If you want to talk to someone with their finger on the pulse of the bottled water industry, talk to Germain Collazo. Collazo started off in the industry 12 years ago as a route salesman for Nestlé Waters North America, driving a delivery truck to bring bottled water to residential and commercial customers in the Stamford, Conn. area. Three years later, he took on the role of account manager for the company, and he now oversees the entire borough of Brooklyn, the largest borough in New York City, dealing directly with commercial clients from small privately-owned businesses to universities and hospitals daily.
While bottled water may be in the news often, with environmentalists pushing bottled water bans, nutrition experts pushing bottled water as the healthiest bottled beverage or bottled water selling out during the most recent natural disaster, it is the face-to-face interactions with customers that truly illustrate the drinking water trends on the ground, says Collazo.
Brand recognition is a driving force
Individuals and businesses have a variety of reasons for purchasing bottled water. Perhaps they like the taste better, their tap water is of bad quality or their well is contaminated, they are experiencing a water crisis like a boil water alert or a storm that has debilitated water infrastructure, they are a client-driven business that needs to serve high quality water to customers or a host of other possible reasons. But, according to Collazo, the number one driving factor behind bottled water purchases is brand recognition.
“The small business owner who you might think is trying to be very conscious of his spending could very well be that one person who's a … bottled water lover,” explains Collazo, acknowledging that certain brands are much more recognized and sought-after in certain regions. “And that even translates to some of the larger [companies] as well. Some large companies, whoever the decision makers may be, it really comes down to the preference of the people they’re providing the water for."
For anyone in the bottled water business, those with brand loyalty are easy customers; they know what they want from the get-go and they are sure to be long-time customers. But, a variety of changes inside and outside the bottled water industry have made many customers without this staunch brand-loyalty reconsider their use of bottled water.
Playing into the filtration game
“[Filtration] is probably the single biggest business change that we’ve had to adapt to,” says Collazo of the bottled water industry in the past five years.
The change of focus within the bottled water industry was initiated most dramatically during the recession, Collazo explains. Around 2008 or 2009, customers were tightening their belts, with less disposable income for “extras,” which often included bottled water.
At that point, business owners and even individual customers started to reexamine these extra costs. The daily or monthly purchases of bottled water were often put under scrutiny, and people started to look at how they could get high quality water without the investment of space, money and resources that bottled water represented.
“As business owners became educated about green concepts and they decided they wanted their valuable office space back, cost savings became a big concern also. Around the financial downturn in 2008 and 2009, this put a lot of our customers in a situation where they educated themselves on filtration, [including] point-of-use,” Collazo explains. “Sometimes if it’s a cost savings concern and water is also being provided to the patients or clients coming into the offices, they [also] may look at filtration.”
“Of course, it also meant that we had to take that part of our business a lot more seriously,” continues Collazo. “So we got our technicians factory-trained, we started looking at some of the manufacturer relationships we had, we started looking at upgrading our equipment. And, sure enough, this end of the business has really taken off.”
Now, when he goes on sales visits, Collazo makes sure to educate customers on filtration, even if they clearly prefer bottled water. He explains that a number of factors can influence even loyal bottled water customers to look at filtration and when they do, they should know that his company, like many bottled water companies, offers that option now.
“That’s part of what my job is — make sure they know that we have that service,” he adds.
Looking toward the future, Collazo believes the industry as a whole will continue to diversify into the filtration business. “I do believe this is going to be a continuing trend. It’s a very competitive market and it’s definitely, for the cost-minded professional business owner, a more viable option than it was nine years ago when I first got into sales,” he explains. “I do believe filtration will continue to be a big part of our business and I think that we’ll continue to grow it exponentially over the next five years. And, I think the industry will continue to stay that way, too.”
Many people are aware of the bottled water bans being proposed across the country or “green” activists who are against drinking bottled water for various reasons. The International Bottled Water Association regularly publishes reports detailing such things as the amount of water used in the production of bottled water (about 1.39 liters for every liter of finished bottled water) or the documented health benefits of having bottled water as an option over other bottled beverages to combat the idea that the bottled water industry is not sustainable. According to Collazo, that concept is far from accurate.
“A lot of what these ‘green activists’ in many parts of the country are reacting to when they want to push bottled water bans, it's really what I think is just not being educated enough on the subject,” he says. “As far as bans are concerned, they worry about the transparency; 'are you guys really depleting these aquifers where you harvest bottled water from?' And, the truth of the matter is, we are stewards of sustainability and working with the community and doing everything by the books.”
The sustainability debate aside, it is obvious that bottled water is an ever more important option for those without an unlimited supply of accessible, potable water, both in underdeveloped areas outside the U.S. and within this country when drought or natural disaster takes its toll on the water supply.
“All I know is that when there's a crisis, when there's a drought, when there's a water main break … people go to the stores and they're buying bottled water. [This] helps bring visibility to the importance and the need for bottled water,” Collazo says. Despite the industry’s diversification into filtration and the pressure of environmental groups, concludes Collazo, there will always be a place for traditional bottled water in the market.