I turned on the faucet today and clean water spewed from the tap.
But not everyone has that luxury — especially 300 million Africans who rely on a series of filters and bottled goods to get clean water. More than a handful of companies have aimed to address the clean water supply on the second most-populated continent. One company, Blue, offers “Waterpods” that equip retail stores with a mini version of a water kiosk. Now their ‘wares are in over 100 stores across half a dozen countries.
Grit Daily caught up with Blue CEO and co-founder, Anders Jacobson, to drill down on the opportunities he’s addressing.
- By way of background share the numbers. How acute is the “water problem” you’re tackling?
The water problem we’re tackling in Africa is in fact three problems: the first is access to affordable, safe drinking water; the second is the growth of bottled and sachet water sales in response to the first and the third is lack of plastic waste recycling able to handle the second. The net result is that those who can’t afford bottled water are risking their health and those who can are contributing to an enormous amount of plastic waste escaping into the environment.
By some estimates, over 300 million of Africa’s 780 million people don’t have access to safe drinking water due to factors such as increasing urban concentration, old and deteriorating water treatment and distribution infrastructure and the relatively high price of effective household water filter products on the continent. In response, sales of single-use plastic pre-bottled and plastic sachet packaged water, in sizes typically between 250ml and 10 litres, have increased dramatically as people look for ways of keeping themselves and their families safe from untrusted and unreliable tap water.
The problems with bottled water are many and well known, but chief among them in Africa is affordability due to limited choice. On a street corner in Harare, two 500ml bottles of water can cost as much as $1. This in a country with an average daily wage of $10 per day and occasional outbreak of Cholera from contaminated tap water.
The Waterpod is a solution that uses water purification technology and “internet-of-things” GSM connectivity to decentralise drinking water treatment to a network of shopping outlets, thereby enabling shoppers to refill their own multi-use drinking water containers and pay by the litre for the safe water that they need. By only paying for the water and not the plastic packaging, transport and centralised bottling-plant capital, all three problems are addressed at the same time. The price of purified water refills from a Waterpod offers an 80-90% discount compared to bottled water, single-use plastic is eliminated as shoppers use multi-use bottles and less plastic finds its way into the environment as a result.
- Why focus on Africa?
In circumstances of acute need, people can be at their most innovative. Entrepreneurs in Africa have a remarkable combination of creative spirit, market insight and tenacity which together hold potential for delivering solutions to global problems, not just African challenges. With our focus on not only technological but business model innovations in the water sector around the world, Africa is an ideal region to seek out, identify and work with such entrepreneurs who are developing models and approaches that can be more widely applied to other areas of need.
- What are the existing solutions?
The water purification and refill offering is not new in Africa and a number of organisations have developed the “water kiosk” offering by building what are essentially drinking water purification franchise shops.
The problem with this approach is that it has limited scalability given the relatively high fixed-capital cost of building brick-and-mortar water kiosks to house large, semi-industrial water purification systems. Together this delivers a relatively slow return on capital in what is a higher risk investment environment. As a result, there are too few water kiosks to serve very large populations as people have to travel to reach them and the cost of travel means that they have to either use whatever tap or surface water source they currently have closer to their homes, or put the price of transport towards bottled or sachet water from a closer grocery store.
- What’s different about what you’re offering?
The Waterpod is designed to offer purified drinking water refills through the same network of formal and informal grocery stores where people buy all of their food, drinks and household products. There are over half a million such stores of all shapes and sizes across sub-Saharan Africa forming a powerful network of reach. By incorporating the best suited water filtration technology for different parts of Africa and using the I-Drop Water GSM (internet-of-things) network technology that connects all Waterpods to a bespoke online monitoring and control platform, shop owners that have access to almost any water source within their stores can now sell purified refills of as high a quality as larger, brick and mortar water kiosks. In a sense, the Waterpod miniaturizes the water kiosk into the size of a vending machine or soft-drink fridge – both of which are common in retail chains across Africa.
- Who holds the IP? Who is the “inventor?”
The inventor of the Waterpod is a member of the I-Drop Water team in South Africa. I-Drop Water team received a substantial capital injection from Blue, a Stockholm-based investment company that serves as a catalyst for sustainability-driven innovation via one of the companies it owns, Bluewater, a world leader in water purification tech and solutions for homes, business and public dispensers. The I-Drop Water team has spent almost four years testing various early iterations of the Waterpod in 6 countries from Senegal to Swaziland during which time the I-Drop GSM platform has yielded millions of data-points offering a valuable and unique insight into the latest form of the recently unveiled Waterpod.
The IP is a combination of features, some are patent-pending and others held as trade secrets – the combination of which enables the Waterpod to deliver not only a high-performance purification standard, but an affordable and cost-effective commercial offering. Key to this is the proprietary communication backend and front-end monitoring and control platform through which each Waterpod can be accessed in real time through a normal web-browser from anywhere in the world. Through this platform, problems can be remotely diagnosed and in some instances fixed without the need to send technicians to often remote locations. The saving in capital and operating expenses is what enables this product to offer purified water refills at such a significant discount.
- How many retail locations are you in now? What does the revenue picture look like?
With this latest version of the Waterpod, which incorporates almost four years of development and learning in the market, the plan is to drive rapid and aggressive growth into retail channels across the African continent and, potentially, to bring this product through the Blue network into new markets around the world.
The launch of the product on Wednesday evening with the team in South Africa signaled the green-flag for rapid expansion of market reach and the response from retail chains and independent shop-owners in South Africa has already taken the business by surprise. This is very clearly something that the market has been waiting for.
To date, earlier iterations of the Waterpod have been placed in over 100 stores, primarily across South Africa but also in Zimbabwe, Botswana, Namibia, Ghana, Senegal and Swaziland. Over this time the revenue line has grown considerably with demand in some stores doubling and doubling again as the market need becomes more acute and awareness grows around the offering. We anticipate continued growth in revenue from existing stores as well as aggregate revenue growth as the network of stores grows in parallel.