Bottled water, including spring water, is an enormous $7-billion-a-year industry. Anyone with unrestricted access to fresh water has probably thought about bottling and selling it at one time or another. Bottled water history may have begun with a couple of small companies, but today, the market is dominated by just a few large companies, like Nestle, Pepsi, Coca-Cola and Cott. To compete on a national scale with these giants, you will need an enormous amount of capital, or you will need to start small and expand production as your business grows.
The cost of water is really nothing compared to the costs of bottling, storage and shipping. Water is heavy, and fuel is necessary to truck it around. Additionally, you will need production facilities, distribution channels and agreements with retailers or wholesalers who will then sell your water to thirsty consumers. It will be important to hire an engineer to oversee your bottled water production process.
You will need to ensure you can charge enough per bottle to make up for all of these costs. If your plan is to sell premium spring water, keep in mind that water is a commodity, and sales usually go to the cheapest bottle. The design of your labels and your marketing will only take you so far.
To get into this industry, you will likely need to start slowly. Approach small retailers like convenience stores or gas stations before going after major chains or grocery stores. The majority of bottled water is actually not sold in grocery stores. If this fact surprises you, consider investing in an industry market report to find out what sells, what doesn't sell and where your best opportunities for profit are found.
To qualify as spring water, your water has to come from a spring. Selling municipal tap water is permissible in most places provided you have a permit, but if it doesn't come from an underground source, it cannot be labeled as spring water.
Clean water is an important natural resource that is controlled by the state. Even if you own the property and its water rights, you will need to contact the government before you begin siphoning water from the state's water table. In Minnesota, for example, you will need a Water Appropriation Permit from the Minnesota Department of Natural Resources if you plan to withdraw more than 10,000 gallons of water per day or 1 million gallons per year from any water source.
Before you can start selling spring water, you will need to have it tested in a manner that conforms with state requirements and those of the Environmental Protection Agency. Contaminants in water include:
- Microbiological: including bacteria, yeast, viruses, algae, molds, etc.
- Inorganic: includes all elements and chemical compounds aside from those containing hydrocarbons
- Organic: includes compounds with a carbon-hydrogen structure, including pesticides, petroleum byproducts and other chemicals
- Radiological: elements that emit radiation, like radon, radium and uranium
The requirements for bottling and selling water are regulated by the federal government, including the Food and Drug Administration and the Environmental Protection Agency as well as each state and in some cases, your city or county governments. Once you have met the requirements to bottle the water and sell it in your state, you will need to go through a similar process for each state where you plan to sell the water.
Most states require that you be certified before you can sell water there even if you produce the water in another state. In New York, for example, you will need to submit the following to the department of health:
- A statement of approval from your local regulatory authority approving you to bottle water for human consumption
- An engineering report of your facilities prepared by a registered engineer
- Sample bottle caps and labels
- Your recall plan
- Names, addresses and telephone numbers of your distributors in New York