Consumer Appeal

Desirable Product - Bottled water sales have grown at approximately 12% annually and are expected to grow at a rate of at least 10% annually for the next few years. Bottled water sales is the fastest growing sales in the beverage market.

Economical Product - A water store's water is typically sold, at a savings of 50% over supermarket prices and at savings of up to 400% over home delivered bottled water. When one considers the savings of bottled water over drinking colas and other beverages, which are consumed because the water isn't palatable, one realizes the extreme value of quality water.

Health Conscious Consumers - Water is the best beverage to promote and maintain good health and there are no allergies to water.

Public Awareness - The EPA and other government agencies continue to issue reports as to the poor quality of our municipal water supplies. New testing procedures are revealing the presence of more and more chemicals in the water.

Environment - Reuse of bottles conserves significant amounts of petroleum disposal costs and landfill space.

High Quality Water - A well developed water store uses top-quality processing equipment coupled with an attendant on duty to monitor quality continuously. The freshness of the product makes a difference that is noticeable.

Marketing Values

High Markup -The cost of producing water is less than 5 cents per gallon and is usually sold at more than 25 cents per gallon.

Repeat Customers - Customers return at a usual interval of one to two weeks

Consumable Product - Since the product is consumed there is a constant return for more.

Low Cost Advertising - Customers remember the business well because it is used often, as a result they recommend the business to their friends and neighbors.

Business Value

Simplicity - A water store has little inventory to maintain, is a cash business, and is relatively low tech (if properly laid out and explained) to operate. And generally the customer is sold on the value of quality water before they come into the store.

Location Cost Low - A small space with good parking in the right area works better than an expensive mall.

Low Inventory Costs - The main sales items are "manufactured" as they are needed.

Recession Resistant - As the economy proves ever tighter consumers continue to value health maintaining products, especially when those products are the most economical beverages on the market. The BYOB Water Stores® operating in the oil-producing areas of the country during the oil depression of the 80's flourished even while other businesses in the area were closing. As the consumer is pressed for income he moves from higher priced water to our lower priced water.

Inflation Hedge - A large percentage of the business costs are set at the time a water store is opened in the cost of the equipment and rent. As the costs go up for the competition, a water store's costs go up at a much slower rate.

Copyright- Castle Water Systems, Inc. 1997

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