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End of the road for the water cooler?

By Steven Church
The (Wilmington, Del.) News Journal

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The water cooler, a fixture of the American office for as long as Americans have been in offices, could be headed the way of the glass milk bottle and the phone booth, victims of a cheaper, more reliable competitor.

Companies are abandoning their bubbling coolers with the upside-down, five-gallon jugs for filter machines that deliver hot and cold filtered tap water.

A new generation of filters and other changes in the industry have cut into the demand for the big jugs. Last year for the first time, more water was sold in small bottles — through vending machines, convenience stores and supermarkets — than was delivered to offices and homes.

"The filters are just easier," said lawyer Megan Mantzavinos, whose office has made the switch. "It's less expensive, and nobody has to lift the heavy bottles."

That kind of talk can make bottled-water executives boil.

"We're not in the tap-water business," said James Land, president of Philadelphia-based Wissahickon Mountain Spring Water.

Land's privately held company, founded by his grandfather in 1926, experimented with filtered water service briefly in the 1980s but sold the business. The two sides of the office water market were just incompatible, Land said.

Coolers cost from $5 to $6 a jug delivered, experts said. One five-gallon bottle provides 640 8-ounce glasses a day, according to the water company Culligan, so an office of 16 people would use $25 to $30 of water in a week. Filtered water costs $30 to $35 a month, the company said.

Growth in the market for water delivered to homes and offices has been slowing since 1997, dropping to 1.7 percent in 2002 from 4.11 percent in the previous year, Beverage Marketing said.

Despite the slowdown, coolers dominate the marketplace, said Jonathan Hall, publisher of The Hall Water Report, an industry newsletter. Sales figures suggest that may be changing.

Hall estimates that demand for filter service has grown about 7 percent a year, with sales last year hitting $1.5 billion. Sales of bottled water delivered to homes and businesses totaled $1.7 billion last year, about 1 percent higher than the year before.

Estimates for this year are not yet available, but if the current pace of sales continues, deliveries of water coolers to homes and offices could shrink for the first time in decades, said Gary Hemphill, with Beverage Marketing Corp.

The difference in the water is the source. Filter companies use tap water while bottle companies prefer spring water. Both companies, however, use either carbon filtration or reverse osmosis to remove impurities. The bottle companies filter their water on a massive scale before shipping it out.

The differences in how the businesses operate are more extensive. A bottler typically rents a customer a cooler and then makes regular deliveries. The filterer comes to your home or office and hooks a portable filter up to a water line.

Former bottled-water salesman Andrew Taub watched interest in his Wilmington, Del.-based delivery service flatten out the last two years while demand for filtered tap water soared. He just sold the bottle side of his business.

Taub now concentrates on the 700 customers who use his filter service.

"I am enjoying it a lot more than the bottled-water business," Taub said. "People don't call complaining about being out of water."

Copyright © 2003 The Seattle Times Company