone.
http://www.bottledwaterweb.com
Like the IBWA, this website is a comprehensive overview of the bottled water industry that provides a wealth of information for everyone from bottlers and supply companies to their consumers. Founded by a bottled water consultant, the website also includes a detailed listing of links to bottled water company sites that is missing from the other sites reviewed herein.
http://www.finewaters.com
While the site gives an overview of bottled water companies around the globe, water news and fact sheets, the real gem on this site is the comprehensive listing of high-end waters available in every country. Simply perusing the bottles, the names, the unique tastes and array of available water goblets makes any bottled water drinker feel like the nouveaux riches.
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Bottled Water: #2 Commercial Beverage in the U.S.

Thursday, October 14th, 2004

By John Rodwan

Bottled water now ranks as the second largest commercial beverage category in the United States on a volume basis. It has surpassed such venerable beverages as beer, coffee and milk to become one of America’s favorite drinks and it did so very quickly, according to Beverage Marketing Corporation, a leading research, consulting and financial services firm dedicated to the global beverage industry.

In 2003, total U.S. category volume approached 6.4 billion gallons, a 7.5 percent advance over 2002’s volume level. While bottled water’s 2003 volume growth was markedly slower than the 10.8 percent increase recorded one year earlier, it nevertheless remains the fastest growing major beverage segment in the U.S. During the five-year period from 1998 to 2003, bottled water volume increased by an unrivaled compound annual growth rate (CAGR) of 9.1 percent. The categories of comparable size—beer, coffee and milk—have all contracted or remained steady lately. The surging popularity of bottled water can be explained by consumers’ desire to choose water as a thirst quencher. Americans increasingly appreciate the convenience, taste and calorie free benefits of bottled water.

The U.S. bottled water market reached new highs not only in volume but also in wholesale dollar sales, which surpassed $8.3 billion in 2003. However, not only did sales growth slow compared with the previous year, as was also the case with volume; sales also grew at a lower rate than volume for the first time in nearly a decade. This reflects the impact of price promotions. Pricing has been the biggest issue across the board. Price promotions, once a primarily west coast marketing practice, are now common throughout the U.S.

Per capita bottled water consumption reached 22.6 gallons in 2003, up from 21.2 gallons in 2002. U.S. residents now drink more bottled water annually than any other beverage besides carbonated soft drinks (CSDs). While CSDs still have volume and average intake levels more than twice as high as bottled water, the soft drink market has been stagnant lately, in no small part due to competition from bottled water. Per capita consumption of bottled water has been growing by at least one gallon annually, thereby more than doubling in a decade. Average intake of CSDs has dipped slightly for several consecutive years.

Domestic non-sparkling water, especially the retail premium PET segment, is the star of the U.S. packaged water industry, consistently outperforming other segments. Indeed, it is primarily the single serve segment that is driving overall category enlargement.

Leading companies have forged new distribution arrangements in order to thrive in the growing PET segment while also attempting to revive other segments. These new alignments have altered the industry make-up, as one of the biggest companies has essentially turned to others for distribution of its various brands. Coca-Cola’s pact with Danone Waters of North America (DWNA), dubbed CCDA Waters and, more recently, the creation of DS Waters Enterprises, exemplify this development. Coca-Cola now carries Danone’s PET brands, while DS Waters took on its home and office delivery business.

In 2003, the top three bottled water companies in the U.S.—Nestlé Waters of North America (NWNA), Coca-Cola and Pepsi-Cola—accounted for 59 percent of total wholesale dollar sales. NWNA remained the largest bottled water company in the country, with nearly $2.7 billion in sales. Thus, NWNA claimed approximately one-third of total bottled water sales in 2003. Coca-Cola’s water sales, newly augmented by Danone’s PET brands, approached $1.3 billion in 2003. If it were measured by its Dasani brand only, which had sales of $834 million in 2003, the company would have ranked third behind Pepsi. Marketing just one brand, Pepsi accounted for 11.3 percent of the market in 2003. With sales of $936 million, Pepsi’s Aquafina was the top selling bottled water brand in 2003.

Although NWNA, with its extensive portfolio of brands, ranks number one with the highest overall company sales, Pepsi’s Aquafina and Coke’s Dasani rank as the respective number one and number two best selling brands. NWNA has three of the five top selling bottled water brands (Poland Spring, Arrowhead and Deer Park). Its Ozarka, Zephyrhills and Ice Mountain brands also ranked among the top 10. Evian, which is now distributed by Coca-Cola, ranked as the number 10 brand in 2003.

About the author
John Rodwan is the editorial director of Beverage Marketing Corporation, which provides information, consulting and financial services specializing in meeting the needs of the global beverage industry. Contact him at Beverage Marketing Corporation of New York, 850 Third Avenue, New York, NY 10022, telephone (212) 688-7640; fax (212) 826-1255, www.beveragemarketing.com

Bottom Line On The Bottling Line

Thursday, October 14th, 2004

By William S. (Bill) Siegmund, CWS-V

For many water treatment dealerships, adding bottled water to the inventory of products and services may seem like a natural progression. After all, it is the fastest growing sector in an industry that includes the omnipresent Coke/Pepsi carbonated beverages, as well as the lucrative beer market. In 2003, the consumption of bottled water in the United States rose to 22.6 gallons per capita. Impressive growth like that might make the temptation to enter this area of business overwhelming. After all, the technologies used to purify water are employed routinely by most dealerships and the route deliveries of bottled water are not much different than delivering salt.

Why not then? There are many factors that must be taken into consideration in today’s market that can improve the time line for success, or lead to potential failure. Careful consideration of certain factors can help assure a share in this growing market.

Market sector
The sector that holds the greatest potential for water treatment dealers is the five-gallon market. However, the majority of the 7.5 percent increase in bottled water sales from 2002 to 2003 is in the small bottled sector. This “shelf” water represents gigantic potential, but look at the competition. Attempting to compete for coveted supermarket shelf space against the likes of Pepsi and Coke or Perrier/Nestlé is not only the story of David and Goliath, but a real Herculean task. The competition for shelf space in retail establishments is so fierce that often the bottled water, whose cost of production is so much lower than soda pop beverages (no sugar, no carbonation, no secret flavor formula) is bargained and bartered to get space for other products. I know of some other-than-mythological successes in this market, mostly with small run, private labeling, but it is tough competition for growth. If you are too successful, the competition has the ability to eliminate you at will.

It also involves the in-house production of polycarbonate plastic bottles, (0.5 liter to 1.5 liter) or polyethylene (one gallon) complicating the amount of equipment that must be purchased and more importantly, must be maintained. In this sector, “pennies make dollars”, and “the numbers game” is always the rule. There is some growth in the small bottle market sector but most of this is in emerging markets overseas, where the multinational rules are yet to be written and the water is not potable from the tap.

Understanding your market
The key to this section is the word your. It is important to consider not only the potential of your market but how much of that market you can conceivably hope to take on. I met one bottled water dealer from Manhattan at this year’s Water Quality Association/International Bottled Water Association (WQA/IBWA) joint meeting in Chicago. His market area was mostly one building, but that building happened to be the Empire State Building in New York City. It provided the majority of his market reach. In my company’s case, we have to go five counties to reach a population density of 150,000. This is a limiting factor on the potential of the market available to us because of the effective costs of providing service.

It is important to do market research. I’m not talking about hiring a consulting firm. Just take a look at who is providing bottled water in the area you hope to penetrate. What type of water are they providing? What size containers, and at what selling price? As a water treatment professional, you have a business with liabilities and a reputation to protect. You, of course, will do it right, but you must still consider what’s out there and at what cost. The bottled water industry is regulated by the U.S. Food and Drug Administration (FDA) as a packaged food product and has stringent standards for safety, quality, production, labeling and identity. However, most enforcement falls under state government inspections that can be surprisingly weak. This allows many levels of entry into this market that may also force downward pressure on pricing to an uneducated consumer (i.e. the provider that fills bottles from a garden hose in his garage). These people can certainly provide a cheaper product and service than a provider that is committed to the highest standards set by FDA, state government or the more stringent IBWA model code.

An observance of current and heralded regulations must also be considered. As an example, the coming arsenic standards may cause an increase in awareness that may help to increase the market potential.

Doing your homework
Federal, state and industry standards help ensure product and consumer safety, quality and good taste. “Along with the FDA’s Good Manufacturing Practices (GMPs), required of all foods, bottled water has several other applicable regulations including Standards of Identity, Standards of Quality and additional, specific bottled water GMPs. Being a packaged food product, bottled water is also bound by the Nutritional Labeling Regulation Act and the full range of FDA protective measures designed to enforce product safety and protect consumers. States may also mandate additional bottled water standards and also serve to inspect, sample, analyze and approve bottled water sources”.1

The International Bottled Water Association upholds additional standards through the IBWA Model Code. IBWA is an industry trade association that functions much like our Water Quality Association. Like WQA, IBWA serves as a clearinghouse for information and a networking opportunity to gather with others in the industry to help meet group goals. The Model Code also subjects IBWA members to annual, unannounced plant inspections by nationally recognized third-party organizations.2 The IBWA can be reached at www.bottledwater.org. I recommend that when considering entering the bottled water business you should, at minimum, know and understand the IBWA Model Code and build your facility to conform to these standards. By doing so, you assure the GMPs necessary to protect your product, the consumer and your business. Talk to a good insurance provider about the liabilities associated with producing and distributing a food.

Doing it right
Our company has provided bottled water service for more than 23 years. I always believed it to be a good fit with other aspects of the water treatment business. In our early years, the home distillers and emerging reverse osmosis systems were relatively expensive and involved a great deal of consumer education. The bottled water industry was born, for the most part, as a convenience. More recently that industry has answered the quest for purity demanded by a more educated and concerned public. It is common practice to get an existing bottled water manufacturer to fill bottles for you, which is what we did. The difficulty in doing so is that few bottlers are willing to help a competitor get into the business. This means finding a provider that is not directly in your target market area. This can put “wheels” on your bottled water that lead to higher costs and less profit.

As an example, we had a major bottler provide our water. This lead to a stock sale that resulted in a partnership that lasted many years. However, our water was produced in an IBWA facility in the Detroit area, put into 30-bottle racks, and loaded by lift trucks onto a semi that transited the 280 miles to our Traverse City warehouse. We unloaded the racks and placed them, as needed, on to our eight bay delivery truck for distribution to our customer base. We estimated that this added as much as $1.75 to the cost per bottle. When we parted company in a stock buy-back nearly two years ago we were delivering more than 36,000 bottles per year. Capitalizing to build our own facility was a no-brainer. The pay-back on investment, including down payment on the building, top of the line bottles, racks and state-of-the-art washer/ bottler was less than two years. By this time, we also had the information on the size of our market potential that allowed us to buy the proper equipment to meet our demands without over- or under-buying. In making my decisions I called on my experience (we have built water systems in support of seven bottled water facilities) and information from people in the industry. Chuck Swartzle of Besco Water gave me great advice when he told me, “Don’t buy cheap and don’t buy too small.” Your washer/bottler is the heart and soul of your operation. Trouble here causes ripples through the entire operation. There are major suppliers of automated washing/filling/capping machines that are supplying good machines in the 150- to 300-gallons per hour range that were not available in years past. These can really ease your entry into the bottled water market. Ours has a multi-stage wash, multi-stage rinse with final product water/ozone rinse. It flips and fills the bottles and caps them with an ozone cap rinse. The entire fill is done with filtered positive air displacement. (This can function as a “clean-room” to lessen some of the build out requirements. However, the IBWA model code does not accept this and insists on a separate fill room with positive air displacement.) The bottle wash port and exit conveyer are right next to each other for one-man operation. There is some entry level equipment that uses chemical washes, with hand filling and capping, but all the handling can increase the risk of cross-contamination.

Lastly, testing of product water along with proper date coding is a very important requirement. We are fortunate enough to have a State Certified laboratory as part of our operation. We perform our daily sampling for coliform/fecal e coli in house. Our yearly product/source water testing is outsourced to a national laboratory. It is only good business to have enough (quality) racks and bottles to hold until they can be cleared for testing. This lessens the potential of having to recall water from the field.

The bottom line
Bottled water can make a profitable addition to a water treatment dealership. Independent dealerships have an easier time entering the market than franchises that may have prohibitions against it unless you buy from an authorized supplier or become one. Over the years it certainly has been good to me, but nowadays there are a lot of competitors, so beware. I would be remiss if I did not mention the pressure on cooler rentals from the big box stores. We have many requests lately to buy out their rental coolers, sparked by a “why rent” promotion at a large retail home store, that has put some serious pressure on this once rock-solid part of the business. There are many varieties of coolers and from overseas (China in particular) are very cheap with recognizable brand names. Good quality coolers are a very important piece of the puzzle. The one I favor has double overflow protection that is becoming more important with the emerging mold and mildew issues. My insurance provider has just informed me that they will not cover claims for mold or mildew.

With some planning and consideration, your profits can come quickly. As interest rates are still quite low, lease with buy-out makes it reasonable to buy the proper equipment that will facilitate your growth and help assure a quality product.

As a side note it is important for all to remember that more than 6,000 children die each day from treatable water related disease. Stewardship with the most precious of Earth’s natural resources is that important.3

References

  1. http://www.bottledwater.org/public/2004
  2. http://www.bottledwater.org/public/pdf/IBWA_MODEL_CODE_2004_rev_ Oct03.pdf
  3. http://www.WorldHealthNews.harvard.edu

About the author
William S. Siegmund, CWS-V, is founder and Managing Director of Pure Water Works Inc., an independent dealership featuring Hague Quality Water Products with operations in Traverse City and Gaylord, Mich. A 20-year veteran of the water treatment industry, Siegmund is a member of the Water Quality Association, American Water Works Association and former member of theWC&P Technical Review Committee. He has earned the WQA’s Certified Water Specialist-Level 5 designation and has served on its reverse osmosis, distillation, disinfection, ozone and plumbing code task forces. He can be reached at (231) 941-7873, (231) 941-7874 (fax) or email: pww@frontiernet.net

 

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