New Wave Water stores that cater to budget-minded, health-conscious families are making a splash.

Fredrick Bozin's product has no taste. And that's justfine: Tastelessness is, to him, the very point--although hisproduct is also pure, economical, and usable in every household inhis selling area.

What's Bozin selling? Try water. That's right; theinventory at his Watermarket store in Fallbrook, California,consists of gallons of clear, clean, inexpensive water. While otherentrepreneurs try their hands at new, cutting-edge products, Bozinand a groundswell of water retailers like him are selling a productas old as the hills.

Devoting an entire store to water isn't as strange as itsounds. Water is a hot commodity. Why? People aren't entirelysatisfied with the water that comes from their taps. Sure, it'ssupposed to be safe. But in some cities it's brown. Or itsmells. Or it has particles in it. And who knows what secret leador silent carcinogen lurks undetected in your glass?

Traditionally, the alternative has been bottled water. In 1995,Americans consumed some 2.7 billion gallons of bottled water--awhopping 1,025 percent increase over 1975 figures, according to theInternational Bottled Water Association. (And that doesn't eveninclude water sold out of stores like Bozin's becausestatistics for this sector don't yet exist.) But standardbottled water is rarely cheap. In some areas, five gallons ofhome-delivered water cost $7.50. At the market, the least-expensivegeneric brands sell for 50 cents or more.

Bozin's water, by contrast, costs a mere 25 cents a gallon.And Bozin says the quality is as good as or better than moreexpensive alternatives--a claim his customers seem likely to back.On an average day, he sells between 950 and 1,100 gallons in spiteof the fact that Fallbrook has a population of just 32,000.Bozin's secret: value, service and genuine quality. "Ourwater is very clean," he says, "and it tastesgood."

Waterlogged

In an era when business concepts seem to get more complicatedevery day, discovering an enterprise based on such a simple productis, well, refreshing. "We don't have any product waste,and there are no styles to go out of date," says Julie Chaves,who co-owns Drinking Water Depot in Canoga Park, California, withher husband, Joe.

What makes water a hot seller? One reason is consumers'continuing emphasis on value. However well the economy is growing,everyone's always looking to save a buck.

Another important factor is health consciousness. Waterisn't fattening, alcoholic or loaded with caffeine. Dieters andfitness buffs are urged to drink two quarts or more of water dailyto help the body function properly. That means high per-capitaconsumption and a desire for water that tastes pure.

The key word here, of course, is "pure." For water tobe absolutely healthy, it should be free of carcinogens, minerals,chlorine and bacterial critters. Water retailers don't accusemunicipal water supplies of outright contamination. But they donote that bad-smelling, bad-tasting, suspicious-looking tap waterisn't exactly uncommon.

How is water-store water difference? Though the purificationprocess varies among stores, most employ rigorous filtration andreverse osmosis systems to remove virtually all foreign particles.Bozin, for instance, reckons his local tap water contains about 450parts per million total dissolved solids. After processing, theWatermarket's water contains only four to five parts permillion.

From The Ground Up

This is an unusually low-cost business to operate. At the centerof operations is a purification system. After going through thefiltration process, the water is collected in giant tanks anddispensed to customers via self-serve spigots. Except during thebusiest of times, one employee can easily man the store, operatingthe cash register and helping customers out to their cars.

Water stores work well as very small or even solo operations(usually with the help of a part-time employee). Absentee ownershipis also highly feasible, which is why many store owners branch outinto multiple sites.

Start-up costs are modest for retail. With some frugality,it's possible to open a 1,000-square-foot location for lessthan $40,000, and start-up funds of $50,000 to $75,000 areapparently ample. Other than the usual leasing and buildout costs,the only major expense is the purification equipment, which runsclose to $30,000. The main inventory--water--comes at rock-bottomprices; moreover, you make your own as you need it. Most waterstores also sell coolers, bottles and miscellaneous filtrationgadgets.

The Site To See

Two key factors in a water store's success are location andmarketing. According to Bruce Wilkinson, co-founder of WaterBusiness Interna-tional, an Escondido, California, manu-facturer ofpurification equipment, water stores can make a splash in almostany part of the country. "Warmer climates have greater demandbecause people drink more water there," Wilkinson says,"but we've seen stores opening just abouteverywhere."

The ideal site is in a strip center anchored by asupermarket--exactly the kind of site Bozin chose for his shop."Being near the supermarket is a big advantage," saysBozin. "It's easy for people to stop in at the same timethey do their weekly shopping," and that extra measure ofconvenience can spell the difference between a sale and a pass.

In this business, an upscale neighborhood won't necessarilytranslate into rising sales. On the contrary, says Joe Chaves,whose store is earning monthly sales of approximately $4,000,"I don't think this business does as well in high-incomeareas [because people there] don't care about saving 75 cents agallon on water. We're in an area that caters to families;they're the ones who want to save money."

Interestingly enough, locating in an area with a significantimmigrant population can be a plus. "People in other countriesare used to drinking bottled water," says Donna Compton, ownerof H2O2Go in Vista, California. "Many people from othercultures simply won't drink water from the tap."

Whatever the demographics, population density is an importantconsideration. "You want a high-visibility, high-densitylocation," says Wilkinson. Areas with a preponderance ofapartment buildings are especially desirable. Notes Wilkinson,"Renters aren't going to invest in their own homepurification systems, and they're less likely to want to payfor home water delivery."

Flow Of Customers

Even the best location won't draw people to a water storewithout marketing. Compton, who opened her store in 1995, says theearly months were tough sledding. "Once you get people in thedoor and explain your operation, they understand and are likely tobecome steady customers," she says. "But getting them inthe door wasn't easy. Advertising did nothing for us. Peoplewould see the ad and not understand what we were doing."

What's the answer? To some extent, it's patience. Newretailers should be prepared for a few slow months during start-up.But it also pays to have a plan. Although newspaper ads flopped forCompton, door hangers and coupons have been successful in bringingpeople to the store.

The Chaveses are constantly marketing. "When apartmentmanagers come into the store, we give them coupons for theirtenants for 5 free gallons of water," says Joe. "Thatencourages people to come in and try us." They also sponsorfund-raisers and donate a percentage of sales on a designated dayto a local school or sports team. The community groups get a great,effortless fund-raiser, while the Chaveses get flier distribution,community support and foot traffic.

For entrepreneurs who understand marketing--and the market forpurified water--water stores represent a unique opportunity.Essentially, all it takes to succeed is the right equipment, a plumlocation, promotional savvy, the blessing of your healthdepartment, and a commitment to quality and service. You don'tneed a fortune in start-up capital or layers of corporatebureaucracy. And you certainly don't need taste.

Want To Know More?

The Water Quality Association is a trade organization formanufacturers and distributors of point-of-use water treatmentequipment. Their annual trade show will be held this year inAlbuquerque, New Mexico, from March 17 to 23. For information, call(800) 749-0234, or write to Water Quality Association, 4151Naperville Rd., Lisle, IL 60532.

Water Conditioning & Purification is a monthlymagazine covering the water business. Subscriptions are $39annually and are available by calling (520) 323-6144 or writing toWater Conditioning & Purification, 2800 E. Ft. LowellRd., Tucson, AZ 85716.

Gayle Sato Stodder covers entrepreneurship for variouspublications. She lives and works in Manhattan Beach,California.

Contact Sources

Drinking Water Depot, 20119 Saticoy St., Winnetka, CA91306, (818) 993-9461;

H202Go, 1621 S. Melrose, Ste. G, Vista, CA 92083, (619)599-4413;

International Bottled Water Association, 113 N. HenrySt., Alexandria, VA 22314-2973;

Water Business International, 1914 W. Mission Rd., Ste.K, Escondido, CA 92029, (619) 735-5800;

The Watermarket, 835-D S. Main St., Fallbrook, CA 92028,(619) 723-6693.