My friend Steve Nickolas, who has been in the beverage and food industry for over 30 years, has gotten me interested in drinking healthy water again. You may be like me and have drank soda most of your life, but are realizing that it's time to cut back and start getting healthy. Not only is water better for your health but for your skin. Steve is planning on launching a new kind of water soon that will contain vitamins but will not have any taste. Here is an interview with Steve in the Phoenix Business Journal a few years ago where he discussed his latest bottled water venture, Apani Inc.
Phoenix Business Journal
by Paul Giblin
Apani Inc., a four-year-old venture that recorded sales of $500,000 in 1991, is on track to turn $8 million in sales this year, Nickolas says. The goal is to top $100 million in sales by 1996.
Apani water is distributed in 22 states now and is scheduled to be on store shelves in 48 states by the end of the year, he says.
The potential remains to do even better, but the market for bottled water is growing more quickly than the company can. The work force at Apani's bottling plant at 2032 W. Lone Cactus Drive, Phoenix, has increased from five employees a year ago to more than 40 today.
The backbone of the company is its line of five-gallon bottles of purified water. The jugs generally are used with water coolers in offices and homes around the Valley.
"The real long-term money has been, and always will be, with the bulk water," Nickolas says. Yet that segment of the market represents only 15 percent of Apani's total sales.
The boom segment of the bottled-water market is the personal-size, nozzle-top bottles. That segment was nearly non-existent two years, ago but has increased dramatically.
"We in the industry have embraced this stuff, and we have bottled the hell out of it, and consumers have bought the hell out of it," says Nickolas, who previously launched The Water Man Co., a successful bulk bottled-water outfit in Kahului, Hawaii.
Apani water is marketed to the health-minded baby-boomer set. The water is labeled as "sodium free" and "purified by reverse osmosis and oxygenated for taste and purity."
The Phoenix tapwater goes through a seven-step purifying process that Nickolas claims removes calcium, chlorine, dissolved biological matter and a variety of other compounds that nature apparently never intended. The water is independently tested by American Analytical Laboratories, Phoenix.
The source for Apani's water offers no special advantage. Pittsburgh tapwater would work just as well as Phoenix tapwater, Nickolas says.
"Well water, tapwater -- it does not matter where we get out water from, because we make it exactly what we want it to be," he says.
"We could have an ocean outside the front door and we could drop a line into the ocean, and we'd get the same thing. It's a scientific process. We know exactly what's in the water: nothing."
The packaging is nearly as important as the water. The nozzle-top bottles come in three sizes: 16.9 ounces, 33.8 ounces and 50.7 ounces (half-liter, one liter and 1.5 liters).
The current Apani house brand label took about four years to design. It features the name in white letters against a blue field. It also sports Hawaiian flowers against purple-and-pink trim and a few strategically placed water droplets. The nozzle is pink and yellow.
The design could change overnight, says the former political campaign strategist.
"The marketing, the packaging, everything we do will be the hippest thing we can do at the moment we're doing it," he says.
Apani also distributes water with co-marketing labels. The specialty labels feature the logos of events or venues where the water is sold.
Apani has been co-marketed with the Phoenix Suns, Arizona Cardinals, America West Arena, the Phoenix 500 air races, West-World Biosphere 2, Old Tucson Studios and the Jim Bruner '94 campaign.
The co-marketing campaign also has caught on with Nevada casinos, including the Stardust, Lady Luck, Luxor and Ramada Express.
It has also worked with a number of professional sports teams and universities, including the Los Angeles Lakers, Los Angeles Kings, University of Arizona, Arizona State University, the University of California at Irvine, San Diego State University and Texas Tech University. Furthermore, the rights to the World Cup soccer games this summer have been secured.
Some of the co-marketing labels incorporate elements of the Apani house brand label. Others use altogether new designs, with the Apani logo in a corner.
The co-marketed bottles represent about 10 percent of Apani's total sales, Nickolas says. The concept will be allowed to grow only to 20 percent, in an effort to protect the Apani house brand.
The lone major limiting factor in the market is the lack of availability of plastic bottles. Apani uses several suppliers, which sometimes leads to slight variations in the shape of the bottles from one batch to the next.
"We buy them wherever we can. The bottles are in very short supply," Nickolas says.
Most plastic manufacturers reserve most of their production for soda companies. Only about 5 percent of all plastic bottles produced nationwide are used for water.
Apani has struggled against the crimp in supply. The lack of bottles remains the only cap on a business that otherwise is overflowing, Nickolas says.