Concerns about the quality of municipal water have caused many people to use bottled spring water for drinking and cooking. Municipal water in some areas has been shown to contain trace elements of harmful chemicals from industrial or agricultural activities. These chemicals over many years have seeped into the water table. Municipal water may also have bacteria, and the ageing pipes in some cities can result in minerals getting into the water that affect the taste.
- Skill level:
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Things you need
- Spring water source
- Bottling equipment
- Expense forecast/business plan
- Start-up capital
Secure a spring water source. The purest spring water is generally found in remote areas far from industry and commercial development. Spring water bottling companies lease the rights to pump the water from the owner of the property on which the spring is located. It is critical to secure a long-term lease, with the help of an attorney experienced in water rights issues. The two most valuable assets a spring water bottling company has are its water leases and its customer base.
Decide on a business model. Spring water companies distribute their products both to retail stores and directly to residential customers. Each presents its own challenges. In retail stores, you will be competing against larger bottling companies that might have had relationships with the stores for many years. Residential delivery involves considerable marketing expense in the beginning to tell customers about your product and build your customer base.
Create a brand image. As with any consumer product, your company's brand image, including the design of your packaging, is critical to your success. You need to think of a theme for your advertising and packaging that you want consumers to remember. Often, bottled water companies emphasise freshness, purity, pristine mountains where the water is found, and other themes involving the health benefits of spring water.
Secure capital for your venture. A bottled water company is relatively capital intensive, and major expenses incurred early on include the cost of leasing or buying bottling equipment, leasing delivery trucks, leasing space for production, warehousing and administration, purchasing an initial inventory of bottles, and the marketing costs to launch your venture. Do a detailed forecast of these expenses, using numbers provided by the suppliers you have chosen to do business with. Create a business plan describing your venture to present to prospective sources of capital.
Set up a bottling facility. Because the public will not be visiting the bottling plant, it can be located in a part of town where the facility lease costs are low. You need to take into consideration the miles your trucks will travel to bring the fresh spring water to the plant, and then to deliver the finished product to customers. Fuel costs are one of the largest variable expenses of a bottled water company.
Tips and warnings
- Make certain you start with about 20 per cent more capital than you forecast you will need, to take care of the unexpected expenses that crop up in any new venture.
- Secure a back up spring water source in case the water flow from the first spring declines over time.
- Because the products are consumed by the public, bottled water companies are subject to rigorous state Health Department regulations, including periodic inspections. Issues such as the cleanliness of the facility, and the process used to wash the bottles are important to maintaining a clean record with the Department---and staying in business.
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