//
you're reading...
Business, STEM, Uncategorized

Sharks and Non-disposable Bottles

Last week I watched an episode of Shark Tank. This reality-based, business-themed television show on ABC attempts to partner budding entrepreneurs with the sharks – the equivalent of angel investors – self-made, tycoons who are very rich and have good business acumen. The entrepreneurs are seeking a business partner with cash to help them expand their business, launch their product, or take their company to the next level. A representative of the business pitches their proposed plans, strategy, and ideas to a panel of five sharks to see if there are any takers.

The sharks are looking to do what sharks do – make money! If they are interested in partnering with one of the entrepreneurs, not only do they have cash to invest, but knowledge of product marketing, distribution channels, and other resources that these young companies so desperately need. They put up a certain amount of cash for an agreed upon percentage of the company and/or other arrangements.

This is the fourth season of the show. I have to admit that I was not an early adopter of the program. My bad! Episode 26 aired (or re-aired) last week on Friday evening, July 26th, and featured four products [Ref 1]:

  • LIDDUP – a portable cooler with built-in LED lighting
  • ECHO VALLEY MEATS award winning meats and delicious treats
  • GOBIE – socially responsible water bottles
  • ROOTSUIT – full body spandex suits

Of the four products pitched, Gobie H2O appealed to me because it addresses a social problem of inconsiderate consumption and disposal of single-use water bottles. Even more interesting, just yesterday, I saw an ad for Gobie H2O bottles on FaceBook.

Bottledwater_nolabelWhat’s mind boggling is the explosive growth of the bottled water market over the last 20 years! The person who is writing this post grew up on a farm and drank water from a well. Do I drink bottled water? Yes, however, I also limit my intake and use because I am sensitive to the problem with plastics and trash that they create. I drink tap water without any complaints, and recognize that all bottled water is not created equal. Some have been stripped of minerals that my body needs.

According to BevNet, the International Bottled Water Association (IBWA) reported overall consumption of bottled water in the U.S. during 2012 jumped by 6.2 percent to 9.67 billion gallons, while sales increased by 6.7 percent, totaling $11.8 billion. [Ref 2] The average American consumed 30.8 gallons of bottled water last year, up 5.3 percent over the previous year.  One of the reasons given for the continuing increase in bottled water consumption is the lifestyle shift towards health and wellness.

While most professionals in the health, medicine and sports fields will not argue against the virtues of water and its ability to hydrate the body, the pollution associated with water beverages and the throw away bottles that come with them have been frowned upon by environmental, government, and socially responsible groups as well as concerned members of the public for years. In my previous post, The Plastic Water Bottle Effect, some of the negative aspects of the bottled water industry are [Ref 3]:

-          24 million plastic water bottles are thrown away each year.

-          only one (1) of every six (6) plastic water bottles is properly recycled.

-          17 million barrels of oil are used to produce plastic bottles in the U.S.

-          bisphenol-A or BPA is a chemical that is used to make some plastic bottles and has been found to cause cancer [Ref 4]

Source: Nalgene

Source: Nalgene

Also growing with the “water as a beverage” movement are more permanent and reusable bottle products to contain water and other liquids as a replacement to the throw-away bottles with many of the problems above. Following the “find a need and fill it” tenant of entrepreneurialism, reusable bottles eliminate or significantly reduce many of the negative aspects of throw away bottles.

While the concept of a reusable bottle for water and other liquids is a great idea, it is not a new one as several of the sharks noted in their discussion. There are a number of reusable bottle products that can be found in today’s market place, and many are sold by the large national chains in the U.S. including Wal-Mart, Target, and Kohls. The owners of Gobie H2O are attempting to get their product in Target stores. As one of the sharks noted, Target carries at least six non-disposable bottle products and they are all less expensive than Gobie H2O’s product. Amazon.com seems to have a few gazillion non-disposable bottles to sell. So what makes this product better than the competitors?

The Good Housekeeping Research Institute tested 32 reusable, BPA-free water bottles to find options that are spill-proof, easy to use, durable, stylish, and easy to clean. [Ref 5] Although no date is provided, the report appears to have been published in Fall 2011. Those products tested ranged in price from a $4 polyethylene bottle (22 ounce) by Fuel Belt to a $27 stainless steel bottle (32 ounce) by Nalgene. Some have sipping devices, open caps, gripping devices, contoured shapes, no spill or no drip features, rubber grips, etc.

Source: Gobie H2O

Source: Gobie H2O

One of the challenges for Gobie H2O is the price tag. At $30 per unit, their product is more expensive than most good (not el cheapo) water bottle that falls in the $9 to $20 range. The price tag was a deterrent for three of the sharks. However, to Gobie H2O’s credit, its bottle has some features that most bottles on the market do not including:

-          built-in, daily use, active carbon filter that takes out common contaminants that contribute to foul taste like chlorine and other odors from municipal tap water. One filter is good for three months or 100 gallons of water.

-          Replacement filters are available from Gobie H2O or other retailers.

-          durability of a hard shell bottle with accessibility of a squeeze bottle.

-          functional design for traveling or exercising.

-          other features include, finger loop, wide opening, cap storage, cup holder and ergonomic mouthpiece.

-          dishwasher safe.

This segment of the show ends with one of the sharks, Daymond Johns, making a counter offer to the initial proposal that was pitched. One of Johns’ requirements to Gobie H2O’s strategy is that he would be willing to put up $300,000 for a 30% stake in his company, however, he also had a strong requirement that the bottle be sold by a major retailer like Target within the next year.

Personally, I like the design of Gobie H2O’s bottle, and see it as a cheaper alternative to purchased bottle water – so, less $s and no trash to get rid of. The product appears to be more functional than stainless steel or aluminum, and the materials of construction are better than other products that I have seen. I also like the Flex-flo grip feature that makes it easier to carry when I am walking Wally, my adopted bull-mastiff, or when running along trails or up and down some of the mountains in the area.

I expect to see more improvements in the products that are offered in the non-disposable bottle market. What remains to be seen is how Gobie H2O’s product performs over the next 12 to 24 months.

References

  1. Shark Tank, http://ww2.abc.go.com/shows/shark-tank/entrepreneurs#426
  2. U.S. Bottled Water Sales Totaled $11.8 Billion in 2012, BevNet,  http://www.bevnet.com/news/2013/u-s-bottled-water-sales-totaled-11-8-billion-in-2012
  3. The Plastic Water Bottle Effect, blog post for A Bridge for Business and STEM, http://bridgebizstem.wordpress.com/2013/07/27/guest-post-the-plastic-water-bottle-effect/
  4. www.niehs.nih.gov/health/topics/agents/sya-bpa/
  5. Best Reusable Water Bottles, Good Housekeeping Research Institute, www.goodhousekeeping.com/product-reviews/eco-friendly-products/reusable-water-bottle-reviews/best-reusable-water-bottles#slide-1
  6. Gobie H2O website, http://www.gobieh2o.com/pages/how-to
About these ads

About Vi Brown

Vi is principal and CEO of Prophecy Consulting Group, LLC, an Arizona firm that provides business and engineering services to private and public clients. Prior to establishing her consulting practice in 2001, Vi worked with Motorola, Maricopa County Government, Pacific Gas & Electric, CH2M Hill, and Procter & Gamble. As an adjunct faculty member, Vi teaches undergraduate calculus classes and graduate level environmental courses. She is also a professional speaker.

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

%d bloggers like this: