August 2003: Volume 45, Number 8
Showered in Filters with Sprite’s Farley
by Carlos David Mogollón, WC&P Executive Editor
Statistics bear out David Farley's ongoing success as head of Sprite Industries, a market leader in the showerhead filter market niche of the water treatment industry.
In its latest annual Housewares MarketWatch summary in January, the International Housewares Association reported showerheads as the hottest sector in the personal care category for the second year in a row, showing a 39.0 percent increase in year-over-year sales in 2001. Water filtration devices and replacement filters, listed as home environment appliances, came in at 24.5 percent growth in the same period, with more positive statistics reported throughout the year.
Farley's statistics mirror those. He says annual growth of the Corona, Calif., company's sales is generally in the 25 percent range. It's produced 3-5 million shower filters so far. They make up 80 percent of sales, with the balance in precision water test instruments and demonstration kits. He points out Sprite got into shower filters in an unusual way nearly 20 years ago.
It was 1985. A gentleman in Atlanta owed the company $20,000 and his check bounced; so Farley's father and Sprite founder, Fred, who passed away in 1994, headed out to collect the debt. He returned with a new check and a prototype of a showerhead filter the size and weight of a bowling ball the man had given him that promptly got tossed on a shelf in a back room. That check bounced also and a couple weeks later, the man's body was found in the trunk of a car at Hartsfield International Airport.
"Now, if you were in my office, I'd pull out the newspaper articles showing this," Farley said. "He was a con man. To my knowledge, they never found who bumped him off. But they did find out he had sold his company maybe 10 times over to various people.
"Of course, we didn't do it because, being a California-based company first of all, we do believe in karma, including bad karma. And it's stupid to kill somebody that owes you money because dead men don't pay bills."
Six months later while shaving as his wife took a shower, Farley was hit in the face by a wave of steam that smelled of chlorine and remembered the filter in the back room. Taking it home and installing it, he found it worked. The unit was filled with KDF, though, which made it too large and weighty to be of practical use. He tested a few other items with it, such as carbon, and finally settled on a media Sprite later patented, Chlorgon, which combined with KDF acts catalytically to convert the chlorine to chlorides that are washed away in the drain water. It also requires less media, allowing for a smaller, more stylish unit.
Today, Sprite production has shifted mostly offshore to Taiwan and China. It employs 25 people in assembly at its headquarters near Los Angeles. Farley sees patent protection as a major issue facing his market and is glad a new NSF standard for shower filters is about to be approved to help validate competing product claims. Before we learn about Sprite's early history in commercial lighting, car speakers and auto amplifiers, here's a little detail on the company itself.
Sprite Industries Inc.
1827 Capital Street
Corona, CA 92880
Tel: (800) 327-9137
Fax: (909) 735-1016
• David Farley, President
• Stacy Singer, National Sales Manager
• Sherry Farley, Office Administrator
Employees: 25 onsite
Sales: 20-25% commercial/industrial (dealers); 45-50% retail; 25-30% international—with growth of 20-25% a year.
Operations: Manufacturer of electronic water instrumentation and filtration products. In 1987, introduced the Shower-Mite, a non-carbon, KDF-based shower filter. Since then, has produced roughly 20 different shower filter models, incorporating KDF and patented Chlorgon media.
And now for the interview:
WC&P: How long have you been in business and how did you get started?
Farley: Well, we are a 29-year-old manufacturer of electronics. Originally, in the '70s, we manufactured auto stereos for Sanyo.
WC&P: So, how did Sprite make the move from car stereos to shower filters?
Farley: In '79, we met a gentleman by the name of Carl Palmer, who was one of the pioneers in reverse osmosis. And he had sold his first company in '73, I believe, to Coca-Cola. He'd signed a non-compete, stay-out-of-the-business-for-seven-years clause. During that period, we met him and, in 1979, he went back in and started a second company called Pure Water International. We began to make water test instruments and demonstration kit items for him. As a sidenote, he then sold his company—Pure Water—to AMF Cuno, which had also bought the Water Factory.
WC&P: I recall that Carl has written for WC&P.
Farley: Yes, again, he's one of the pioneers in the water filtration industry.
WC&P: When he sold Pure Water, what did you do?
Farley: Well, long before he sold Pure Water—in the '80s—we began manufacturing and expanding our line of water test instruments and demonstration devices. Around '85-'86—and here comes your anecdote—we were making custom panel-mount monitoring systems for the water industry. We had a customer by the name of Aquatech International in Atlanta, Ga., that received product and paid with bad checks, about $20,000 worth. We contacted them and asked them to make good on payment. And the owner of the company, a man named Gerry Melton, had invited us out. We're a family-owned business, so he invited my father out. He did go out, spent a couple days in Atlanta and talked over some business. On the way back to the airport, Gerry gave Fred, my father, a thing that was the size of a bowling ball. It weighted about as much, with a small showerhead on it. "What is it?" my dad asks. "Well, it's a shower filter," he replies. If you were in my office right now, I'd pull the actual unit out and you say: "Oh, my God, look how heavy this thing is!" Literally, it probably weighs 15 pounds. "Well, shower filters… That’s interesting. What's a shower filter and why?" "Oh, because of dry skin/dry hair"—and the speech about why one needs a shower filter ensues. It's the first KDF shower filter, I believe, they manufactured. So, Fred returns back to the office, submits the new check . Of course, what happens? It bounces. Meanwhile, Gerry hasn't showed up for a couple days and nobody knows where he is. Two weeks later, they find him in the trunk of his car at the Atlanta airport with 21 bullet holes and covered in lime. Now, if you were in my office, I would pull out the newspaper articles showing this.
WC&P: Is Aquatech still around?
Farley: No, no, that was pretty much the end of Aquatech. He was a con-man. To my knowledge, they never found who bumped him off. But they did find out he had sold his company maybe 10 times over to various people.
WC&P: Somebody apparently didn't like that?
Farley: You got it. He made somebody mad. So, we were out the money. Of course, we didn't do it because, being a California-based company first of all, we do believe in karma, including bad karma. And it's stupid to kill somebody that owes you money because dead men don't pay bills.
WC&P: How did that affect you?
Farley: We thought, "Oh, my God, that's terrible!" We didn't want to have anything to do with it. So, we put the shower filter in a darkroom of a printing facility we have here and forgot about it. Six months later, I lived in a little beach house with poor insulation and, in the spring, they super-chlorinated the water. One morning, I'm shaving. My wife Sherry is getting out of the shower and the conditions were just right. A big steam cloud comes rolling out and I'm watching it come across the mirror. As soon as it hit me, I inhaled a strong amount of chlorine—could detect a strong amount of chlorine. I thought, "Wait a minute, that's not good for you." We drink filtered water to remove the chlorine and here I just inhaled it." Then, the lights go on. I'd first identified the problem. And the potential solution is, "Wait a minute, I have a shower filter. I have my $20,000 shower filter." I went to the office that day and returned in the evening and hung it on. And, sure enough, the shower with the filter had no smell. I went over to the unfiltered shower and it still smelled (of chlorine).
WC&P: This is back in '85 that this happened.
Farley: It was about then. The next day, I thought, "What about shower filters?" The problem with electronics is you make a good meter and there's no repeat business. We were always looking for a consumer-type product and this seemed like it just might be something new in a wide open area. We went across the street to the first Home Depot on the West Coast, which opened up in Fullerton, and started pulling parts off the shelf and made a couple of "pipe bombs," as we called them. They look very much like one and, if you were here, I'd pull one out and show it to you. We experimented around to make the shower filters.
WC&P: Different prototypes?
Farley: Yes. From then on, they caught on, especially in the water industry. For the other dealers, it didn't take a lot of explanation. It offered them an accessory to their product line, an addition to it. It didn't interfere with anything that had, so everybody jumped on it.
WC&P: It was sort of a sum-sum gain…
Farley: Yes, it gave them a little extra something to present to their customer. And as we got into it and researched it more, we realized the potential.
WC&P: When did the first one appear on the market?
Farley: I think the first one was in early '87. It was called the Shower-Mite.
WC&P: What version are we up to now?
Farley: We have many generations since. That was a sealed unit with off-the-shelf parts. And, of course, everything now is with a replaceable filter and specifically designed so there's no stock items. Where are we now? We're probably 20 different models down the road.
WC&P: About how many have been sold would you say?
Farley: I know that we've sold—how many millions?—probably between 3 to 5 million filters.
WC&P: Wow! What percentage of your business do shower filters make up today?
Farley: Oh, 80 percent-plus. Soon it will be, as the growth continues, virtually all. It definitely dominates this company.
WC&P: What's the other 20 percent?
Farley: Electronics. We still manufacture water test instruments. We do that for a couple of reasons. You do things out of habit. We also feel it keeps us true to a certain mentality of presenting correct products. And it is a way of keeping us grounded and responsible for not overstepping claims. We never have. It's not a high-profit portion of our product line, but it is something that we're proud to do. I don't know if that makes sense…
WC&P: Yes, it does. It keeps you in your roots and, as far as I would imagine, requires a bit more precision. And that keeps you on your toes—polished.
Farley: Put that in.
WC&P: Tell me right now a little bit about your company in terms of what's new, if you could. That first filter was made of what and what vs. how they're constructed today?
Farley: Our first filter was PVC end-caps and we used a lot of sprinkler and irrigation stock items off the shelf.
WC&P: Just with KDF in it?
Farley: Just KDF.
WC&P: What's a typical shower filter include today?
Farley: Today, we have a mixture of KDF and our Chlorgon, which is a patented media that expands the free chlorine removal capabilities in that it works at a lower temperature, has a little broader temperature window as compared to KDF which is predominantly a high-temperature media.
WC&P: Is there carbon in any of these?
Farley: No. We never use carbon, though I think, most of the other companies—or many of them—have and still do. We've not found carbon effective and we've looked at it very closely. We've yet to find it a suitable media. We have an in-house laboratory that we conduct continual testing and look at all the different alternatives and forms of carbon—granular, block, fiber. It's a great drinking water filter, but at the flows and temperatures and volumes required and found in a shower, they just do not perform as well as the KDF and Chlorgon.
WC&P: What's happened in terms of the longevity of a shower filter compared to the early days?
Farley: The first unit that we saw—from Aquatech—had KDF in it, so we've been using KDF in it from the beginning…
WC&P: KDF, we should point out, adds what some would say is almost a softening property to filtration.
Farley: From a consumer standpoint—you see, if you shower in chlorinated water, after a period of time, your skin becomes perpetually irritated. So, once using a shower filter, within a 7-10 day period, your skin heals. And your skin becomes softer. So, there are these two uses of "soft" that we use in the shower. One is that your skin and hair actually become softer and less brittle, less dry. They begin to heal. As far as softening, I have seen claims of other shower filter products out there that use KDF and claim softening capabilities in the traditional sense that the water industry would use "softening" in referring to the reduction of calcium and magnesium carbonates…
Farley: We don't make those claims. Again, it goes back to that there may be some softening there, I don't have any evidence that occurs in our products. I'm not speaking of anybody else's. We go back to our roots again. We are a manufacturer of water test instruments and things have to be proven for you. There's got to be some evidence. It has to be shown before we go out and make a claim. So, in our claims we have always understated. If we know that it performs at a certain level, we will reduce it by 10 percent and make the claim.
WC&P: You mean it's better to exceed expectations than not to meet them?
Farley: Yes, and even from a "greedy" standpoint, I have seen claims from some companies in the past—especially in the beginning—making 40-, 50-, 60,000 gallon claims with a little pound or so of KDF in a filter. Even recently, I've seen and we have on file other companies that have made 30,000 gallon claims on removal capacity.
WC&P: What's typical?
Farley: Say a pound (of media). And when you get into it, maybe that's not 100 percent KDF. Maybe they use carbon as a filler. We've always used 100 percent KDF or added the Chlorgon—never carbon. A pound filter, we would say would be a 5-7,000 gallon removal capacity. It's just sort of our approach. Again, it's not because we're so benevolent, but maybe from a greedy standpoint and to do the customer justice—we all know that it's better to change cartridges more often than not. It's the old adage that: "Would you rather drink or shower from a filter that is under its first half of its life rather than the second?" In other words, if it's rated for X amount of gallons, would you rather it be in the first half of that X or the second? The answer is pretty obvious. It's good to change the filter. You can tell a difference when the filter becomes ineffective. You can feel the difference, which is one of our trademark statements that we put on our packaging. You can feel the difference when you first put on a filter and you can feel it when the filter ceases to perform—or when it needs to be changed.
WC&P: I know that there's been a number of competitors that have popped up in this market in recent years. That may well lead to our next question, which is what's a major challenge that you or your company faced and how did you overcome it.
Farley: Major challenges, referring to competition, are to maintain what I want to say is a level playing field. I don't know if that fully describes it, though. Just go back to the claims that are made. It's very hard to compete. We feel it to be unfair when false claims are made on a product. You'd like to see everybody make accurate claims of their product. And, if they're product performs better than ours and it's tested to do so in a fair and equitable manner, fine. It just means that we need to make a better product or we need to make some adjustments. Whatever. Fair competition I guess is really what I'm talking about. And, in that area, we—myself among others in the shower filtration industry—have worked with NSF on putting together Standard 177: Shower Filtration that defines the testing protocols.
WC&P: Now, this is a fairly new standard, correct?
Farley: Well, the standard does not exist right now. It is still in the formulation. But, it's getting very close and it's close enough that one can test products to the standards. It's fairly well defined and I would be surprised if it doesn't pass within the next six months—definitely in the next year. It should be a standard as we now have the 43 and others for drinking filtration. That will be something that's good for the industry in that we can all submit our products to NSF or anybody else that tests to their standards and they can be measured against that. I think it will eliminate a lot of the exaggerated claims.
WC&P: How long has that standard been in development?
Farley: I know it's been in the works for almost two years now. And even before then, it's been in discussion. We've been going back and forth for about the last five years really.
WC&P: What's the anticipation with respect to it?
Farley: Hopefully, it should pass at the next Joint Committee meeting. I believe that's in the fall sometime, October or November. If you really get into it, there's only four or five shower filtration companies out there and most of them are involved in it. I'm not the only one by any means. One third of the joint task force are manufacturers, one third are regulatory and one third is, ideally, from the laboratory and testing facilities. So it's not just manufacturers. There are also people from NSF, WQA, the EPA and Canadian regulatory agencies. There's governmental and testing facilities—in addition to the manufacturers—working on these protocols and procedures. And it's really based on the Standard 42 (DWTUs - Aesthetic Effects) with obvious changes. It is an aesthetic standard and not really based on health because that seemed to be a can of worms for them.
WC&P: Particularly in California, yes.
Farley: Yes. It's a standard for shower filtration aesthetics.
WC&P: Let me ask a couple of questions I've been scribbling down while we've been chatting just to catch up on a couple of things. Now, jumping backwards briefly, when you're father went to visit Melton in Atlanta and got the shower filter prototype, had he commissioned that or was it something he passed along simply because he owed you a lot of money?
Farley: No, he simply had a prototype on hand. They were working on it. This was just something he gave my dad. His reaction was like: " What's this!? Who the heck needs a shower filter?" We went out there for our $20,000 because of the bounced check. It was just a side thing. Nobody knew what to do with it. Again, it sat in the dark room for six months just because it simply seemed like a curiousity to us. This guy could have done something beyond ripping people's money off, but that's what he was. He was a white-collar con man.
WC&P: A grifter, so to speak.
Farley: Yes, I've got the newspaper article that goes into detail on it.
WC&P: Now, when you came out with your first model in '87, was that the first shower filter on the market?
Farley: It was the first KDF shower filter, to my knowledge.
WC&P: Prior to that there had been carbon units, etc.?
Farley: Correct. There were probably some carbon ones out there. But, again, in order for it to be carbon, you do the math. If you compare it to a standard carbon filter, say one that goes into an undercounter system, and you factor in the volume, the rate of flow, etc. The flow in an undercounter unit may be 0.5 gallons per minute. We're running at 2.5 gpm. With that alone, the filter would have to be five times larger. Then, instead of a thousand gallons, which these standard undercounter carbon filters might be rated at, we’re trying to get it to 5,000 gallons. That's five times more. Plus, if you factor in the temperature, the conversion is five times five—5×5. That would be 25 times larger than the undercounter to do the same job. And, even then, it won't work because carbon fails to perform as well at high temperatures. As a matter of fact, it begins to offload. Carbon will offload particulate.
WC&P: It disintegrates or breaks down?
Farley: Yes, carbon is not a high temperature filter. But there probably were some carbon shower filters. People were playing around with it. But to the best of my knowledge, this was the first KDF shower filter out there. That's what we went on to emulate.
WC&P: Again, having a standard in place soon will overcome a lot of the challenges that are out there as far as the freedoms of advertising claims to be so inconsistent, yes?
Farley: Correct. It will level the playing field. There's always going to be people, I guess, that by human nature tend to want to overstate claims and/or… But once we get the NSF standard, which is basically up and running although it hasn't passed yet, that will change. The protocols and testing procedures are in place enough to have all of our products put through NSF certification.
WC&P: From your perspective in the market, where do you see the industry going?
Farley: This will quiet down any more regulations in that we have both governmental representatives from the U.S. and Canadian environmental and health agencies on the board. From a regulation standpoint, I think, this will allow us to get on to developing the industry. One step in legitimizing the industry—at least in the wholesale buyer and the consumer's mind—is getting past the notion of "Does it really work?" From my standpoint, that's the advantage of working with NSF to test these and find procedures and set protocols in place and demonstrate that they perform as represented.
WC&P: You mentioned wholesale. What channels to market do you use?
Farley: I don't want to put others down but, for myself, I'll sell anywhere. The channels we came out of and are still heavily involved in what I call the commercial/industrial water treatment industry. Again, it was a logical add-on to the preexisting product line. We enter into the fringe retail arena of catalogs and magazines—generally direct sale—where they're looking for something new. It's a picture and some copy. "Oh, look, what is this!"—and here's a short explanation…
WC&P: The "SkyMall" stuff advertised in airplane magazines…
Farley: Yes. Birkstone, Hammacher Schlemmer, FrontGate—whatever. We've been in them all—and more than once. And we still are in many. It's a viable, good market, if nothing else for advertising. It gets the word out. When are we able to drop down into traditional wholesale, brick-and-mortar? It's beginning to happen. It's been this way for the last five to seven years. There has been the beginning of retail acceptance and it actually does move off the shelf.
WC&P: What kind of places would that involve? For instance, you mentioned parts from the original product came from Home Depot…
Farley: Before Home Depot and back to the catalogs and magazines, after that, there are the stores such as Bed, Bath & Beyond and Linens & Things that tend to carry home items. They're more or less female oriented. The women get it quicker than the men. It used to be in the beginning when we would go to the shows back in the '80s and early '90s and still a little bit today—but not too much if any—people would walk by the booth and the questions were always the same. What is it and why? Steve Martin has a good schtick he used to do on Saturday Night Live back a few years where he'd look right into the camera and through different impersonations of characters, point and say, "What the hell is that thing?" In a different persona, he'd ask in another voice, "I dunno. What is it?"
WC&P: Oh, you're referring to the skit he used to do with Bill Murray: "Hey, you kids, get off that!"
Farley: Right. Pretty soon we were answering the question before they asked: "It's a shower filter. Why? Dry skin, dry hair, dry scalp." Now, if it was a couple—man and woman—the woman would say, "Oh, yeah." She knew—dry hair, dry skin, dry scalp. The guys would say, "So what?"
WC&P: We're a little more dense.
Farley: Yes. Guys are. Look at The Man Show if you want an explanation where guys are at. But, more and more, people are realizing the potential of the market. There's the water purification end, the bottled water end. You take all the customers from bottled water, water filtration—the Britas, Purs and Culligans. Anybody that drinks bottled water, filtered water or some form of treated water. They go to their kitchen to drink it, typically, in the house. Take all of those customers and multiply it by 2-point-whatever of the number of showers and bathrooms in each house. That is the potential of preexisting customers, qualified customers right now.
WC&P: That the dealer can upsell?
Farley: Yes. It's double all these different industries combined.
WC&P: So, it sounds like the dealer market hasn't really been tapped, but it seems as if it has a huge upside potential for shower filters.
Farley: The potential is enormous if you put it in those terms. The problem is getting public awareness out and getting the word out.
WC&P: Do you get a lot of dealers that carry your units?
Farley: Yes. Oh, sure. Our base again is water tests. We sell with a customer base in the water purification industry. So, they're still our prime, base customer.
WC&P: Is this just in the U.S.?
Farley: No, it's U.S. and worldwide.
WC&P: What's the difference in the worldwide market for you?
Farley: Well, there's differences in that they have different parameters for their showers and their culture. The cultural plane is different. They have instead of fixed heads, handhelds are used much more in Europe and Asia. And pressures are different. And water conditions are different. So, it's a different product that goes offshore than what sells in the U.S.
WC&P: Where is most of the business done offshore?
Farley: Oh, Europe and Asia. South America is coming on, but it's Europe and Asia mostly.
WC&P: I would take it that it's moreso in urban areas than rural settings, too?
Farley: It's people that are affluent enough, first, that have running water consistently. Yes, it's the affluent portion of the population.
WC&P: The Tokyo's, Beijing's, Madrid's and Frankfurt's vs. the provinces or small towns.
Farley: Sure. It's the major population centers.
WC&P: What's the split on the amount of business being done overseas vs. domestically?
Farley: Oh, I see it at about 25-30 percent international.
WC&P: Is there a difference in the growth rate?
Farley: It's all pretty level. The percentage stays fairly accurate from year to year. It stays fairly consistent. We're talking somewhere between—based on just my estimate—20 to 25 percent overall. So, the growth is very good. After the 30 percent, we probably have 20-25 percent commercial industrial, which are to the dealers. Then, probably the remaining 45-50 percent is into one form or another of retail—some traditional retail. That could be spread among the different avenues from direct mail catalogs to mass merchandising chains.
WC&P: How many employees do you have?
Farley: We have 25 onsite. Our facility is set up for final assembly and shipping. We have offsites for supply, if you will, that are located in China and Taiwan where primary manufacturing is performed.
WC&P: That includes the patented Chlorgon?
Farley: Yes and no. Some of it's domestic. We have two manufacturing facilities that provide the material.
WC&P: What's the domestic one?
Farley: We have a facility located in Iowa and another offshore.
WC&P: Where in Iowa?
WC&P: What's the basis of Chlorgon? What would you compare it to?
Farley: It's a calcium salt. Basically, the reason carbon does not work as well as the materials we use is because carbon works so well. Carbon, as most know, offers primarily a source of adsorption. It has a finite or specific number of attachment sites on it. And, through that process, contaminants are attached to it. Once the carbon is saturated, it's no more. With KDF and also with Chlorgon, it's a different process. We're actually not 100 percent accurate inasmuch as the materials function not so much as a filter as a catalytic converter. It converts the free chlorine that may be present in the water to a chloride, which passes through the filter and down the drain. There's no retention of contaminants apart from particulates in the filter itself. So, that's how such a little amount of media can process a fairly high amount of water.
WC&P: Did you at one point produce all your stuff in the U.S. or how did that evolve?
Farley: We began sourcing offshore in about '94. About then, we began finding outside vendors and suppliers.
WC&P: I assume it was a matter of competition at that point?
Farley: There were a variety of reasons. We tapped into the cheaper labor markets and tried to provide the final product at the lowest cost.
WC&P: Did you have to do a lot of advance work to do that or learn Chinese?
Farley: At the time, it was not quite as obvious as it is now. So, we had to locate some companies that were already pre-established in the area and that had manufacturing experience to keep us going in the right direction—keep us out of trouble. Overall, it's been a very good experience. We were doing it basically when offshore products were, I dunno, frowned on or considered lesser quality. That was always the issue, that we had to maintain a certain level of quality. Nowadays, they are so sensitive to it—as they were even then—that not much actually had to be discussed with them about the quality. They were aware they had a bad reputation and everyone was watching that aspect of the manufacturing process.
WC&P: I take it that's improved significantly today?
Farley: You know, it was good in the beginning and, actually, the people we work with are ISO-rated. So, they're equal or exceed a lot of the manufacturing that goes on here in the U.S. But we do also manufacture here in the U.S. and have source sites that are located in Southern California. Again, we bring in and assemble and do the final packaging here with about 25 employees.
WC&P: If there's one hot-button issue facing water treatment dealers or the industry as a whole over the next few years, which one would you say would have the most impact?
Farley: Looking at the industry, I think NSF has gotten us over the credibility gap that has been there because what tests were available on the products were questionable. That has been one of the hot topics and still is, but there's a resolution there such that I think it will just become automatic that everybody's going to have their products tested. For us personally, the real hot button is patent infringement. We have started and have been manufacturing for a period of time and have accumulated approximately 20 shower filtration patents with six pending. It's becoming more and more an issue that's dominating our company. And I believe it's just natural in the course of the growth of any industry that there will be periods or times when we have to bring these patents in and litigate with other companies that are offering similar products.
WC&P: The bottom line is anything that can strengthen patent protection laws would be great for you?
Farley: Yes. That's become an issue of all products. One thing that's happened is, if you look at the development of the shower filter as an example, it's gone from this crude bowling ball to little pipe bombs with a shower head on it. Then, we started incorporating the filter onto the showerhead or into the shower handle. And we have different ways and even other items that incorporate filters into the structure. One of the main challenges in providing a shower filter and acceptance of it by the consumer is that it is aesthetically pleasing.
WC&P: It adds to the ambiance of your bathroom.
Farley: Yes, if it looks like an Erector Set—as well as it may work—the consumer will not purchase it. To go the opposite side, this thing may look really good and not work well, but the consumer will buy it because it looks good. That, again, is where NSF can help level the playing field by making sure that the units perform as represented. The shower filter is developing from a filter add-on between the shower and the head into an integrated system.
WC&P: I was just noticing on your website that you also have listed here dechlorinating bath salts and drinking filters in addition to shower filters. What do you do on the drinking filter side?
Farley: Not much. We probably should pull that.
WC&P: Is that a product you make yourself?
Farley: Drinking filters are on special order and usually for our offshore companies. We don't sell drinking filters per se domestically.
WC&P: Are these systems you make or buy elsewhere and act as a distributor for another manufacturer?
Farley: Yes. Both. It's a courtesy or convenience we offer to our offshore customers. Those really don't exist in Sprite's product line.
WC&P: What are the bath salts?
Farley: They're a form of our Chlorgon salt that neutralizes chlorine.
WC&P: I assume, again, playing on the female as the primary decision-maker?
Farley: Absolutely. How many baths have you taken lately?
WC&P: Not too many.
Farley: As opposed to your wife?
WC&P: I have to admit to giving her bath salts from time to time as a present. Mostly our 1-year-old boy monopolizes the tub, though, nowadays.
Farley: Baths look real nice, but most people shower. Who's got time to draw a bath? Still, the bath is the lady's domain. It's definitely aimed at the female. And they work just spectacularly. It's a neutralizing agent that combines with the free chlorine. We've looked at the different methods that are out there now and some of our own ideas on how to filter a bath. But there are so many different bathtub fixtures out there that it's hard to have anything that's universal, as opposed to with a shower filter, we all have a shower arm that's a ½-inch threaded. That gives you someplace to start.
WC&P: I assume these hose filters are popular in Europe along with the handhelds where they detachable shower massages may be more popular?
Farley: Yes, they're the only thing used only there. They're more than popular. They predominate.
WC&P: What about these separate cartridges, I assume they can be marketed elsewhere on hoses at nurseries for watering plants, etc.
Farley: And we do that. We sell to some nurseries and organic growers. That to me is a little extreme, but that's how some people are with their plants.
WC&P: You get into some of those health food stores or co-ops and those guys are fairly serious about it. They have a whole other attitude.
Farley: Absolutely. And health food stores is one market for our product.
WC&P: It's kind of neat that you're still finding all sorts of different ways to mine the market.
Farley: And it continues on. We don't have all the answers and definitely don't want to sound as if we do. We do say that we lead the industry and we created it, but we don't control it. It's an open arena for other companies to come in. A little bit of honest, good, fair competition, I think, is healthy. It allows somebody else to carry the ball for a little bit and get the word out. One of the biggest challenges is just getting the word out that such a product exists and it does work as claimed. That goes back to the NSF. So, there's a great deal of advertising expense that we have experienced and paid for over the last many years and we'd like to see other companies get involved and carry the ball. What typically happens is there's very little advertising, they see a product we're making and then we see ourselves out there in the marketplace—but it's not our product. That's where it hurts us and it would hurt them or any other company if the rules were reversed. It's an open area. There's a lot of potential.
WC&P: You're referring to knockoffs?
Farley: Yes, the knockoffs are just really counterproductive. But that seems to be part of the water filtration industry.
WC&P: I think that about covers us. Is there anything else you'd like to add?
Farley: No, that's about it. We welcome competition and feel that this is a very new niche and has not yet begun to grow to its potential, which is enormous. Someday, we feel, all showers will have filters on them in one form or another—whether it's a showerhead, an add-on filter or a shower arm. We feel why not? We can make these in an economically acceptable price range. The thing we look forward to is looking to other companies and working together to get them out there. That's a big thing lately.
WC&P: I have one more little thing to ask. When did you come on board at the company?
Farley: Oh, I've been here from the beginning. We started in '74. My family started the business.
WC&P: You came onboard as what?
Farley: Oh, I was the No. 1 gopher. My dad was president. I became president in '87. My father passed away in '94.
WC&P: What did he do before he started this?
Farley: We had a lighting company. In the '60s and '70s we manufactured commercial lighting and stage lighting. And we had an item called ColorSound which translated frequencies of sound and triggered circuits, an infinite number of circuits. The high frequencies would trigger a circuit that would be for say a red light, the low frequency might trigger a blue light, and the middle frequency would trigger the yellow. You could rainbow the lights so as music played you could get a color-sound visual representation.
WC&P: I'm thinking discomania.
Farley: Before disco, though, we had things such as colorbars and light organs. And, actually, we manufactured those plus more commercial systems for stage.
WC&P: That's pretty wild.
Farley: On the other side, we made commercial lighting for hospitals as well as retail stores. For instance, Fred Meyers, we did all of their new fixtures for their remodels.
WC&P: What happened to the lighting company?
Farley: We went from lights into making speakers and then into auto amplifiers. We switched over. One was investor-owned. We became private in '74.
WC&P: And the company changed?
Farley: Yes, the original company was Westek. That had an investor branch to it and we became private and reorganized as Sprite as a private company in 1974.
Next month in this column, read our interview with Bill Waltz, who is vice president and general manager of Pentair Water Treatment Group based in Chardon, Ohio.