There are thousands of bottled water companies in the United States. Some are selling 16.9oz case water, some mineral water, but Water One primarily sells 5-Gallon purified water. The 5-Gallon market used to be saturated by hundreds of different companies and over the years, only a few small companies remain, Water One included. The 5-Gallon purified water market is owned primarily by 3 companies:
Primo Water - Hinckley Springs, Crystal Springs, Mountain Valley, etc...
BlueTriton Brands - ReadyRefresh, Ice Mountain, Zephryhills, etc...
Culligan - Local Dealers
The purified water segment holds the largest revenue share of more than 40% in 2021 and is expected to grow year over year. Looking specifically at 5-Gallon water, in 2021, the estimated market size globally sits at USD 7 billion. Looking at the largest two 5-Gallon companies, Primo's market capitalization as of 02-22-2023 is $2.64B, and Nestle sold it's water segment to BlueTriton in 2021 for $4.3B.
Unlike single-use water bottles, 5-Gallon water jugs are reused regularly. Water One achieves this by purchasing high quality bottles that have a long life span. During production, the bottles are inspected, rinsed, and sanitized each time before purified water fills the bottle. The 5-Gallon market continues to grow as busy people do not want to purchase numerous cases of bottled water and the labor that comes with that. A lot of people see the 5-Gallon water delivery service as useful and more practical.
Now the issue at hand is the cost associated with having water delivered. Over the years, as companies have consolidated into the "big 3", the market has less competition, and suppliers start seeing their average selling price (ASP) go up due to competitors not bidding on customers. A good example is cable companies. When you live in an area with two cable companies, they fight for business with each other. In some places there is only one cable company and those households/businesses pay significantly more than an area with two companies. At Water One, we've started to see this trend, and the savvy buyers are noticing.
Looking at a Primo Water invoice dated 05-24-2022, we can see they're charging $12.99/5-Gallon jug for this specific customer. Underneath this charge, there is a $10.45 delivery fee. Now this isn't the case for everyone using their service, but it's interesting that in certain markets, they are able to sell 5-Gallon water for 2x Water One's standard price. Our research shows that ASP increases as more technology is introduced to the customer. An example being automatic credit card payments paired with email invoicing. A lot of these customers will never look at their credit card bill, and never look at their emailed invoice. Customers in these situations tend to have their price raised by 200% before noticing.
It's important that 5-Gallon water drinkers understand the price that they pay, and understand the vendors around their home or business. Just taking a look at your bill can save you money. We took a look at our new customers that were added in 2022, specifically the ones that have switched to Water One from competitors and found that a lot of these customers were previously paying >$9 a bottle. After doing the math, customers are saving an average of $21.16/month after switching to Water One.
Our recommendation for everyone drinking 5-Gallon water is to simply check your bill, and compare local vendors around you. If you are happy with your service, but see another vendor charging less, try to negotiate with your current supplier. Inflation has taken a toll on everyone this year, and this is the perfect time to tidy up monthly expenses that might have gone unnoticed.