Refreshing Africa’s Thirsty, A Growing Sector For Long Tie
The need for fresh water is continually growing all over the world as fresh water sources are limited and there is need to process available water for human use. Africa’s Urban populations are continually growing and there is growing need to improve different cities’ water supply systems as governments continue to privatise public services. Opportunities in this sector range from the processing of sewerage to removal of chemicals used in a city’s water purification systems for bottled drinking water. Trends in the sector internationally are for systems that do not use such chemicals.
In Africa, the problem is further exasperated especially in rural areas where piped water may be rare and people have to walk miles in many areas to get water not only for drinking but also for household use. Only about 6% of water is actually used for drinking, the rest being used for cooking, cleaning and bathing.
When looking at water business, the prospects are huge; from digging of boreholes, rain harvesting, water preservation systems, water pumps, and water recycling. These are just a few of the areas one could explore. Africa’s needs are expected to steadily increase and not reduce due to the importance of the sector worldwide, technologies that improve water use, processing and conservation attract investment. . From working with architects in planning water recycling systems to developing detergents and washing systems that save water, there is a lot one can do in this area.
Exploring what is being done in industries on the use of water in both developing and developed countries and all those in between will give you an idea of what opportunities you could explore. In this particular section, we discuss the business opportunity on purification of water for drinking purposes in Africa. Note that most of the critical success factors are applicable to water processing business whatever aspect you’re looking at whether it is the equipment, technology or bottled water.
KEY SUCCESS FACTORS FOR BOTTLED WATER BUSINESS
Capital and Operational costs in relation to capacity; this is very important as water are a basic commodity that ought to be affordable for most people. Whether looking at processing venue i.e. location, transportation, technology to be used this is a very important cost to keep in mind. Getting this right will result in profitability and you can start getting a return on your investment within your first year. If you get it wrong then it could easily turn your business to a charity. This is because water is a volume business. To get to break even you need to sell a significant amount to cover operational costs and initial capital costs.
Branding; Your branding will play a significant role especially if you are selling your water in supermarket shelves. People want safe drinking water and your branding should show that water is safe to drink. This is from the bottling used, the display of certifying bodies in your country and how clear the water looks from the packaging. This is why blue and black work well in branding for water products as the clarity f the water shows is emphasised. Developing your brand also allows you to move a variety of products into the market that will compete at different levels. For example having simple pure water for a lower income group and spring or flavoured water for a higher income group.
Certifications; ensure you register for all required health and environmental certification required in your country. This ensures that the quality of your product and sourcing is not questioned. It also allows you to display the necessary badges of certification o n your product giving it the credibility it needs without the buyer having to think about it thus quickening the decision-making process. Health certificates are both for your business and also for each employee in the production process.
Location; this will determine your sourcing and cost to market. You need to strike a balance between the two and see the impact on the cost of production and pricing. If you are sourcing from a spring chances are that you will be far from market however you can attract a higher price though not move the same volumes as you would if you are using the cities public water system and just offering basic drinking water. However note that is you are near the target market, then you will be able to move more at a lower cost.
Source; technology used is determined by pathogens and impurities in the water source. It will then determine the cost of your product. If your source is tap water then the technology will be less complex than if it is a borehole or a river downstream. The source may also influence your target market. You can aim for a higher market group with spring water as it tastes better than with processed tap water as people will pay more.
Technology; ensure you get the right and latest technology for what you need. With changes in technology buying the wrong equipment or spending too much on what you do not need may result in unnecessary capital outlay than you need. By accurately determining your need and market you should be able to get technology that you can build onto as you build your market share. In this as with most business, it is better to have too much demand for your capacity than too much capacity and no demand.
Convenience; water is generally heavy whether it is carried in a small bottle in a handbag or as a ten-litre bottle for home or company use. Your business model will determine how convenient it is for your client to do business with you and the design of your packaging determine how easy it is to handle your product. Delivering your product to your clients is a great convenience and will encourage people to do business with you.
Once delivered your client will need to change the bottles from a dispenser. How your page is designed will make easy for them to install or difficult. When looking at smaller bottles, the design will determine how comfortable it is for the individual to carry in their hand (or handbag). Such design features can especially drive sales at a supermarket shelf. Most people who already are paying for drinking water will not mind paying a little more for a design feature that makes carrying your product convenient.
SOURCES OF BUSINESS FOR YOUR BOTTLED WATER
The sources of business for your are as varied as places people go to and visit where people pay for food and drink directly, where food and drink are consumed to where people expend themselves more than usual. Given this places where you can get business include;
a. Retail outlets; supermarkets, kiosks, pharmacies
b. restaurants and eateries; these go with the food. The best places to target would be fast foods as they move their products fast and often look for well priced good quality. You will also tend to get your feedback pretty fast as they do not stock lots of brands so getting a place assures you of income for as long as he outlet is open.
c. Parties; Especially for those who do not want to drink alcohol, flavoured waters are a great alternative to plain water may be difficult to drink and many are getting off carbonated sweetened drinks.
d. Marketplaces; these tend to be busy and sweaty and people need to drink water. Travelers will also want to buy water for their trip. Tap into the distribution system in these marketplaces i.e. where hawkers buy their merchandise and you are assured of having marketers working for you 24/7
e. Hospitals; Good drinking water is essential in any medical facility. The advantage of getting into a health facility is that clients who associate you with getting their health back will continue to use your product as they deem it to be healthy. It is an association that may be subconscious especially is they experience it for the first time there
f. Sporting Events and heath clubs; these also provide a good place to advertise
g. Institutions; schools, offices
LICENSING AND TAXES
While this may vary from country to country. The most common licenses will include health because you are producing a consumable product and environmental licenses because you are manufacturing. Additional licenses especially if you are sourcing from open water reservoirs are from your local environmental authorities.
Consult your local tax experts for tax implications as some businesses in the industry may be exempt to encourage water availability especially among rural communities. This will depend on your business model.
Feel free to ask questions, share your thoughts on the posts and on any programme that is working in your region or country.