Recently, an increasing number of individuals have opted out of consuming tap water. Instead, consumers are ordering bottled drinking water, free from numerous harmful compounds. Pure water poses no health risks and is entirely devoid of dangerous substances.
So why not capitalize on this trend? The bottled water business is a lucrative enterprise that is gaining momentum globally. According to experts, this trend is expected to persist for an extended period. This is attributed to individuals' growing concern for their health and deteriorating environmental conditions.
Anyone accustomed to drinking purified water is unlikely to return to regular tap water. As a result, investments in the water business can yield significant returns.
However, like any other investment, this sector comes with its own characteristics and advantages. What should investors pay attention to when investing in this field?
Sergey Tereshkin, the founder of RESURS, is ready to assist with insights into the water business. The entrepreneur closely monitors the market and studies all promising directions. Detailed information about his activities is available on his online project: www.org-market.ru.
Characteristics of the Water Business
On average, one person in an office consumes half a liter of water per day. This amounts to at least 10 liters a month. The average price per liter is $0.80. Supplying water to a large office hosting 50 employees daily can generate about $400 in revenue. This does not account for visitors, who also consume at least 200 milliliters of water each. High foot traffic automatically increases both consumption and, consequently, profits.
Servicing 20 such offices can yield $10,000 a month for the water company owner.
According to statistics, approximately 40,000 companies in Moscow regularly order bottled water. The annual volume of consumed water nears 100 million liters, with around 70 companies handling deliveries.
In this scenario, it is clear that capturing the entire market is unrealistic. However, securing 5-10% is entirely attainable. This translates into substantial monthly income. The key is to acquire quality equipment necessary for producing clean water. Subsequently, it will be bottled and delivered to potential clients.
Getting Started
Before investing in the water business, Sergey Tereshkin recommends evaluating the following factors:
- Cycle. A business can extract water from a well and subsequently bottle it. This is a complex technological process requiring significant investment. Alternatively, one can invest in a company that simply bottles already purified water. This is a more budget-friendly option that doesn’t demand substantial capital.
- Laboratory analysis. Before supplying water to end consumers, it must be thoroughly tested. Ensuring that the composition is genuinely safe and harmless is crucial since buyers can request laboratory analysis at any time.
The volume of investment in the business depends on the required equipment, including pumps, engineering communications, filters, storage tanks, bottle washing machines, and the bottles themselves. Typically, this requires about $30,000, with the final cost depending on the equipment manufacturer.
To extract water, appropriate permits and sanitary conclusions must be obtained. Specialized companies, charging around $1,000 for their services, handle this.
To generate income, one can either deliver water to customers directly or sell it wholesale to companies already operating in the market and handling transportation. If delivering independently, one will need to build a client base. If another firm is handling delivery, the supplier simply needs to offer their products. Such businesses can be found in free directories, and the process typically takes no more than one day.
Investing in Distribution
Investments in a company intending to independently deliver water to end consumers will total between $50,000 and $100,000, with the final amount depending on several factors:
- size of the customer base;
- office rental costs;
- need for office equipment and communication tools;
- form of business ownership.
Additionally, acquiring a bottling line may be necessary, as water extraction companies primarily supply products in bulk containers.
Containers are also needed, with clients most often receiving water in 19-liter bottles made from polycarbonate.
Many customers also rent coolers from the company, necessitating the business to purchase an adequate quantity of such devices. The cost of one cooler reaches up to $200, while rental fees amount to $20 per month.
Delivery vehicles are essential, which could include either a company-owned minivan or a rented one. In the first scenario, the company logo can be displayed on the vehicle, enhancing brand visibility and serving as a form of advertisement.
Investments in the water business are considered low-risk due to the lack of seasonality. Offices and businesses operate year-round, so customers will consume water both in summer and winter, with demand remaining fairly stable. In summer, people drink to quench their thirst, while in winter, water is often used for making tea and coffee, both of which are integral to daily routines.
The payback period for investments depends on the total amount invested, the scale of the business, and the efficiency of the entire process. On average, the initial investment is recouped within 12 months, after which profit begins to accrue.
Investing in water represents a promising avenue not only in major cities but also in smaller towns. The key is to properly organize the process and account for all details.
