Bulk water encourages repeat purchases and shopper loyalty for brick and mortar retailers

12-Oct-2017 - Last updated on 12-Oct-2017 at 14:03 GMT

Bulk water has benefited from the accelerated growth of the global bottled water category which is projected to more than double in value to $350bn by 2022 (according to Allied Market Research) and physical store retailers are in a unique position to benefit from this trend.

A bulk water dispensing system for at-home use means that consumers will likely continue to return to store to stock up on their five-gallon jugs of water, according to multi-gallon purified bottle and dispenser provider, Primo Water. The company also found that 90% of consumers who own a bulk water dispenser make an additional one to two shopping trips per month.

“Every retailer knows that you want traffic coming back for the same item over and over,” Primo Water CEO, Matt Sheehan, told BeverageDaily.

Primo Water sells its specialized dispensers at a very low margin in order to increase household penetration and strike long-term relationships with customers who continue to buy the company’s bulk water.

The company’s “bottom loader” dispenser model has also encouraged consumers to enter the bulk water category because of its easy-to-use design which doesn’t require users to have to hoist the five-gallon jug on top of the machine.

“That old stigma of I have to lift it on my shoulder and get in the top loader before it spills doesn’t really exist anymore (with the bottom loader),” Sheehan said.

“Design does matter, and more and more customers are telling us that.”

Since bringing its bottom-loading dispenser system to market, it now represents 45% of the company’s sales, according to Sheehan.

Household hydration

Sheehan said that in order to overcome the outdated office water cooler image that many consumers still have, it has been focusing heavily on at-home consumers.

The company has found that while water consumption is already on an upward trajectory, having a dispenser at home provides a “visual cue” to consumers to drink more water.

“Until you put a presence at home of water, you just don’t drink as much, it doesn’t become a habit. People also drink more water when it’s cold,” Sheehan said.

“People don’t necessarily like having half consumer bottles and caps all over the house. If you do it in a temporary way, it will become a temporary thing.”

Primo Water’s attention to consumer accessibility also applies to its distribution strategy where it is available in 46,000 retail locations in the US and Canada.

Eco emphasis

A criticism of the single-serve bottled water industry is that it has increased landfill waste and with bulk water the amount of waste is drastically lower, according to Sheehan.

“A five-gallon bottle for us is reused 50 times. That’s 250 gallons for a bottle in its life,” he said.

“Fifty uses is the equivalent to 1,500 single serve bottles and at the current recycle rate that is 1,000 empty bottles go into the landfill.”

While the company believes the eco-friendly side to its business is an advantage, Sheehan ultimately believes that consumers still choose products based on other factors such as its source and price point.

“I think the whole water space is going to grow and we should not try to fight each other,” he said. “We will continue to stay more focused on household enablement of hydration.”