The American bottled water market has grown drastically over the past decade. With the rise in population has come an increase in market size and an accompanying increase in demand. Water, especially bottled water, has presented the market with a safe option. As a result, according to the Beverage Marketing Corporation, the market for bottled water has risen to $16.5 billion – about 13.7 billion gallons - representing a corresponding 7% and 8.8% year on year growth respectively.With the above in mind, the fundamentals backing the business case for Alkaline Water Company Inc (OTCMKTS:WTER) seem very strong.Over the past month, the company has been on a success path, completing deals which they have structured as well as hitting new highs in their revenue generation. Their vision to venture into the online space has also played a major role in ensuring that their share price soars to its current level; $4.1, a price which just a month ago stood at $1.7. This 141% rise in prices speaks to a strong value proposition to the market. Readers can view the company’s price trend in the chart below: WTER Daily ChartThis aggressive run in their price position – shown in the chart below – has been primarily driven by the above factors, with more factors being also in play. With WTER having such a strong business case and positive price run, we have decided to review their decision making and evaluate how it will impact them going forward. The following report was thus obtained.
History of WTER
Before getting into the analysis, let us first have a look at the backdrop the company that is.Alkaline Water Company Inc was founded back in 2011 and headquartered in Scottsdale, Arizona. the company focuses on the production and distribution of alkaline water, specializing in Alkaline88®, their pH 8.8 premier bottled alkaline water.In our last piece on the company – which can be accessed here – the company, back in 2013, ventured into the market with a lot of hype, marketing their proprietary electrolysis process which would see them produce healthier water and sell it to the market at large. Despite the hype, the marketing campaign did not pay off as the share prices tanked from over $10 to just over $1 at which point they stabilized.It has taken them over half a decade to come out of this position and they seem to be enjoying every minute of it. However, their management has been pivotal to the above price position as explained in the following sections.
Current Position
As with any company, there have been targets which WTER has been trying to hit. Key among them has been trying to ensure their presence is felt throughout the United States. In doing so, they have continued to grow their presence into different market segments, to be achieved initially through their entry into all Super 50 stores and now through E-Commerce.All the above have now been achieved with more to come in the near future.
The Super 50 Target
In a recent publication by Progressive Grocer, it was established that WTER’s Alkaline88® product was now available in 39 of the 50 Super 50 stores – the Super 50 represent the top 50 grocers in the US.The management at Alkaline Water Company credits this to strong marketing as well as strong relationships which have been fostered over time. Previously, the management had decided to focus on this segment so as to ensure they penetrated their market, a move which now seems to have worked quite well for the company. As a result, Alkaline88® is now in the 8th position of the top 10 volume chains which have been sold in the US.Such an impressive ranking has boosted their position significantly and allowed WTER to score its place in the American fast-moving consumer goods space.
The New Agreement
As a result of their Alkaline88® trademark, WTER, through its wholly-owned subsidiary A88 Infused Beverage Division, Inc entered into a co-packing agreement with American Nutritional Products Inc.The agreement will see ANP bring to the table its expertise in Cannabidiol and its related products to develop new products which the A88 division with have rights to develop and market in the process. The deal follows the entry of soft drink companies such as Coca-Cola and Constellation Brands to venture into the cannabis space through significant investments.The company’s CEO remained jubilant of the above success citing:
“We think that A88 Infused will be able to bring several sophisticated and functional new products to market by December, 2018.”
New E-Commerce Strategy
The above news was followed shortly by news that the firm had decided to venture into E-Commerce.According to management, WTER is now both on Amazon and Walmart where their product can now be reached by customers worldwide. This follows a new 2018 strategy which the firm has chosen to follow which will see them scale their operations and grow at an exponential rate.Months back, WTER had announced that the end of their second quarter had seen their sales grow to $6 million over two months – a 100% increase in their sales over those two months – which was a major accomplishment for them. As such, with their shift to online sales (away from the brick and mortar system) opens them up to a much larger market – about $450 billion.This will see the firm soon be at the pinnacle of the bottled water market.
Conclusion
With WTER currently venturing into the online retail market, there is a lot to be envied about them. The firm’s sales are on an all-time high and growing fast. It will not be long before their profits follow suit. Therefore, investors would be prudent to join this bandwagon – which is backed by strong fundamentals – prior to its price skyrocketing as has already happened.We will be updating our subscribers as soon as we know more. For the latest updates on WTER, sign up below!Disclosure: We have no position in WTER and have not been compensated for this article.
Discover Hidden Gems
Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.
