Primo Water Corporation (Primo) operates as a North America-focused pure-play water solutions provider.
The company operates largely under a recurring revenue model in the large format water category (defined as 3 gallons or greater). This business strategy is commonly referred to as 'razor-razorblade' because the initial sale of a product creates a base of users who frequently purchase complementary consumable products. The razor in Primo's revenue model is its industry leading line-up of inno...
Primo Water Corporation (Primo) operates as a North America-focused pure-play water solutions provider.
The company operates largely under a recurring revenue model in the large format water category (defined as 3 gallons or greater). This business strategy is commonly referred to as 'razor-razorblade' because the initial sale of a product creates a base of users who frequently purchase complementary consumable products. The razor in Primo's revenue model is its industry leading line-up of innovative water dispensers, which are sold through approximately 10,900 retail locations and online. The dispensers help increase household and business penetration which drives recurring purchases of Primo's razorblade offering or water solutions.
Primo's razorblade offering is consisted of Water Direct, Water Exchange, and Water Refill. Through its Water Direct business, Primo delivers sustainable hydration solutions direct to customers, whether at home or to businesses. Through its Water Exchange business, customers visit retail locations and purchase a pre-filled bottle of water. Once consumed, empty bottles are exchanged at the company's recycling center displays, which provide a ticket that offers a discount toward the purchase of a new bottle. Water Exchange is available in approximately 17,500 retail locations. Through its Water Refill business, customers refill empty bottles at approximately 23,500 self-service refill drinking water stations. Primo also offers water filtration units across North America.
Primo's water solutions expand consumer access to purified, spring and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association in North America which ensures strict adherence to safety, quality, sanitation and regulatory standards for the benefit of consumer protection. Environmental stewardship is a part of who the company is, and the company has worked to progressively achieve carbon neutrality throughout the company's organization. The company's U.S. operations achieved carbon neutral certification in 2020 under the Carbon Neutral Protocol, an international standard administered by Climate Impact Partners. In 2021, Primo announced its planned exit from the North American small-format retail water business. This business was relatively small and used predominantly single-use plastic bottles. The exit from this category reduced single-use retail water bottles from the company's production environment by more than 400 million, annually, while also improving overall margins. The exit was completed during the second quarter of 2022.
On November 2, 2023, Primo and Osmosis Buyer Limited, a company incorporated in England and a subsidiary of the Culligan Group ('Purchaser'), entered into a Share Purchase Agreement (the 'Purchase Agreement') providing for the sale of Carbon Luxembourg S.à.r.l. and certain of its subsidiaries (the 'European Business'). On December 29, 2023, Primo completed the sale of the European Business. The European Divestiture did not include Primo's interest in Aimia Foods Limited ('Aimia'), Decantae Mineral Water Limited ('Decantae'), Fonthill Waters Ltd ('Fonthill'), John Farrer & Company Limited ('Farrers'), the portions of the Eden Springs Netherlands B.V. business located in the United Kingdom, Israel, and Portugal (collectively the 'Remaining International Businesses'). The European Business and the Remaining International Businesses are collectively the 'International Businesses.'
Operations
At the beginning of 2023, the company's business operated through two reporting segments: (i) North America, which included the company's DS Services of America, Inc. ('DSS'), Aquaterra Corporation ('Aquaterra'), Mountain Valley Spring Company ('Mountain Valley') and the businesses associated with the acquisition of Primo Water Corporation ('Legacy Primo'); and (ii) Europe, which included the European business of Eden Springs Netherlands B.V. ('Eden Europe'), and the company's Decantae and Fonthill businesses. The Other category included the Israel business of Eden ('Eden Israel'), and the company's Aimia and Farrers businesses.
North America
The company's North America reporting segment provides bottled water solutions, water filtration and coffee services to customers in North America. Products included in the company's North America reporting segment consist primarily of bottled water, water dispensers, purified bottled water, self-service refill drinking water, premium spring, sparkling and flavored essence water, filtration equipment and coffee.
Other
The Other category includes the results of the company's business in Russia prior to the exit of the business during the third quarter of 2022.
Business Strategy
The company's business strategy is aligned around a common purpose and vision and operates largely under a recurring revenue model in the large format water category (defined as 3 gallons or greater). The company's purpose defines and identifies who the company is and what sets the company apart.
The company's strategic pillars include:
Water Your Way - The company provides a diverse set of water solutions and products for residential, small and medium-sized businesses and retail customers. This allows the company's customers access to on-trend and high-quality drinking water whenever, wherever and however customers want it. The company's financial model is strengthened by the recurring-revenue nature of the company's business model. The company's offering is further enhanced through digital channels allowing customers to manage their delivery and order preferences or purchase products on owned and third-party online sites of the company's retail partners.
Category Leading Innovation - The company focuses on new product innovation to drive customer penetration and increased water consumption. The company focuses on selling-in dispensers to retail locations and online and then work to promote the sell-through of these products to customers. The company also provides dispensers for rent to Water Direct customers. The company has expanded its dispenser offering with a variety of options that include hot, cold and technology to brew coffee, tea and other beverages in numerous price ranges that are suitable for the company's retail customer needs. The company has also enhanced its lineup with color and style options that are on trend for residential and business settings. Dispenser innovation and enhancements also enable the company to improve its service efficiency and reduce service costs.
Customer for Life Promise - The company positions the customer at the center of everything the company does. The company continues to build out interactive digital touch-points to improve the customer experience.
The company's strategies also include focusing on water direct, water exchange, water refill and water filtration solutions growth; and evaluating acquisition opportunities.
Trade Secrets, Copyrights, Trademarks and Licenses
The company sells a majority of its 3G and 5G bottled water under the company's own brands while its office coffee services business sells both the company's branded products, as well as products under which the company has a distribution license. The company owns registrations for various trademarks that are important to the company's worldwide business, including Primo, Alhambra, Crystal Rock, Mountain Valley, Deep Rock, Hinckley Springs, Crystal Springs, Kentwood Springs, Mount Olympus, Pureflo, Sierra Springs, Sparkletts, and Renü in the United States and Canadian Springs, Labrador Source and Amazon Springs in Canada.
Government Regulation and Environmental Matters
The production, distribution and sale in the United States of many of the company's products are subject to the Federal Food, Drug, and Cosmetic Act, the Federal Trade Commission Act, the Lanham Act, state consumer protection laws, federal, state and local workplace health and safety laws, various federal, state and local environmental protection laws and various other federal, state and local statutes and regulations applicable to the production, transportation, import, sale, safety, advertising, labeling and ingredients of such products. Outside the United States, the production, distribution and sale of the company's many products and related operations are also subject to numerous similar and other statutes and regulations.
The company is a member of the International Bottled Water Association ('IBWA') and the Water Quality Association. All of the company's production facilities and other operations are subject to various environmental protection statutes and regulations, including those of the U.S. Environmental Protection Agency ('EPA'), which pertain to the use of water resources and the discharge of waste water.
History
The company was incorporated in 1955. It was formerly known as Cott Corporation and changed its name to Primo Water Corporation in 2020.
