How to start a bottled water business in South Africa

The bottled water industry has been on a constant rise fuelled by people who are becoming more health conscious and staying away from sodas. This is a guide on how to start a bottled water business in South Africa.

Overview

Bottled water businesses take water, purify it, bottle it and sell it. Some choose to specialize in a certain niche e.g., spring water, mineral water, or sparkling water. This is a profitable business with a high return on investment, with returns ranging from 100% to 500%. It also has very high barriers to entry, which is why it’s dominated by a few big companies.

Bottled water is a convenience; it’s very difficult to get water once you are out of your house. It’s much easier to go into a store and buy bottled water than to knock on people’s houses asking for water. It has also been fuelled by the rise of healthy conscious people who are trying to avoid sodas and drink as much water as possible. This is an industry that is expected to grow significantly in the near future.

Choose the right location

The location of your water bottling factory should ideally be as close as possible to your water source. You will save a lot of money in transportation costs; transporting the water can also be a nightmare if you are too far away from the source. It’s always best to be within a kilometre of your water supply.

Your factory can be anywhere, it doesn’t have to be in a high-income neighbourhood. It can even be in a village, if the village is not too far away from the town. Your primary objective should be getting as close as possible to your source of water.

Build/lease operating premises

There is a high chance that you will need to build the operating premises. There might not be adequate premises for lease in your chosen location. Building will cost you a lot of money but the building will automatically become an asset, so this is not money wasted at all. Even if it happens that your business fails, you can always sell the building and recover your money.

The good thing about the premises is that a hall is usually enough, you don’t have to build multiple rooms. This can make this process a lot cheaper. It’s better to lease the operating premises if you have the option to. The money that you save can be put towards running the business.

Buy equipment

Equipment for this kind of business is really expensive, it is the ultimate barrier to entry. You can spend anywhere between R500 000 and R5 million on just equipment. Here is some of the equipment you will need.

Storage tanks
Filling machines
Water treatment machines
Filters
Conveyors
Sealers
Water sterilizers
Water dispensers
Bottle loaders
Automatic bottle washers
Labelling

You will also have to find a way to generate an alternative power supply. There is no shortage of load shedding in South Africa. This can negatively affect your business, you might not meet certain production targets because of power outages. Having an alternative power source guarantees that everything will run smoothly.

Some water treatment processes strip water of its natural minerals, most businesses inject minerals into the water artificially. You will need to have a mineral injection facility which may cost you thousands of Rands.

Buy a distribution vehicle

You will need to have a vehicle for distributing your bottled water to supermarkets and grocery stores. It’s often best to buy a used truck, a brand-new truck will cost a lot more money and it will take much longer before you break even.

Register your business

You have to register your business, first with CIPC as a private company, which only costs R175 and with SANBWA. SANBWA is a healthy regulatory body that will give you a water production business license.

Hire the right people

This is not an operation that you can run completely on your own, you need people to assist you with multiple tasks. It’s always better if you start this business with some experience, this makes it easier to know who to hire and how many people to hire. It’s always best to start with some experienced people on the critical roles.

Staffing requirements may include machine operators, drivers, maintenance and clerical staff.

Market your business

The marketing for this business is divided into two, you have to market to the general consumers and also to grocery stores. Grocery stores won’t order from you again if your brought is not bought, if people don’t buy it then it’s just wasting shelf space. It’s important that you market your product to consumers as well.

You can do this by giving away banners, t-shirts and other forms of advertising, your main focus should be on brand awareness. It’s also important to have a website so that your customers can learn more about you.

Conclusion

This was a guide on how to start a bottled water business in South Africa. Do you have any thoughts or questions? Comment below.

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