The
Business
The Market
The future
Presented By:
Robin Householder
Vice President
Pure Health Solutions Inc.
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Are you ready?
Have you started?
How does it fit your business plan?

Can you afford not too?
As a member of the beverage industry
commit to providing the drinking water
product and method of delivery that the
consumers are requesting.

Be competitive
◦ Provide an environmentally friendly alternative to packaged water
◦ Responsibly hydrate your customers workforce with a healthy high
quality water beverage
◦ Solve logistical issues
◦ Storage, location, customer needs, security, etc.
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Diverse product line
◦ Show your customer you have a diverse product line and can
handle all their office service needs
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Increase revenue per account
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POU only
◦ Majority of products on factored lease
◦ local to regional based
◦ Under capitalized
◦ Technology varies with price
◦ Sales driven business
◦ Some use of coffee as accessary item
OCS
◦ Equipment capitalization in house
◦ Secondary offering to coffee
◦ Mostly carbon filtration technology
◦ Little water only accounts
◦ Lower rental rate as add on to other business
Bottled Water
◦ Used as a defensive tool to save accounts
◦ Technology varies with price (usually lower price advantage)
◦ National footprint companies have competitive advantage
◦ Strong service and support network
Water treatment
◦ POU model differs from Residential model
◦ Uses good filtration technology
◦ Rental rate higher than average
◦ Services charges extra
◦ Specialize in problematic water
Option
Bottled Water (HOD)
Small package (PET)
Tap
Point-of-Use
Challenge
Logistics,
Environmental impact
Cost
Logistics,
Environmental impact
Cost
Taste
Health
Employee satisfaction
Quality
Service
installation
o
o
o
o
o
o
o
o
Accounts concerned about their environmental
impact (Green organizations)
High volume accounts
Sanitary conditions make it necessary
Customer requests it
Cost issues
Security needs
Storage space issues
Companies concerned about health and Safety
o
o
o
o
o
o
o
o
Reduces environmental impact
Reduction of vendors
Better tasting coffee
Service at a level they are accustomed
Security
Fewer monthly accounts payable
Fixed budget
Ensures consistency in “Quality People,
Products, and Service”
Capitalize on embedded competencies by
entering into a business that compliments
your existing organization
o
o
o
o
Route delivery and service team
Dedicated company sales force
Enhance service to your customer base
Billing and accounting procedures
JK, That is only for your customers
LOL, We have work to do!
Is there a market to sell water?
#getrich #opportunity #goodbusiness #BYA
o
o
o
o
Over 1 million POU coolers are installed in the
US
2014 is estimated to install over 150,00 units
in the US
Market awareness is driving consumer
demand for both high quality and low price
options
Increasing market size is now determining
the differentiation in business models. Such
as Low cost, High quality, Brand etc.
The European market has set a baseline for assumed mature
market penetration. The US is still far behind countries such as
the Ireland, Denmark, Sweden and the UK.
POU Market
Positives
• Increasing market growth
potential
• Less competition
• Room for product
differentiation
• High barriers to entry for
high quality competition
Opportunities
• Bottled water conversion
• Institutional, Medical, hotel
and restaurant accounts
• Growing concern for green
alternative
• Free media from threatened
water supplies
• Residential market
untapped
Negatives
• Varying water sources
require trained technical
staff
• Long term profitability
model
• Consumer acceptance
• No proven residential
model
• Price competition from
Bottle and Low cost POU
companies
• Large HOD companies
offering POU products
• 12-18 month capitalized in-house payback average monthly
rental (Water cooler)
• R/O with disinfection $45-$55 (avg cooler cost $450$550)
• R/O $40-$50 (avg cooler cost $350-$400)
• Carbon filtration (economy) $25-$35 (avg cooler cost
$175-$225)
• Market price driven by low cost imports and converted bottle
coolers
• 80% of coolers placed under a rental agreement
• Rental agreement roll over 80-90%
• Market is trending from all inclusive service to obligatory
paid service and filter changes
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On-line survey, conducted by Amplitude Research
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500 respondents, screened for:
◦ involved in the purchase and/or management of the
complimentary employee beverage program (water and/or
coffee) at their business
◦ business size of at least 10 employees
◦ job title Supervisor or higher
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Respondents worked at businesses that employ at least 10
people and were personally involved with their company’s
beverage program
◦ Most respondents were employed with small to mid-sized businesses:
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29%
40%
19%
11%
have 10-49 employees (82% of companies with more than 10 employees)
have 50-499 employees (17%)
have 500-2499 employees (1%)
have 2500+ employees (0.3%)
◦ Most respondents were beverage program decision-makers (more than
one response permitted):
 69% select/ decide a program
 40% recommend
 34% manage
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97% had water units on-site:
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41% have 1-4
46% have 5-99
10% have 100+
95% had coffee units on-site:
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◦
◦
48% have 1-4
38% have 5-99
9% have 100+
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Respondent title levels were evenly divided between Supervisor/Manager (53%) and Directorand-above (47%)
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Respondents’ functional roles were in Operations (43%), followed by Office Management (19%):
◦
43% Operations
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31% Operations Management
12% Facilities Management
19% Office Management
12% Finance
11% Purchasing
7% Human Resources
8% other
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Primary beverage station placement is in office (45%) and
operations (43%) locations:
Office, 45%
Other, 7%
Healthcare,
5%
Operations
Manufacturing
Retail
Warehouse
18%
16%
9%
, 43%
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In addition to employees, beverage stations often serve
customers:
Employees
52%
43%
Employees & customers
Customers
5%
[% of respondents]
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Beverage program decision-making responsibility is most
often in Operations (41%) and Office Management (26%)
Other, 4%
Operations
Human
Resources,
Finance,
7%
9%
, 41%
Purchasing
Operations Mgt
Facilities Mgt
25%
16%
, 13%
Office Mgt,
26%
[% of respondents]
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One-third of respondents switched to a new beverage
program in the last three years
After price, customers are most motivated to drop a program
due to dissatisfaction with service and equipment quality:
Pricing too high
55%
49%
40%
Ineffective service / problem…
Equipment not quality / not…
Unsatisfactory beverage quality
29%
25%
21%
14%
Inappropriate / unattractive…
Time-consuming program…
Environmental concerns
Other
4%
[% of respondents; more than one
response]
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Customers learn about new beverage program suppliers
primarily through peers, on-line search and sales rep contact:
Peer networking / word of mouth
57%
46%
43%
On-line search / Google
Sales presentation / contact by…
On-line advertising
31%
25%
22%
21%
Trade association
Trade magazine advertising
Trade show
Other
1%
[% of respondents; more than one
response]
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When switching, customers are most motivated by the
equipment and service quality offered by the new supplier
(after price):
Appropriate / better pricing
63%
Quality and reliable beverage equipment
54%
52%
Timely and effective service and…
Great beverages / better quality…
44%
43%
Appropriate / better contract terms
Easy program to manage
30%
Better for the environment
Other
19%
1%
[% of respondents; more than one
response]
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Respondents do not identify a singular need they are seeking
a beverage program to satisfy. Many different benefits are
important – “morale,” “cost,” “great beverages,” “quick issue
resolution” and “enjoyable work break” were all rated
comparably:
Improve employee morale
Provide great beverages for employees
Foster an enjoyable work break for…
Reduce workplace interruption
Reduce employee safety risk
Reduce environmental impact
51%
75%
75%
74%
74%
72%
71%
70%
67%
66%
63%
Not
significantly
different
(95%
confidence)
[% very/extremely
important]
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In identifying the one benefit most important to their
decision, respondents selected a cluster of four (after cost):
“morale,” “performance,” “enjoyable break” and “better
health”:
Reduce company beverage cost
Help employees perform their best
Enable better health for employees
Reduce on-going time & effort…
Reduce workplace interruption
Reduce employee safety risk
5%
4%
3%
2%
2%
15%
13%
13%
11%
11%
22%
Not
significantly
different (95%
confidence)
[% chosen as most
important]
Reduce workplace interruption
Reduce on-going program mgt…
Reduce environmental impact
Reduce employee safety risk
2500+
Reduce beverage cost
500-2499
Resolution of equipment issues
50-499
Provide great beverages
10-49
Improve employee morale
Ttl
Help employees perform their best
Foster enjoyable work break
Enable better health
0%
5% 10% 15% 20% 25% 30%
[% claimed as most important]
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Consistent across segments (and consistent with a “health”
benefit), customers most seek delivered beverages that are
“clean & safe/ free from contaminants”:
Significantly
Fresh-tasting beverages
Delicious, great-tasting beverages
Beverages to help re-hydrate
Popular brand(s) of coffee
Natural beverages
Relaxing beverages
53%
50%
48%
47%
44%
75%
74%
71%
68%
64%
62%
81%
different
(95%
confidence)
Not
significantly
different
(95%
confidence)
[% very/extremely
important]
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After price, equipment (clean, reliable) and service are most
important program features, followed closely by quick
replenishment, great beverages and easy usage. Technology
(filtration and electronics) are least important program
features [complete ranking in Appendix]:
85%
83%
82%
80%
Not
79%
79% significantly
different
76%
(95%
75%
confidence)
Reasonable pricing
Quality and reliable equipment
No / minimal equipment breakdowns
Great beverages
Cup dispense capability
Ozone disinfection of water
Electronic displays & controls on equipment
49%
48%
45%
44%
42%
[% very/extremely
important]
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Most desired equipment capabilities include clean, reliable
and easy dispense, followed closely by capacity and warranty
protection:
Quality and reliable equipment
Equipment dispenses beverages easily
Equipment warranty
Minimal equipment noise
Choice of beverage equipment brands
Cup dispense capability
Ozone disinfection of water
Electronic displays & controls on equipment
49%
48%
45%
44%
42%
83%
82%
79%
75%
71%
71%
65%
61%
59%
56%
56%
[% very/extremely
important]
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Large company customers (500+ employees) exhibit a strong
interest in “enabling better health” for employees:
Reduce workplace interruption
Reduce on-going program mgt…
Reduce environmental impact
# employees at
company
Reduce employee safety risk
Reduce beverage cost
2500+
Resolution of equipment issues
Provide great beverages
500-2499
Improve employee morale
Help employees perform their best
Foster enjoyable work break
Enable better health
0%
5%
10% 15% 20% 25%
[% rated as most
Clean beverage equipment
Prompt service call timing
Quick replenishment of beverage supplies
Equipment dispenses beverages easily
Simple invoicing
Easy on-line order/re-order for products and service
Preventative maintenance program
Equipment service provided by certified technicians
Certified equipment
Choice of beverage equipment brands
Cup dispense capability
Ozone disinfection of water
Electronic displays & controls on equipment
85%
83%
82%
80%
79%
79%
76%
75%
71%
71%
71%
69%
65%
65%
63%
62%
61%
59%
58%
56%
56%
49%
48%
45%
44%
42%
[% very/extremely important]
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500 respondents, involved in the purchase or management of
their company’s water and/or coffee beverage program
Beverage programs are typically implemented in offices and
operations facilities, and the program decision-maker’s
functional area is most often operations-related
After price, service and equipment issues are greatest customer
dis-satisfiers in the industry today
Larger organizations (500+ employees) prioritize “enable better
employee health” as a desired benefit of a beverage program.
Smaller organizations are more price-focused and do not appear
to base purchase decisions on end-consumer benefits.
Customers universally place greatest importance on several
program features:
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Clean/safe beverages & clean equipment
Fresh beverages
Reliable equipment
Quick service & replenishment
JK, Not Yet
LOL, We need to know where we are going
#Future #downtheriver #yourbusiness #tappedout
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Advanced technology will drive consumer
confidence
Market maturity will drive consolidation
POU market share of drinking water industry
will grow substantially through 2017
Increased concerns over water quality will
drive usage from commercial to residential
Product technology will increase value to
performance options for consumers
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15% market share to mature at 35-45%
1,00,000 POU coolers to 2,450,000-3,150,000 at
maturity.
Residential solution will increase market
opportunity
Environmental concerns over landfills/recycling
Plastics and non renewable resources
Re-occurring revenue from filtration media and
service
Potable water quality to deteriorate
Cost of delivery for packaged water tracking with
increase fuel cost
Cost of technology to decrease with volume
The POU segment of water industry continues
to offer a good business opportunity for:
 Entrepreneurs looking to establish a solid
reoccurring revenue on a 5-7 year plan.
 Businesses looking to expand their product
offerings in Vending, OCS, Water Treatment
and Bottle Water.
 Companies offering environmental solutions.
 Companies offering residential services
 Retail water solution outlets
Robin Householder
PHSI
Email: Rhouseholder@Purehealthsolutions.com