As bottled water brands search continue to ask questions about the long-term environmental sustainability of the category, Richard’s Rainwater believes the answer will come from above.
Since 2002, the Dripping Springs, Texas-based brand has been bottling and distributing purified rainwater in both still and sparkling varieties, the first company in the U.S. to receive approval to do so. In the race to grab a piece of the ever-expanding premium water segment, this may seem like yet another gimmick, but, in the hands of a new leadership team since 2017, the company is doubling down on its belief that its unique sustainability message can help forge new paths forward in retail.
As a business, Richard’s Rainwater wasn’t born out of an ambition to reshape the bottled water industry. Having designed and installed a home rainwater collection system in 1994, founder Richard Heinichen initially focused on supplying neighbors and local residents with their own units. It took another eight years before he received approval from regulators to bottle and distribute rainwater in 2002, becoming the first person in the country to do so, and eight more years after that before Heinichen found a method of carbonating the product.
Yet the company’s biggest breakthrough may have come in 2017 when Austin-based businessman Steve Kuhn, a former hedge fund manager at Minnesota-based Pine River Capital, acquired the brand along with CEO Taylor O’Neil. Over the last two years, the pair have been seeking to play catch up in the $3 billion-plus sparkling water category: in addition to its existing 20,000 sq. ft. rooftop collection station, the company has opened a second unit at Mississippi-based craft brewery Lazy Magnolia, and is in talks with breweries in Austin, Atlanta, Houston and other locations about replicating that project.
Through its proprietary processing system, rainwater is captured before it hits the ground and is then ultraviolet (UV) filtered and purified through reverse osmosis. The company is also exploring a broader technology play, having developed a prototype consumer product that “we think we can install on stadiums, grocery stores, condo buildings and all other types of buildings,” O’Neil said.
Similar to some other premium water brands, the story of how the liquid got in the bottle is as powerful a selling point as the bottle itself. With its sustainable sourcing, O’Neil believes the company has found a unique and powerful message that adds a different perspective to the conversation around sustainability, which thus far has primarily centered around product packaging.
“Principally, all other bottled waters are depleting a source of water that somebody else could access,” he said. “I believe our product will be the only one to create more water than any other source. In our mind, all water starts with rainwater.”
Through that lens, the true potential of the company’s technology comes into clearer view. The ultimate vision is to develop an interstate network of rainwater collection stations — each capable of producing 550 gallons of clean water for every inch of rain precipitation on a 1,000 square foot area of surface collection — that can supply regional markets, thus reducing shipping costs and net carbon footprint.
Until that network of collection stations is complete, Richard’s will continue to source from its two existing units in Dripping Springs and Mississippi. Like farmers, Richard’s must plan its business around seasonal weather patterns and carefully manage its inventory to avoid shortages. Those details will be critical as the brand continues to expand in retail channels; Richard’s is projected to be in over 1,000 locations by the end of this summer, following recent placements at The Fresh Market and Whole Foods locations stretching across the South, Midwest and Mid-Atlantic regions.
Richard’s innovation pipeline is about formats, rather than flavors or function. The company currently offers its still waters in 500 ml ($1.29) and 1 liter PET single-serve bottles ($1.99), and its sparkling water in 12 oz. glass bottles ($1.39). By the first quarter of 2020, it will add 1 liter glass bottles for both still and sparkling.
“Right now we are big fans of cloud to bottle simplicity — we want to be what’s not in our water,” O’Neil said. “We understand and we like the idea that people are consuming sparkling water instead of a sugary beverages, but for us we really want to focus on the importance of more clean water.”