Volume 43 Number 10
Breaking the Ice in Canada: Reaching for Stratus Water Inc., of Caledon East, Ontario
Looking to make his mark in the water treatment industry, Gian D’Angelo, of Canadian-based Stratus Water Inc., has hung his prospects for the future squarely on the shoulders of the residential market. The president and owner of Stratus Water relies on that particular sector of the market for 99 percent of his business. Realizing he’s a new kid on the block -- the Caledon East, Ontario, business was launched in 1999 -- D’Angelo knows the next couple of years could make or break him.
“The longer we’re here, the more people trust us. People want to see if we intend to stay around,” he says. “We try to make them feel comfortable. That’ the whole reason we opened up a storefront.” The locale was inaugurated in August 2000, along with a complete product line.
Roots in the family
“We’ve always had a stake in water,” the 25-year-old, who graduated from the University of Guelph, Ontario, with a bachelor’s degree in marketing and business administration, says. “We were investors in a bottled water company. When I came out of the university, the opportunity was there to head this company. I chose to take it and I’m not regretting it one bit.”
Speaking with D’Angelo, one gets the impression that the idea of a storefront is one he took very seriously -- and still does. He says it brings a sense of legitimacy to his business in an industry that’s often marred by those who work out of a makeshift “store.”
“I don’t mind competition from the guys who have a place of business. But you have a lot of guys working out of their garage. They’re low-balling equipment. With those guys, it’s hard to compete,” he says.
“In the beginning, we tried to give people a break on the price. But I learned quickly that we don’t have to do that. People that would only buy based on the price, I don’t want their business” since they often don’t tend to be loyal customers.
A place to call home
Aware of other companies who have expected growth too soon and hired more people than necessary, D’Angelo has been very cautious in this regard. Including D’Angelo, Stratus has two full-time employees; the other is a service technician. Last June, he was compelled to bring on two part-time salespeople. D’Angelo is uncertain how long it’ll take for them to become full-time hires. The caution flag is definitely out.
“We started with two people. We started small for a reason,” he says. “We didn’t want to blow our brains out for the first half of the year and not be able to handle it.” The strategy seems to be working. D’Angelo expects Stratus to experience a 75-to-100 percent increase in 2001 over last year.
An influx of players
“You have the big box retailers who are getting into (the industry) a lot heavier up here. It’s kind of discouraging. They are starting to carry UV, RO and water softeners. But people forget that someone has to install and service them,” he says.
“You’ll always have people who buy at Home Depot just based on price. But you’re also going to have 1,000 people for every 100 people who buy there, who want to come to a water treatment dealer. They’re looking for someone with knowledge. I would rather have a small customer base and service those customers once a year than have a price war with Home Depot.”
Pass it on
A member of the Water Quality Association who’s studying to become a certified water specialist, D’Angelo encounters his share of problems with water, be it from municipal or private sources. Public water systems usually have hardness with chlorine frequently hovering around 2 to 3 parts per million (ppm). He recommends a carbon solution in the basement for a whole house solution, or an RO unit for drinking water purposes. On the other hand, East Caledon is a rural area -- about an hour north of Toronto -- that has 2,200 homes, according to D’Angelo. Brutal winters translate into a huge amount of salt being used on the roads. As a result, well infiltration from runoff is rampant. He says spring is the worst time of year for runoff.
In this respect, D’Angelo gets an assist from the provincial government, an entity that has come under great scrutiny in the aftermath of the E. coli outbreak earlier this year in Walkerton, Ontario (see Extra). He explains, “In Ontario, the health department tests for bacteria on private wells for free. So, we already know when we go out there if UV will be necessary. Hardness and iron are the major problems. In most instances, you are looking at three pieces of equipment -- a pre-filter, softener and a UV system.”
Stratus Water Inc.
Owner and president: Gian D’Angelo
Founded: Incorporated in 1999; present location opened in August 2000
Staff: 4; one service technician and two part-time salespeople
Sales: Revenue in 2001 expected to be 75-to-100 percent increase over last year
Quotable: “There’s really a mix of (customers). You have the people that are concerned with health and drinking water. They understand basic concepts like hardness. With other people, it all comes down to price. They would rather go buy a piece of equipment at Sears. But with the (higher) price comes service and the fact that it’s coming from a water treatment dealer.”
Extra—Sharing the Load in Walkerton