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SO YOU WANT TO BUILD
>>A WATER STORE? > >>(part 2 of 2) >>by Gene Shaparenko - Aqua Technology >>Water Conditioning & Purification; July 1986

If there ever was a business opportunity that is capturing the attention of water professionals around the country it is the "full-service water store:.

Last month we provided an overview of what it takes technically and financially to enter this type of business. Every week we get perhaps a dozen inquiries as to what type of in-depth technical and financial information is required to actually put together and operate a store. This short article provides some "start-up" information required on some of the key areas of store design.

>Reviewing What A "Water Store" Is

Each individual will have different ideas as to what to merchandise in the store or exactly how to operate it. The stores built to the operational guidelines described below have been very successful and are what we call a "baseline full-service water store." They consist of:

(1) A fully-automatic system to precondition, purify, store, sterilize and dispense drinking water to customers on a large -scale, self-service basis;

(2) a selected set of point-of-use(POU) water purification systems for residential, office, survival, travel and light industrial use;

(3) a limited selection of "water accessories"-dispensers, coolers, pumps, crocks, jugs and other items to meet the needs of repeat water customers;

(4) a capability to provide in-house and customer water testing and analysis(selected inorganics, metals, sodium, hardness, iron, corrosive gasses such as carbon dioxide, nitrates and bacteria);

(5) an office or sales work area with files, brochures, a computer(perhaps), drafting, Xerox, photographic equipment and other office materials;

(6) a shop for equipment assembly and repair; and

(7) a storage area for inventory and small parts.

We have eliminated the sale of any water conditioning equipment from these water stores for the several reasons listed in last month's article.

>Product Profit Centers and Promotional "Leverage" in the Water Store

The water store, like any other business, is literally a living, breathing entity which requires specific stimuli(money for advertising, product and consumer information, physical labor, etc.) to produce the desired results(sales, referrals, etc.) A simple mode) of this mechanism for the full-service water store is shown in Figure 1.

Figure 1 illustrates four water store profit centers interconnected with "action" or "stimulus" lines. This simple business model has an exact equivalent in automata theory in computer design. The goal in both cases is to make sure that each "center" is linked to other "centers" by clearly defined activities.

If the computer or business model contains centers which do not interrelate with one or more of the other centers, that particular center(product) is literally a "dead end" in the system and does not belong in the water store merchandising program. In other words, if you consider adding a product to your new store and cannot directly relate it to the majority of the other profit centers, chances are good that it will be a financial loser.

By modeling your store's operation, you can also determine in which direction sales activity "flows" and consequently where to place the largest portion of your energies and advertising budget. In Figure 1, it is easy to see that Recurring Water Sales provide a major portion of the leverage which drives the other profit centers.

The majority of advertising dollars should be placed in getting customers to buy water; somewhat less in advertising POU equipment; and the smallest portion of the budget on advertising accessories and warranty work.

Without recurring water sales, the business model(and store) is basically reliant on one-shot equipment sales and hence will realize much lower overall profits. Simply selling water is also a suboptimal situation. One can make a few thousand dollars a year selling water-but will miss out on making tens of thousands of dollars selling POU equipment, replacement filters, membranes, etc.

>Producing Bulk, Purified Drinking Water

This section will provide a general description of the major components required to assemble a system capable of automatically producing, storing and dispensing high-quality drinking water on a large scale in a water store. Refer to Figure 2.

Evaluation of the Raw Water Source. Most water store locations will draw on potable, municipal water systems. In those rare cases where high chloride, iron or manganese levels are found, additional water conditioning components or special purifier designs may be required. It is wise to obtain an assay of the water you plan to process and discuss the test results with the water purifier manufacturer to ensure the proper selection of purifier and conditioning.

Commercial Water Conditioning. Your entire distiller or reverse osmosis investment will depend on the proper operation of the water conditioner. Since the purifier will operate on a near continuous duty cycle, a dual-chamber water softener is recommended. One chamber is on-line while the other is recharging.

Install a sampling valve to periodically monitor water hardness after the conditioner. Using a hardness kit, the water hardness should read less than 1 part per million for proper distiller operation. Automatic hardness control units are available to automatically shut the purification system down if incoming water hardness exceeds preset levels.

Prefiltration: 5-10 micron sediment prefilters and pressure regulators are used just prior to the water purifier. Place the prefilters after the water conditioner to protect against any resin leakage. Without this precaution, conditioner breakdown and subsequent resin leakage may ruin a $20,000 distillation system.

If steam distillation is used, accurate water pressure controls and metering are required to ensure proper "balance" in the vapor compression portions of the system.

With reverse osmosis, pre-pressurization pumps and pressure controls are inserted here to maintain proper water quality and production rates.

Water Purifier: We will focus on distillation in this article.

Steam distillers for water stores are available in capacities ranging from 100 to 5000 gallons per 24 hours. Three distinctly different types of distillers are available: Durastill Inc. makes a 100 gallon per day unit which uses a classical, single stage heating process and uses about 3kwh/gallon. At 10 cents per KWH, this unit makes water at about 30 cents per gallon.

The second system is the Phoenix 120, made by Martinstill. It is a multistage or multiple-effect distiller, making use of waste heat and using about 0.92 kwh/gallon. Using similar KWH costs, the Phoenix produces water at about 10 cents per gallon.

The third type of commercial distillation system is made by SuperStill. These units use classical vapor compression technology and a patented heat recycling mechanism in both the stainless evaporator and input heat exchanger. Three units are available: a 400 gallon per 24hr (110 VAC); 600 gallon per 24hr(220 VAC) or 5000 gallon per 24hr(220 VAC).

We find the 400 and 600 gallon systems produce distilled water at about 3/4 to 1 cent per gallon. The 5000 gallon system will produce water at an even lower cost. For seawater or extremely high chloride environments, titanium distiller components are available.

As we discussed last month, the choice of a distiller is basically a tradeoff of complexity versus volume. The lower volume distillers are easier to operate and maintain and are lower in initial costs but severely limit operations for larger water store operations where 500-2000 gallons per day are typical.

Table 1 gives a "payback" and yearly profit projection for these three distillers, operating at full capacity, six days per week and assuming that the distilled water is sold at 40 cents per gallon. No capital equipment depreciation or investment credits are factored into Table 1.

It is easy to see from Table 1 that the profit vision you select for your store will dominate your decision on a high volume water purifier.

As shown in Figure 2, each of these distillation systems has a "product" and "brine" output-the concentrated brine (or blowdown) exiting through a gravity feed or pressure pump and safety checkvalve to a nearby drain. The product water exits to a water quality monitor.

Water Quality Monitor: This device prevents "bad" distilled)or R/O) water from entering(and contaminating) your storage tanks. It is basically an electronic TDS meter operating at a preset level. For example, when a distiller starts up, characteristically the first few gallons of water are at a higher TDS than desired.

The monitor system diverts this water to the drain and then connects the distiller output to the storage system once the preset TDS level( 1-1 parts per million for distillation; 15-20 parts per million for R/O, for example) has been attained.

Product Water Pumping System: For the higher volume systems, this assembly is essentially a 100% duty cycle, high pressure pump which moves the distilled water from the production area to the storage tanks. Distilled water production rates will determine the type of pump and, if necessary, any intermediate product water storage system.

Storage System: This is where your distilled water is stored and, subsequently, dispensed from. If ;our distiller is located in the rear area of the store, and customers dispense water in the front area, a logical location for the storage system is in the front area. This places considerable less burden on the water dispensing/pump system.

Some distiller manufacturers have fabricated large storage tanks for use in are circular(80, 150 gallons). Unfortunately, both designs are bulky for their rated volume and are unnecessarily difficult to clean(4-5 inch access holes at tops).

In our stores, we eliminated both of these problems by fabricating our own stainless-steel tanks(150 gallons each) with dimensions 2'x2'x5' high with a completely removable top "hat" for cleaning and periodic sterilization. (The Department of Health likes this design very much).

For larger storage capacities, these compact tanks are linked together at the bottom and a "high-level" sensor is placed midway in the tank array to signal "full" and thus automatically shut down the remotely located distiller(s).

Dispenser Pumping System: This assembly is a "demand-operated" pumping unit which dispenses distilled water whenever the customer turns on one or more dispensers. Pressure switches control the "demand" function. We recommend at least two pumps in tandem to forego complete shutdown of the system in the event of a single pump failure. Shut-off valves are good investments between the various lines leaving the storage system and feeding the dispenser pumping system.

Ultraviolet Sterilization: Although ozone is also acceptable by most state health agencies for sterilization of distilled water in this type of application, we have found high-powered ultraviolet (U/V) systems to be compact, easy to use and service.

Having checked the bacteriological sterility of water treated by "in-line" U/V systems, and U/V systems placed inside storage tanks, we find the "inline" system to be more reliable. Besides, if you have a dozen, 150 gallon storage tanks, U/V costs can get a little bit out of hand if a unit has to be placed in each tank.

We recommend a U/V system capable of at least 30,000 micro-watt-seconds/cm2 and capable of handling at least 10 gallons per minute for each group of 3-4 dispensers. One of our stores uses a 30 gallon per minute system. Another store uses several 10 gallon per minute systems due to the physical layout of the dispensing stations in the showroom.

Extremely important to the design is a control line from the U/V system to the pumping unit-disabling the pumping unit when the U/V system is inoperative or putting out U/V energy below a preset level.

Sanitary Dispenser System: Much work has been done in the vending machines in area of sanitary dispensers. Public Health officials are very concerned about "recessed" designs to prevent bacterial migration into the tubing and storage components.

Although shiny, chrome-plated bartype faucets are readily available from many catalogues, we recommend staying with components which meet health department regulations for cleanliness and safety. Check with your local health department before spending any money on this component. We recommend daily sterilization/cleaning of these dispensers with hydrogen peroxide or other bacterial inhibitors. Here's where your bacteriological lab equipment really pays off.

Spillage Sump Pump: The last component in this system is simply a mechanism to pump overflow or spillage water which occurs in the dispensing area to a remote drain. Again, this line is protected from backflow by the check valve shown in Figure 2.

There it is, perhaps simple on the surface, but a rather complex array of interconnected equipment working in harmony to precondition, purify, store, sterilize and dispense drinking water on a large scale. Aqua Technology pioneered the use of the system components illustrated in Figure 2. Seeing the success we have had with these components, most other water stores in operation today are using the same components.

POU Profit Centers: This article is not a promotion for the use of any specific type of POU equipment in a full-service water store. Those decision are ones which you will have to make on your own. Most of all, be comfortable with the manufacturer, and remember that if they can't supply reliably-designed equipment and parts in a prompt manner, you won't be in business very long.

Should you have any questions regarding our personal choices of distillation, filtration, reverse osmosis, U V, microfiltration, whole-house filtration or other POU systems in our stores, we would be happy to share this information with you privately on the phone.

Summary: In closing may we suggest that if you elect to pursue the "water store" business, you go at it aggressively. This business area is new---and drinking water quality is on the decline. If you don't build such a store in your area soon, chances are someone else will. Use first class equipment throughout---don't skimp.

Be prepared for periodic disasters---such as water spills, equipment failures. Be prepared for long hours and hard work. Ad, be prepared for good news---long lines of customers with empty jugs and lots of customers anxiously seeking POU water purification systems.

The full-service water store is clearly an opportunity whose time has arrived.


Editor's Note: This is the second in a series of articles on "full-service water stores." Contributing author Gene Shaparenko, well-known Silicon Valley engineer, is owner of the chain of Aqua Technology's Water Stores in the San Francisco Bay area.

Shaparenko holds advanced engineering degrees from several major universities and has been a consultant to several point-of-use water purification system manufacturers, and currently serves as a contributing editor for several local newspapers, radio and TV stations, as well as national health and water treatment periodicals.