What happened to the sachet pure water business in Nigeria? Part 1

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What happened to the sachet pure water business in Nigeria? Part 1

Clean water is a fundamental and basic need for human beings. Our systems are set up in a way that drinking water every signed day is non-negotiable, just as food and breathing is. Though in past times, we all source our drinking water directly from sources like wells, borehole and other natural sources of water, the advancement of technology over time has given us the opportunity to access clean, germ free water. This helps prevent diseases like typhoid which may result from contaminants inside water from natural sources which we used to drink. Clean water also brings us a balanced body system and good health.

In recent times, sachet water business has continue to become one of most promising and popular businesses in the country today. This is of course a result of its high demand and the need for people to get a pure source of drinking water and also for an affordable price. Sachet water is very popular in Nigeria.

The stringent requirements of safe drinking water add to its scarcity and shows that in most cases the problem is not availability of water but inability to obtain quality water. Safe drinking water is water that has been treated and tested for harmful and potentially harmful substances and has met or exceeded drinking water quality standards or water with microbial, chemical and physical characteristics that meet World Health Organization (WHO) guidelines or national standards on drinking water quality and this is where the sachet water comes in.

Sachet Water Business is a common form of selling pre-filtered or sanitized water in heat sealed bags (polyethylene sachets) and are especially popular in Africa originating from Nigeria and spreading to other West African countries. Sachet Water are cheaper to produce than plastic bottles, and easier to transport.

Many years of neglect by government and inadequate investment in public infrastructure has left the public drinking water supply in Nigeria in an unreliable state. The society has therefore taken to several adaptive measures of alleviating this stress. One of these is dependence on sachet water, popularly referred to as ‘pure water’.

How sachet pure water was invented in Nigeria: You remember DIL pure water? DIL means Deagbo Industry (Nigeria) Limited.  It is Nigeria’s first ever sachet water producing company. Late Ibadan born entrepreneur, Sir Isaac Adeagbo Akinpade, pioneered sachet pure water business in Nigeria. In 1994, he became one of the pioneers in manufacturing of water packaging in sachets popularly called “DIL PURE WATER”.

STARTING A SACHET WATER BUSINESS IN NIGERIA: In Nigeria today, there are quite a number of companies involved in the business as individuals are keen to tap into the promising business option which also boasts of a large market for the sachet water. Sachet water is the simplest and easiest source of clean water for the average Nigerian. And for the business, there are quite a number of options that can be selected from. For example, you can decide to be a manufacturer and own a sachet water producing factory or deal in the wholesale aspect of the business where you’ll be one of the large scale suppliers of the product into the market after receiving them from the producers. There are also options for retailers who eventually help with getting the sachet water to the consumers.

Starting a business like this comes with a high cost especially if you’re going large scale and you’ll be producing the sachet water on a large scale with many bags to be produced in a day. The cost could be a lot lesser if you’re not going into large scale as there are options for equipments that can be used for small scale production and still get the desired result even though it requires even more work. This operating costs of the business prepares the mind of the entrepreneur to look for ways to get sufficient funds that can help with properly running the business.

Also, there will be need for workers who might not need to have any special skills relating to the production process except they will be in charge of any machine or equipment to be used in the company. You don’t neccesarily need a lot of workers to get the business running and even in some cases when people decide to start small scale, they might choose to do the work alone and do everything involved in the business with little or no help. It is very possible as the small scale aspect requires just few equipments though it can prove to be very stressful and at the end of the day, you’ll still need people to help with distribution.

The sachet water business is highly profitable and it is something that might not need any kind of passion or motivation or even skills except to run the business and make profit. You don’t need any educational qualifications for the start of the business. It’s not something that is studied in school, just a knowledge of the basic entrepreneurial skills that can make you understand how to run the business will be enough to help you run and sustain the business. Factors like location and marketing strategies will also prove to be useful in the success of the business. It’s not an easy business but at the same time, nothing good comes easy and poor management might plunge the business into failure.

What are the challenges in the pure water business?

Some of the difficulties facing the production of Pure water in Nigeria are:

Abundance of drinking water: Many people don't patronize the commercial water dealers especially when they have good sources of water in their neighborhood. This is another challenge that you might encounter, but you'll still sell to the consumers if you connect with suppliers. The market places, schools, bus-stops and event centers are all good places to distribute the water to the consumers.

Lack of Adequate water access: Most pure water companies have to travel for a very long distance to get quality and hygienic water. This problem has greatly influenced the overall production cost of pure water in Nigeria.

Increase in Price of materials: With the rate of inflation in Nigeria, Pure water producers have complained several times that the production of pure water has gone far above the roof and many of them have been forced to close down their businesses. An increase in prices of commodities such as fuel, nylons, and other materials has greatly influenced the production cost of table water.

Double taxation by the government: This is a sector-wide problem that most stakeholders have been complaining about. The taxation laws in Nigeria are not unified leading to duplicity in tax payments, which eventually led to an increment in the cost of production.

Regulatory Bureaucracy: Pure water business is a very sensitive business that requires strict monitoring, however, most times the regulatory agencies engage in bribery and corruption instead of their constitutionally legal duties.

Vehicle Maintenance: This is one of the most difficult challenge faced by pure water companies, as a pure water company, you can not survive the business without a distribution vehicle. This vehicle will work round the clock and will constantly require maintenance and repairs.

Power: This is not restricted to pure water business alone. No business can also survive in Nigeria today without plans for an alternative power source. Due to the epileptic supply of electricity, you will need to purchase a strong generator that will be capable of running your business.

Other challenges include:

Insufficiency of storage space

Limited loan facilities for dealers in pure water

Mistrust between the producers and distributors

Increase in production rate

High market competition

Risks of thieves and criminals

High cost of maintaining the company at large

How do you succeed in the pure water business?

Success in this line of business depends on several factors. Below are the steps you need to take to succeed in this line of business.

Choose a good location: One of the most important hallmarks of any business is a good location. Pure water business requires good layout with access roads in a hygienic environment. Also, it is important to locate your factory near residential areas like estates where the demand is higher.

NAFDAC registration: This is one of the most difficult hurdles intending businesses in this sector face. To produce pure water in Nigeria, your brand, products, and process must be certified by the National Food and Drug Administration and Control (NAFDAC).

Hire staff and pay them well and on time: You are not going to be running this business alone, therefore you will need the services of about 5 staff including a driver and a motor boy. Pay your staff a bit above the industry standard and on time, to motivate them.

Unique taste: Water should be tasteless right? However you should make yours very much unique from others. It could be packaging. I remember a new water industry that went viral March 2018, the packet alone looked like it was a drink. Till date many people still patronize the brand.

Attractive label: As I have said earlier, you should make your label attractive. You can use amazing graphics to design it and you will see it selling itself. People love beautiful stuff and would soon become your customers for life.

Use an easily remembered name: Names like Logos Table Water, Eva Water and the rest of them are easily remembered right? In anything you're doing, always make sure your name can be easily remembered.

Always ask for feedback: Drop a customer care line and if possible make it toll free. Facebook and Twitter are also awesome for getting feedback, since almost everyone has an account now. Hire polite staff for that and make sure to put into consideration whatever people say. There might be millions of complaints but only those who love you will actually reach out to you.

Water remains a basic necessity for human survival. What is sad about this is that not much of the available water is drinkable, and the government does little to meet the demand for clean water. A good pure water company can thrive well in filling this gap. A pure water production business in Nigeria is not without its challenges, but with a good plan and management, it will rake in surprising profits.

Due to advancement and awareness created to the general public, alot of people now prefer bottle water to the regular sachet water as they see it to be more pure than the sachet water and without any hazard to their health or the environment and this has in some way reduce the consumption of sachet water but it is still very much a profitable business as demand for sachet water still remain high among the poor and middle class and quenching of thirst comes first in their eye even before the health or environmental hazard the sachet water may cause.

So it is fair to say the sachet water is still thriving and will still thrive well as a lucrative business in the foreseeable future if the challenges are tackled.

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