March 2003: Volume 45, Number 3
WEB EXCLUSIVE: Creative Marketing—New Bridge to POU Spans ‘03 Housewares Show
by David H. Martin
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CHICAGO, Jan. 12 --If there was one thing apparent from walking the aisles at this year's Housewares Show gravity-feed filter bottles atop water coolers have become a key bridge to woo consumers away from delivered bottled water.
The new diversity of filter-bottle products now finding there way into mass channels, offers a remarkable number of choices and price points rivaling such established entry level point-of-use (POU) categories as pour-through carafes and end-of-faucet filters. Colors are hot in housewares, according to Lee Eiseman, a color expert who spoke at the Housewares Show. Emphasis is on metallic finishes (“home and chrome”) and Eurostyle products. These schemes were apparent in the expanding water cooler category at retail and even in some end-of-faucet filters and shower filters.
Bottled faces competition
According to the HomeWorld Business 2003 Census, retail and rental sales of water coolers rose from $84 million in 2001 to $95.2 million in 2002. Retail and rental units sales rose from 750,000 a year ago to 85,000 in 2002.
Three and 5-gallon bottled water was primarily a rental-based business until 2000. Today it is an emerging retail business that includes the typical hot/cold cooler for delivered bottles, but that’s just the beginning. Refillable bottles with gravity-feed carbon filtration, built into the necks, are expanding the retail market dramatically. Warehouse clubs and mass merchants, including office store chains, are the primary retailers. As evidenced at this year’s Housewares Show, marketers are adding countertop units in a variety of colors and features, including built-in cabinet refrigerators and even icemakers.
Elkay Watertech Division, Oak Brook, Ill., showed cabinet hot/cold water coolers with contemporary stainless steel and black cabinets and optional night-light. The company also offers custom design cabinet covers for original equipment manufacturer (OEM) customers. Joel Biterman, vice president of sales and marketing, said Elkay’s primary focus is on retailing its line of PureSmart coolers with its carbon block replaceable filters in the bottle. The PureSmart filter is rated for 150 gallons of water, a per-gallon price of 17 cents (vs. up to $1.25 per gallon for delivered water). The unit is NSF-certified to Standards 42 and 53 for taste, odor and lead reduction and is fitted with a proprietary performance indicator device (PID). Elkay’s hot/cold model with PureSmart retails for $179.95. Its cold/room temperature water model sells for $159.95. Replacement filters are $29.95. At Chicago, Elkay introduced its new PureSmart Kit consisting of one filter and a 3-gallon bottle with molded handle to facilitate refilling at the sink. Biterman claims the kit fits all Elkay and most other water coolers, thus opening up a new market for replacing more expensive delivered bottles with the PureSmart refillables. “We feel Elkay is at the front end of a new retail water dispenser business with near-infinite growth potential,” said Biterman.
Avanti Products, Miami FL, is an appliance importer with an expanding line of freestanding cabinet and countertop water coolers for delivered bottled water, including new mini models for executive desktops. The company also markets a replaceable carbon block filter cartridge that fits into 80 percent of existing 3-gal. water bottles, says Michael Flynn, vice president of sales. Like Elkay, Avanti now offers a Filter Kit, complete with replaceable 150-gal. cartridge and 3-gallon refillable bottle for $29.95 suggested retail price (SRP). New Mini desktop dispensers (offering cool/room temperature water), in bright cabinet colors, carry a suggest retail price of $29.95. “Users can refill the one-gallon bottle from larger office coolers, as needed,” said Flynn. Other conventional Avanti cabinet coolers feature a choice of a storage cabinet underneath or an automatic defrosting refrigerator compartment ($239 SRP). Still another, sports an automatic icemaker under the cooler. Avanti also showed a “radical design” cabinet cooler with storage cabinet and trendy platinum finish. Avanti sells coolers to K-Mart, OfficeMax and Staples. “We’ve seen a 30 percent increase in our water cooler business in the last year,” said Flynn, “and we're getting new interest from appliance retailers.”
Addico Products, Montreal, again showed its line of Addi high-style cylindrical water coolers in white or black. Units fit 3- or 5-gal. water bottles. The tanks are stainless steel with matching plastic bottle water covers and optional nightlight. New this year was Addi’s compact (16-1/2” high) 2.8-gal. thermoelectric countertop beverage cooler with NSF certified (Standards 42 and 53) replaceable carbon filter. SRP is $99.95 with replacement filters priced at $19.99. Koolatron, Brantford, Ontario, again showed its own thermoelectric countertop cooler with carbon filter. Aquaport USA, Chicago, showed a line of thermoelectric cooled mini-units in heights of 10-1/4”, 14” and 18” at prices ranging from $119.95 to $140 SRP. Ambiance International, Upland, Calif., showed an 8-stage imported gravity-feed filtration system for water dispensers that combine carbon with mineral pebbles, quartz and corral sand. The Water Gallery showed its line of ceramic Aqua Crocks with gravity-feed carbon filter.
Greenway Home Products, Waterville, Ohio, promises to become a major new force in retail water coolers and other POU products in the months to come. Greenway is a division of CFM Corp. , which markets woodstoves, fireplace accessories and barbeque grills. Greenway is positioned as CFM’s environmental product company “for the air we breathe and the water we drink.” It showed air purifiers as well as water-related appliances including a diverse line of water coolers under the Greenway and Polar brands. Coolers with hot/cold water were shown in platinum, stainless steel as well as white cabinets. Its high-end cooler features programmable electronic controlled temperature settings. Greenway also showed a “jug and filtration” kit for coolers, with self-piercing bottle collars and NSF certified carbon block filters. Greenway’s POU credentials were enhanced by the presence of the Vita-Pure whole-house ultraviolet (UV) system in its booth. The $899 SRP unit features stainless steel wiper blades to assure bactericidal efficiency. Greenway’s Michael Callen, director of operations, promised more UV models in the coming months including a cabinet water cooler which will integrate UV into the POU system.
Shower filters come of age
HomeWorld Business, in its 2003 census report on showerheads, paid notice to the relatively small sub-category of filtering showerheads. “Water filtering showerheads is another growing niche, Reduction of chlorine that can be damaging to skin and hair are prime benefits, although they can also help minimize hard-to-clean deposits on shower walls, doors and fixtures.”
The 2003 International Housewares Show had several exhibitors representing the shower filter category. Sprite Industries, Corona, Calif., was the sole exhibitor showing a complete line of filtered shower heads. shower handles and cartridges. The company introduced new EuroCurve hand-held filtered units and solid-brass Slim-Line filters that will look right at home in upscale bathrooms. Sprite also showed its Mediterranean Blue chlorine-neutralizing bath salts for the tub. Showertek scaled back its shower filter line from a year ago, choosing to focus on shower filters without showerheads, under the licensed Sunbeam brand. H2O International announced it would rebrand its Rio Vita showerhead under the Sunbeam brand, with a separate licensing agreement. Caraco International (Filtration Plus) showed a stainless steel shower filter with three sprays and an SRP of $259. Prime Water Group, Germany, showed a hollow-fiber membrane hand-held shower cartridge, said to protect from Legionnaire's Disease (see more later).
Faucet filters pound pitchers
Retail dollar sales of pour-through pitchers declined in 2002 to $69.19 million from $72.49 million the year before, according to HomeWorld Business latest census. Unit sales dropped from 4.09 million in 2001 to a flat 4 million in 2002. Faucet-mount filter dollar sales, on the other hand, increased from $68.8 million to $75.68 million over the same period. Meanwhile, faucet-mount unit sales jumped from 2.56 million to 2.86 million in 2002.
It was clear from the proliferation of multi-pack replacement filters shown at the Housewares Show, the name of the game is “Gillette razor blade” marketing from now on, for both faucet-end and pitcher categories.
Paul Schacht, PUR sales manager, noted that “IRI data confirms pitcher sales were down 15 percent and faucet filter sales up 40 percent. Sixty percent of dollar sales were faucet-mount vs. 40 percent, pitchers.”
PUR’s Schacht observed that while Brita has 80 percent of the filter pitcher market, PUR commands 80 percent of the end-of-faucet filter market. While both companies are represented in each category, PUR offers a far broader line of faucet filters, the fastest-growing category. The Procter & Gamble unit has eight base models in a variety of colors and finishes for a total of 20 at price points ranging from $19.99 to $44.99. Brita, the perennial pitcher sales leader and a division of Clorox, has only one faucet filter, priced at $29.99 SRP. PUR also showed countertop and undercounter POU units and is expected to debut new multi-pack replace cartridges in the near future, according to Schacht. Brita also exhibited in Chicago but declined to be interviewed.
Brita has always been the perennial advertising leader, reportedly spending up to $70 million on TV and print ads in some recent years. So far, this year, PUR is out-spending Brita heavily with 30-second TV spots that promote its faucet filters. But Brita has a history of outspending everybody in water treatment products and may still claim the title once again by year’s end.
PUR has moved to upgrade the filtration capabilities of both its faucet-mounts and pitchers. Its Ultimate pitcher now claims to remove a broader range of contaminants including total trihalomethanes (TTHMs) and pesticides. Packages for both PUR faucet-mounts and pitchers contain this strengthened health claim: “REDUCES CONTAMNANTS LINKED TO CANCER RISK.” Water Applications Ltd. (WAL) was the only other company showing pitcher filters in Chicago. In the coming year, the company will introduce a new pitcher with an electronic counter, said WAL’s Serg Heinich.
Waterpik, Ft. Collins, Colo., showed its line of faucet-mounts with new packaging. Its F-2 chrome faucet filter carries an industry-low $15.99 SRP. Its F-5 model, at $19.99 SRP, is the lowest-priced faucet-mount with lead and cyst reduction capabilities (NSF certification to Standards 42 and 53). The F-7, with “elapsed time” and “gallons used” indicators, carries a $29.99 SRP according to Waterpik marketing director, Stanzi Prell. A new 4-pack of Waterpik replacement cartridges is priced at $16. Waterpik also chose the Housewares Show to introduce the company’s first icemaker filter replacement cartridges, carrying SRPs of $18 and $25. Both are rated for 750 gallons. Model IF-31 is rated for taste and odor; model IF-35 for lead and cysts as well. The company sells POU into Lowe’s, K-Mart and other retailers.
Prime Water, mentioned earlier, is a high-tech developer of countertop water purifiers and shower filters. The company seeks OEM partners for its Prime Water products featuring Ster-O-Tap hollow-fiber membrane technology. Genesis, Toronto, showed its countertop distillers ($169 to $199 SRP) and a new travel filter with travel bag ($39.99 SRP). Caraco International showed its line of carbon block filter cartridges and a carbon/ceramic countertop POU system marketing under the NutriTech brand. Silver Lake Research, Monrovia, Calif., showed its packaged WaterSafe test kits, with separate test strips for a variety of contaminants, soon to include the first bacteria test strip.
About the author
David H. Martin is president of Lenzi Martin Marketing, of Oak Park, Ill., a firm specializing in water improvement and environmental marketing that integrates old and new media. He can be reached at (708) 848-8404, e-mail: email@example.com or website: www.lenzimartin.com
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