Tapping a new market: Boise County couple to export bottled water to China
When Scott and Angie West left the hospitality industry in 2008 running a lodge and restaurant left them ragged they pondered other options for a family business.
They found the answer beneath their feet: a spring that runs under their Boise County home. The water supplied the former Rocks Lodge and their home next door, with plenty left over to share.
In fact, travelers along Idaho 21 for years have stopped to fill up jugs with spring water at a spigot outside the lodge. That led Scott West to this revelation:
Holy cow, we could bottle water.
Water rights to 80.79 gallons per minute came with the lodge and 5 acres that West bought for $182,000 in 1991.
In 2008, after shuttering the lodge/restaurant, the Wests installed $50,000 worth of bottling equipment in the old lodge building and began selling Rocks Natural Idaho Spring Water.
Today, Rocks Water is in stores, restaurants and offices across Idaho. Its carried in Albertsons, Jacksons stores and the Boise Co-op and will be available at Whole Foods.
The Wests would love to sell Rocks Water in area public schools and Boise State University. But many places are off-limits because of contracts with large beverage companies.
Coke and Pepsi own everything, Scott West says. We told Boise State, We will give you water, seeing value in just getting exposure at the university. But their Coca-Cola contract says they can carry no other products.
Rocks Water is just an ant in the industry, as Scott West puts it, but that hasnt kept the local entrepreneurs from dreaming big.
When they got a call in late May from the Idaho Department of Agriculture about an importer from Shanghai, China, interested in finding a bottled water supplier, they agreed to meet with her the same day.
This buyer was looking for a quality product, and she wanted to work with a smaller company, says Kim Peterson, a trade specialist for the Idaho Department of Agriculture. She wanted to work directly with the owner.
SHANGHAI CALLING, WATERSHED MOMENT
Jenny Gu, an importer/distributor from Shanghai, has been to Idaho several times in the past to meet with suppliers.
Peterson says Gu has imported bottled water from Alaska, and shes been looking for alternative supplies.
Can shipping water from landlocked Idaho to China be cost-effective?
You can find good freight rates, Peterson says, noting that high-end wine from Idaho is shipped to Taiwan. It is really counterintuitive, but we see it all the time.
Gu spent a couple hours touring Rocks Water and talking to the Wests. She was pleased after sampling the spring water.
She said, through an interpreter: Youre going to be a very wealthy man.
Peterson says the importer considers the water a premium product because its bottled at the source and has no additives.
With help from officials at Idahos trade offices in Shanghai and Taiwan, the Wests were able to negotiate a contract with Gu.
Rocks Water will ship 35,000 bottles of water (both half-liter and 1 liter bottles) to Shanghai. It will take about a month for the bottler to stockpile that amount while continuing to serve Idaho customers. The bottled water will be trucked to Seattle and put on a ship to Shanghai.
This is 10 times bigger than our biggest order, Scott West says. Its kind of like that watershed moment that youve been working for.
If the spring water is well-received in Shanghai, the Wests expect to receive more orders.
SALES GROWING, BUT NOT YET PROFITABLE
Total U.S. bottled water consumption was 9.1 billion gallons in 2011, up 4 percent from 2010, according to the International Bottled Water Association.
Sales in the early 2000s were affected by the recession and the backlash over the environmental impact of plastic bottles. (In 2009, Rocks Water began offering an eco-conscious biodegradable bottle.) The association says the majority of bottled water companies in the United States are very small, with 10 employees or fewer, and less than $10 million in annual sales.
The U.S. Food Drug Administration, which regulates bottled water sold across state lines, says there are fewer than 10 companies in Idaho that bottle water and sell it out of state.
But there could be more small companies that sell in-state only. Those companies are regulated by local health districts. State health officials have no estimate of the number.
Rocks Water sales have grown about 25 percent each year. One way the Wests have built the business is through private labels, replacing the Rocks Water label with labels promoting customers businesses or events. The first was for the Owyhee Plaza Hotel, where the bottled water is placed in guest rooms as an amenity.
The private labels some of which are designed by clients, others by Rocks Water staff have been used by sports tournaments, trade shows, restaurants, weddings, banks, real estate agents, resorts and car dealerships. The Wests have sold water under about 100 private labels since 2009.
Despite the stream of new clients, the Wests havent yet turned a profit. They say they are close to having their bottling equipment investment paid off the $50,000 was a lease/purchase plan, and they have a handful of payments left.
They paid $12,500 for the box truck for deliveries and are paying about $450 a month for warehouse storage.
This year will be our first profitable one, says Scott West, whose income from his full-time job as a Boise County sheriffs deputy has helped keep the business afloat. Well do better than breaking even. Much better if the water does OK in Shanghai.
The Wests developed some business acumen by running the lodge/restaurant. They knew little about the bottled-water industry, and their business plan probably wouldnt have passed muster with most MBAs.
Were learning as we go, Scott West says.
Theyre thankful for help from the Idaho Department of Agriculture, including the Idaho Preferred program. They benefitted from introductions to potential clients, the Wests say.
For example, they werent sure who to approach at Albertsons. We met with the Department of Ag people, and they said, Well introduce you, Scott West says. That happened the same day at a trade show for Idaho retailers, restaurants and products. What they do is really phenomenal.
DAILY OPERATIONS
The legend behind Rocks Water spring which is recounted on the label is that miners were digging for gold in 1903 when one struck the aquifer.
They said he was blown across the canyon, says Angie West, recounting local lore.
The water is 54 degrees when it comes out of the ground; the temperature is consistent year-round. It is moved into large cisterns inside the first floor of the lodge building through a gravity-fed collection system.
The Wests have opted not to heavily filter the natural spring water, believing it tasty and healthy as is. The minerals listed on the label include calcium, magnesium, potassium, fluoride and sodium nitrite.
They also dont add anything to the water. Our fluoride is naturally occurring, Scott West says.
The Wests buy empty bottles from Evergreen Plastics in Portland and store them at a warehouse in Boise. The bottling is done on the first floor of the lodge building.
Four of the Wests five employees are involved in bottling and delivery; the fifth works primarily in the office, which is on the second floor.
Rocks semi-automated bottling is labor-intensive. Two workers place bottles under automatic fillers. The workers put the caps on, then the machine twists them tight. The workers then place the bottles in the labeler. The bottles then go into another room, where they are placed in cardboard trays and shrink-wrapped.
The current setup allows them to produce 12 bottles a minute. Theyd like to be able to fully automate the process, allowing production of up to 80 bot
tles per minute, but that would require an investment of about $300,000 for new equipment.
The bottling is done from 8 a.m. to 2 p.m. Tuesdays, Wednesdays and Thursdays.
Numerous distributors deliver the water to customers. A Rocks Water truck also delivers water three to four days each week: Idaho City on Tuesdays, Twin Falls and Sun Valley on Wednesdays, and the Treasure Valley on Thursdays and Fridays.
FORMER MARINES DIVIDE, CONQUER
The Wests, both 20-year veterans of the U.S. Marine Corps, took part in the same basic training class but didnt meet or become friends until 20 years later while stationed at Camp LeJeune in North Carolina, just before they retired. They were planning their post-military lives.
I wanted to go somewhere with wide-open spaces, says Angie West, who had done research on Idaho before she knew that Scott had lived in Idaho and owned a business here.
Scott was stationed at Gowen Field in the early 1990s. The military was downsizing at the time, so he decided hed better come up with a Plan B.
He saw an advertisement for the Rocks Lodge and Restaurant, so he dropped in for a beer. A month later, he bought the place. He kept the business, though he leased it to others while he remained stationed back East.
Angie is a mother to six children, including four from a previous marriage (three in their 20s and one teenager) and twin 7-year-olds from her marriage to Scott. She works closely with employee Rick Lovan on the marketing and art, promoting, designing and producing the private labels.
Scott has been a deputy since December 2006, working four days on, then four days off. He was drawn to the job for more than the paycheck.
I miss the Marine Corps. I miss it every day the camaraderie, the people, the common belief and goal thats not focused on themselves, he says. Hes in charge of Rocks Waters operations, managing employees, scheduling and bottling.
Im having fun, Scott West says. I really believe the water is going to take off and be awesome.
We know its only a matter of time.
Katy Moeller: 377-6413
ROCKS NATURAL IDAHO SPRING WATER
The U.S. Federal Drug Administration regulates bottled water as a food product. The type of water must clearly printed on the label.
The International Bottled Water Association offers these definitions:
Spring water is derived from an underground formation from which water flows naturally to the earths surface. Spring water must be collected only at the spring or through a borehole tapping the underground formation feeding the spring. Spring water collected with the use of an external force must be from the same underground stratum as the spring, must have all the physical properties before treatment, and must be of the same composition and quality as the water that flows naturally to the surface.
Purified water has been produced by distillation, deionization, reverse osmosis, or other suitable processes while meeting the definition of purified water in the United States Pharmacopoeia, a book of pharmacopeial standards. Other suitable product names for bottled water treated by one of the above processes include distilled water if it is produced by distillation, deionized water if it is produced by deionization, or reverse osmosis water if the process used is reverse osmosis. Alternatively, drinking water can be used with one of the purifying terms defined above (e.g., purified drinking water or distilled drinking water).
Mineral water is natural water containing not less than 250 parts per million total dissolved solids. Mineral water is distinguished from other types of bottled water by its constant level and relative proportions of mineral and trace elements at the point of emergence from the source. No minerals can be added.
Sparkling water, after treatment and possible replacement of carbon dioxide, contains the same amount of carbon dioxide that it had as it emerged from the source. Sparkling bottled waters may be labeled as sparkling drinking water, sparkling mineral water, sparkling spring water, etc.
Artesian water/artesian well water is water from a well that taps a confined aquifer (a water-bearing underground layer of rock or sand) in which the water level stands at some height above the top of the aquifer.
Well water is water from a hole bored, drilled, or otherwise constructed in the ground, which taps the water aquifer.
