The Road Ahead

January 8, 2013

Industry experts weigh in on what is to come in 2013

haataja_wqa_industry forecast
Dave Haataja, Executive Director, Water Quality Assn.

With another year on the books, it is time to look ahead to 2013. As always, the water treatment industry will face a variety of challenges and opportunities in the coming months. Domestically, new regulations loom — some positive, some negative — as California continues to set the legislative tone for the nation. Globally, opportunties await for companies ready to take the international plunge, but the challenges of certification remain. Increasing water scarcity and drought continue to trouble water supplies and quality — an invitation for the water industry to apply treatment and reuse technologies in new ways. With so much on tap in the next year, Water Quality Products asked four industry leaders for their input on what is to come.

New Year, New Challenges

By Dave Haataja

In states across the country, as well as in Washington, D.C., the beginning of a new year means the dawn of new legislation and regulations. In most state capitals, politicians begin drafting bills in January, and during the following months, special interest groups and advocates work to put their stamps on them.

This year, our industry is facing notable challenges and opportunities on a number of levels. The outcomes will have resounding impacts for many years to come. In addition to possible new bills, regulators are hard at work drafting potential new restrictions on our products.

In all cases, the Water Quality Assn. (WQA) and local leadership are using all of their resources to protect the industry while working for the public good. As in the past, WQA is deploying lobbyists, personal contact with policymakers, and public education as effectively as possible.

The following are the major developments we are staying on top of.

California Third-Party Certification Bill

WQA and the Pacific Water Quality Assn. (PWQA) will continue working with interest groups and legislators to ensure passage of the third-party certification bill. As expected, the bill came up against legislative deadlines in 2012, but passage this year seems more likely as we continue lining up support. In the meantime, the agency responsible for certification has committed to hiring another staff member to expedite the process.   

If the bill passes, companies will no longer be required to wait for the state to certify their products. Instead, accredited third-party certification will be acceptable. There are some conditions, such as fees and Internet posting requirements, but the change would help move products to consumers more quickly.  

Because California exercises enormous influence over commerce nationally, the success of this bill should be felt far beyond the state’s borders.

California POU Bill

WQA will continue monitoring and working on the point-of-use (POU) bill, originally put forward in California last year as SB 962. Currently, only communities with fewer than 200 service connections are allowed the option of using point-of-entry (POE)/POU devices where central treatment is not economically feasible.

Legislation passed the state Senate last year to make this available to larger communities with up to 2,500 connections. We do not expect to see a bill with a number that high, but a significant increase beyond 200 is possible this year.

Passage by California of any bill of this nature will help buttress the argument that final barrier approaches should be attempted everywhere. One of the helpful factors that may lead to passage is a recent emphasis in the state on ensuring that rural and impoverished communities have access to safe water. WQA provided testimony on POE/POU devices at a hearing on this issue.

Arizona Salinity Committee

Industry leaders put forward a salinity control plan for the Arizona committee making recommendations to the governor and state legislature. The plan includes new performance standards, public education and increased professionalism.

The committee was established by the state in 2011. Composed of public and private stakeholders, it is set to report to the legislature with recommendations soon. We will continue working with policymakers to push these comprehensive solutions. If any legislation flows from the work of the task force, it would not be enacted until next year, and provisions could be delayed for several years to allow companies time to make changes.

Green Chemistry Alliance

Under prospective rules in California, green alternatives will be required to replace hazardous chemicals in nearly every walk of life, from product packaging, to furniture, to household cleaners, to clothes.

Early drafts of the rules brought broad opposition. WQA joined the Green Chemistry Alliance, a large coalition opposing the new regulations. The regulations as drafted were vague and broad, and could be damaging to the industry. Nearly every industry doing business in the state is expressing concern.

These regulations did not include clear or science-based processes, and could allow harsh penalties, from product restrictions to outright bans.

State regulators have since agreed to revisit the rules. WQA and other industry organizations will be watching and responding to try to ensure that any regulations are not unduly burdensome.

Other members of the Green Chemistry Alliance include Amway, Boeing, the California Chamber of Commerce, Chevron Corp., The Dow Chemical Co., DuPont, Ecolab, Exxon Mobil Corp., Goodrich Corp., Honeywell Intl. Inc., Johnson & Johnson, Northrop Grumman, Proctor & Gamble, and dozens of other associations and companies.

Lead Content Law
The federal law mandating reduced lead content is scheduled to take effect in less than one year. This means manufacturing may need to be retooled, and inventory should be examined.

The new law mandates that, starting Jan. 4, 2014, pipe, pipe fittings, plumbing fittings and fixtures must meet a weighted average lead content of 0.25% or less. Many states already have implemented their own versions of this law. Several NSF/ANSI standards address these new lead content mandates, and WQA provides testing and certification.  

Legislative Outreach

As we have often seen, developing relationships with legislators and their staffs before a crisis arises can be the difference between success and failure. It is crucial that our representatives on the state and federal levels understand our industry.

WQA is launching a Legislator Outreach Program, designed to help association members connect with their legislators and discuss the benefits of our products and services. A handbook provides key suggestions on how to go about establishing strong relationships.

WQA also is providing individualized briefings about each legislator, offering one-page summaries of their backgrounds and critical positions, particularly related to business and water issues. We also are providing briefings on the state of politics in each state, to ensure that members go into their meetings fully informed.

Global Opportunities

By Rick Andrew

Last year, I shared with you that I felt that globalization was the key trend impacting manufacturers and dealers. A year later, I continue to see this issue as the most impactful on our industry.

More than ever, manufacturers are sourcing and selling globally. For example, some products being manufactured in China are being imported into the U.S. for sale. This is no  surprise, but I also know of situations that are just the opposite: Products being manufactured in the U.S. are being exported to China for sale.

This may be surprising, not only when considering the economy, but also China’s strict importation laws. In China, water treatment products require testing by a government laboratory and approval by another government group once testing is complete. Additionally, there must be an accountable party in China as part of any approval to import a product into the country.

This is just one example of the complexity that comes along with the opportunities that globalization brings to the marketplace. There are many other examples — each country has its own nuances to be considered in the overall analysis of the business climate, market and regulatory environment.

In many developed countries, there are regulatory requirements regarding product safety and sometimes function. These requirements are often unique to a particular country, with limited recognition, relevance or acceptance elsewhere.  

The most widely recognized and accepted standards for POU and POE products globally are the NSF/ANSI Drinking Water Treatment Unit standards. This is no accident, as NSF focuses on educating applicable government bodies internationally about the credibility of these standards.

These educational efforts have led to generally positive results, with varying degrees of acceptance in many countries. Europe remains the most difficult to influence, due to firmly established national requirements, ongoing efforts to harmonize requirements within the European Union, and other reasons, including political and economic factors.

Given the complexities of the global regulatory market, there are those who wonder whether there is truly a way to manufacture a single POU or POE product that meets requirements globally, or whether the requirements are so disparate that several different product models or lines would be required. Considering the technical challenges presented by water distribution infrastructure and water quality differences in various markets, the answer to this question becomes even more complex.

These water distribution infrastructure and water quality differences are significant. In many developing nations, water pressure is low and water quality is poor. Water is subject to high turbidity and microbiological contamination, and sometimes is chemically contaminated. Increasingly, manufacturers are looking to new technologies and low-cost approaches to serving developing markets appropriately and affordably.

In the last few years, there has been a significant increase in the number of relief organizations focused on providing water treatment solutions to developing nations. Organizations such as the World Health Organization have put tremendous focus on educating these groups, as well as local governments, on the correlation between health and drinking water quality, and providing systematic approaches to evaluating water treatment technologies and plans. This trend will increase in the future as the economy continues its trend of globalization from developed to developing markets.

Looking beyond 2013, I see the globalization trend accelerating. As I concluded in 2012, opportunities and risks for all players in the global water treatment market result from this trend. Those who look forward and act accordingly will be well served by the opportunities, whereas, the risks of failing to recognize the trend and act on it may prove to be damaging to those who do not

Preserving a Precious Resource

By Frank A. Brigano

A global food crisis resulting from the 2012 drought may be the top news story in 2013. A shortage of agricultural products and a rise in their costs are predicated. This points to the importance of water — both its quantity and quality.

The U.S. is fortunate to be bountiful with water, even though that bounty is regionalized. Last year’s drought, most dramatic in the nation’s midsection, resulted in damaged crops and reduced herd sizes, as well as lowered water tables and reservoirs. A prime example of the drought’s impact is in Texas, where building desalination plants has become economically viable due to water scarcity.

This issue is extremely important to our industry. As water levels fall, salts and other contaminants could become more concentrated. Thus, there is an opportunity to improve water quality for consumers. POU or POE equipment can improve taste and reduce hardness, total dissolved solids and other contaminants.  

Our industry’s products provide benefits to consumers by improving water aesthetically and reducing contaminants. But our industry also has a responsibility to protect the environment, especially when it comes to water.  

Recent years have seen numerous efforts to improve the efficiency of water softeners. New technologies are in development for hardness reduction and scale prevention. These have the potential to save water resources by using less water and reducing the amount of salt released into the environment.

Immediate improvement can be accomplished with demand-initiated regeneration (DIR) softeners installed at their maximum salt efficiency, especially when used for water without iron or other fouling attributes. Replacing time-clock softener models with DIR units can save water and reduce salt discharges.

Improving the recovery of reverse osmosis (RO) equipment is also a priority. Efficient, reliable shutoffs are typical, but efficiency ratings are often less than 25%. At 25%, 8 gal of feedwater produce 2 gal of filtered water, resulting in 6 gal of waste. Our industry needs to strive to reduce waste by increasing water efficiencies.

In addition to improving technologies to reduce water waste and discharges, we also need to evaluate how our industry can facilitate the reuse of process waters for consumption.
Richard Heckmann, founder of U.S. Filter Corp., cited his desire for a product “between the urinal and the tap” that would provide “recycled” water for consumption. Although it is an unappealing idea, it is achievable and practical, especially for greywater. Our industry has the technology to make this happen. I expect that we will see more greywater reuse applications in the near future.

Reusing rainwater is another approach to satisfying our potable water needs. Capturing rainwater is not new — cisterns have been used around the world for centuries. Rainwater fills the need when groundwater or municipally treated waters are not readily available. Once again, our industry has the technology to make it safe for use.

Conservation, capture, recovery and reuse are opportunities for our industry to provide and save potable water. Impractical or non-economical technologies may become viable as water becomes scarce. This year should see advancement by our industry to preserve a precious resource: water.

Changing for the Better

By Frank Panzeca

The 2013 water industry outlook is optimistic, providing our economy continues to grow. The housing market is picking up, meaning increased opportunities for business.
The replacement of old mechanical timer water softeners should increase, given the availability of new high-efficiency softeners. In 2013, more companies and homeowners will go green, providing additional opportunities to educate customers on POU coolers and RO systems.

The world today is filled with innovative technology we can apply to our dealerships, such as iPads and other handheld devices. It can be difficult for industry veterans to adjust to new technologies, but it is essential to stay updated with the latest and greatest technology to survive in today’s economy.  
Company growth will be heavily contingent on geographical location in 2013 — discussions with many in the industry revealed that success in 2012 was heavily dependent on this.

A dealership’s success is dictated by local water needs, which make the difference between a high-end or low-end profit.

Customers are key to any successful industry. Our industry should provide full customer satisfaction and retention through excellence in service. To achieve growth, companies should provide the best products and the best service.  

Another key aspect of our industry is educating customers on their water needs. The human body relies on water and does not function without it. It is critical to understand the healthy lifestyle acquired through everyday water consumption.

Dave Haataja is executive director for the Water Quality Assn. Haataja can be reached at dhaataja@wqa.org or 630.505.0160. Rick Andrew is general manager, Drinking Water Treatment Unit Program, for NSF Intl. Andrew can be reached at andrew@nsf.org or 734.913.5757. Frank A. Brigano, Ph.D., is vice president, technology, for KX Technologies LLC. Brigano can be reached at fbrigano@kxtech.com or 203.764.2506. Frank Panzeca is president of Culligan of Wheaton. Panzeca can be reached at fpanzeca@culliganwheaton.com or 630.668.4100.

  • haataja_wqa_industry forecast
    haataja_wqa_industry forecast
    Dave Haataja, Executive Director, Water Quality Assn.
  • andrew_nsf_industry forecast
    andrew_nsf_industry forecast
    Rick Andrew, General Manager, Drinking Water Treatment Unit Program, NSF Intl.
  • brigano_kx technologies_industry forecast
    brigano_kx technologies_industry forecast
    Frank Brigano, Ph.D., Vice President, Technology, KX Technologies LLC
  • panzeca_culligan_industry forecast
    panzeca_culligan_industry forecast
    Frank Panzeca, President, Culligan of Wheaton

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