January 2003
Volume 45 Number 1
 

Forward 2003: Whither Goes POU/POE in the Larger Water Treatment Industry?
by Peter Censky   Pages: 

The water industry’s immediate future will be simply a straight-line projection of what has been happening for the past few years. The problem is a lot of people I talk to have been denying the changes that have been happening, or fighting them in their own minds. That’s a dangerous thing to do. Reality is what it is; we have to deal with it. Let’s examine a little of that reality.

First of all, let’s talk about this industry. We’ll start out with the first dose of reality—this isn’t an industry. Bottled water is not an industry. Neither is POU/POE… nor commercial water treatment… nor municipal water treatment. None of them are separate industries.

We are all segments or channels to market or specialty markets—but none of these segments qualifies to be an industry. The true water industry is something much larger. It encompasses all of these segments and others too. It’s important to understand this because it has implications for every business in every segment of this industry.

The "true" water industry is coming together fast and furiously. GE's purchase of Osmonics in November is just another small chapter in the continuing consolidation. What happens in the consumer market eventually percolates upward into the commercial and industrial (C/I) markets, and what happens in the C/I markets eventually leaks down into the consumer market. Everything is interconnected or soon will be. For example, if we can’t fix our salinity discharge issue at the household level then eventually the municipalities will fix it at the source level—and the market could evaporate.

There is a new wave of consolidation taking place, but this consolidation is different from the past. Then, companies were just buying up other companies and either merging them into existing operations or running them "as is." Now, it’s different. Companies are trying to figure out how to rationalize the various businesses they own. Fitting a dealer business with a retail business with a commercial business is a lot tougher than it sounds. Yet there are certain common denominators:
• Much of our equipment requires on-site service and expertise. So the idea that dealers are a dying breed isn’t entirely valid. But there is some truth to it. Dealers have to change to survive. Here’s a clue—if you're still doing business today the same way you did 10 years ago, you are in trouble!
• Training, education, certification—repeat—training, education, certification. This is the mantra. Product quality, customer satisfaction, profit—these are all controlled in the end by people on the ground with the customer. You can’t judge your business by your home office. Dealers, service people, downstream resellers—these are the people who control your quality, customer satisfaction and profit.
• There's latent demand building up in our economy for clean water options. That’s the good news. The bad news for some is that recessions have a way of restructuring an industry. Rich Clack, of Clack Corp., tells the story about the lawnmower industry. It entered a long drought (and its own private recession) and, when it came out of it a few years later, dealers found that new manufacturers had entered the business through the retail channel. Gone were the old style lawnmowers that would last 12 to 15 years (with dealer service, of course). Now the consumer could buy a mower for less than $200 dollars, use it for a few years, throw it away and buy a new one. There’s a lesson here. It’s already happened to the household water market.

All demand is ultimately consumer demand; and the studies I've seen suggest that, as attitudes change, so too will sales pick up. The latent demand for our products is incredible. There is a realistic, strong potential that some day soon nearly every household will have more than one water treatment device installed or in use. And this will naturally extend to offices and other commercial entities. Industrial water treatment, desalination, high purity and many other specialty applications are already widely accepted. Yet the growth potential for them is huge, too.

Someday soon we are going to be an industry. And when that happens the WQA will be serving the needs of its members in these many and varied channels, markets and applications. Why? It's simple. Companies like yours cannot afford to belong to three, four or five different associations to represent your needs. This kind of duplication is not only costly; it works at cross-purposes with your needs. Now is the time for all of us to come together for our own good.

About the author Peter Censky has been executive director of the Water Quality Association since 1987. The WQA can be reached at (630) 505-0160, (630) 505-9637 (fax), email: info@mail.wqa.org or website: www.wqa.org


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