The Mom-and-Pop Water Shop

Power Player / by Maywa Montenegro /

Microbiologist Ranjiv Khush and hydrologist Jeff Alberts are bringing an entrepreneurial approach to an age-old dilemma: how to bring clean, safe water to the developing world.

The UN says that each person needs between 20 and 50 liters of safe freshwater per day for drinking, cooking, and cleaning. Yet more than one in six people worldwide don’t have access to this amount—and some 2.5 billion live without access to even basic sanitation facilities. Combined, these have a shocking impact: Globally, diarrhea is the leading cause of illness and death. But the failure of international intervention has left the door open for grassroots solutions: In both Indonesia and the Philippines, a small entrepreneurial approach to safe water provision has achieved massive scale in an extremely short time span. The “water refill” industry, which utilizes low-cost technology to purify water on site in locally run businesses, has received little attention in the West, but it represents possibly the most effective means for water delivery in the developing world.

Molecular biologist Ranjiv Khush and hydrologist Jeff Albert are now hoping to replicate the Asian model in other parts of the world, beginning in East Africa. The two scientists met at an orientation for AAAS Science & Technology Policy Fellows and quickly realized that they shared an interest in international development, social entrepreneurship, and public health. In 2005, they co-founded The Aquaya Institute, a non- profit that merges science and market principles in pursuit of clean, cheap water for everyone. Seed editor Maywa Montenegro recently spoke with Albert and Khush about reverse osmosis, mom-and-pop water shops, and the crucial difference between needing a resource and wanting it.

Seed: I understand that the 2004 Indian Ocean tsunami was instrumental in the founding of Aquaya. How does a natural disaster jumpstart a business?
Jeff Albert: In 2004, Ranjiv and I had begun kicking around ideas for starting Aquaya; we’d been in touch with Procter & Gamble, which had developed a low-cost water treatment product called the “PUR Purifier.” It’s a powdered mixture of iron sulfate and bleach, designed to retail in developing countries for about the price of an egg. It renders even the most foul, muddy water source potable—crystal clear and free of disease-causing pathogens.

Around the time of those discussions, the tsunami hit, and P&G arranged for me to fly to Aceh, to the aid camps. There, working with the Centers for Disease Control and the humanitarian aid group CARE, I looked at the role of household chlorination, both with PUR and with straight dilute bleach. Out of that trip we got an initial grant from P&G to investigate the potential of the PUR product in Indonesia. Aquaya got its start there.

What makes Aquaya distinct from other clean water projects?
Ranjiv Khush: Many small groups that address water issues in the public health or social sectors have a particular strategy or implementation program that they’re formed around. At Aquaya we began with an objective to determine if private markets could sustainably sell the PUR product. We quickly realized, however, that our real skills were in research. So we decided that in the first few years we’d focus on learning as much as we could about diarrheal disease from tainted water and different strategies for addressing it.

Without a lot of credibility in the sector, it was important to get credible partners. We started working with Johns Hopkins and UC Berkeley, and since then we’ve branched out to universities in the UK, in South Africa, and in India. That was basically the first five years of Aquaya—a five-year plan to really study the sector. Now we’re starting to transition to implementation.

As scientists, we felt like our added value was to be able to understand the evidence-based evaluations of what’s working. We’ve come across some models that we’re pretty excited about and now we understand the evidence sufficiently to push some interventions.

Seed: What kinds of interventions look promising?
RK: Looking at grassroots-type approaches for safe water delivery, one issue really struck us: Most groups confuse need with demand and constantly respond to high levels of diarrheal disease by assuming that these people want new technologies, new insights, new behavioral change models. But there is a big disconnect between the way we perceive the costs of dirty water and the way that poor people in developing countries perceive those costs. It’s not that they don’t understand the links between dirty water and disease—they do. But they often don’t associate the same costs with dirty water that we do. So pushing new products on them, when there’s not a high demand, is challenging.

Seed: If they do understand the dangers, then why wouldn’t there be a high demand?
It’s perceived dangers. In the US, we have a lot of trouble getting doctors to wash their hands. We all know that there is a lot of risk if you don’t wash your hands, particularly if you’re a physician. But for some reason, doctors don’t perceive it as very high. We know there is potential danger around unprotected sex, but promoting safe sex is quite difficult because for some reason target populations may not perceive the risk to themselves as very high. So many public health issues—smoking, overeating—are matters of risk perception.

JA:  And when a perceived risk has to translate into consumer purchase among very, very poor people, their motivation has to be extremely high if they are going to spend money.

One exception that has us really excited is the small-scale water treatment and vending industry that we’ve come across in parts of Southeast Asia—most notably in Indonesia and the Philippines. They’re also known as “water refill” stations: small, non-branded water bottling facilities that operate at a neighborhood scale and sell between 1,000 and 10,000 liters of water a day. This is an industry that has exploded: It didn’t exist a 15 years ago, and now it’s difficult to walk through a slum in Jakarta or Manila without seeing these enterprises. They’ve managed to both cultivate and respond to consumer demand for high-quality drinking water.

So, it has basically given us something we want to emulate. We have been studying the field for a while and this model stands out in terms of the evidence for its scale. It has led us to shift from focusing on research to focusing on intervention.

Seed: How does this water refill industry work? If I were, say, the head of a household in Manila and wanted some water for cooking, what would I do?
JA: You would order a five-gallon jug—like an office water cooler—from a water store that might be down the street from your house. You would pick it up yourself, send one of your children to fetch it, or the store would deliver it directly to your house on the back of a pickup truck or a scooter. And you would buy several of these a week. It’s basically unbranded bottled water, but rather than buying it from the Coca Cola or Nestle bottler, you’re buying it from an independent bottler in your neighborhood.

Seed: You are currently launching six water refill pilot projects in East Africa. Are you confident that the Asian model will be geographically transferable?
JA: We see some evidence that it is already happening there with businesses targeting elite customers. We don’t see much evidence that they are reaching the poor, but we think water refill businesses didn’t initially target the poor in Asia, either. That’s an important point: When you’re interested in scale and sustainability, reaching the poor from the get-go can be difficult.

RK: We’ve learned that a lot of businesses that begin by selling to the poor directly are such low-margin businesses—because the prices are so low—that there’s little chance that they will survive. The water refill industry in Southeast Asia, which now serves the poor, actually began from the top; it survived by charging premium rates to the rich. As competition increased, prices dropped, equipment became cheaper, the whole sector expanded, and now it’s serving the poor.

JA: We’ve also come to believe that demand for goods and services among the poor is frequently driven by their aspiration to no longer be poor. There is high demand for products that are perceived to be associated with success. And so we have this sense that the aspirational character of refill water—it’s the water that wealthy and successful people are using—is what will drive demand for it. That’s something really attractive to us: We’re talking now about consumer demand and not our conception of need.

Seed: Who owns these water-refill stations?
JA: It depends on the market. In Indonesia, the industry is dominated by individual owner-operators. There aren’t any big industry players.

RK: In the Philippines, franchising is more popular, but the franchisees are all independent entrepreneurs. We don’t find any evidence of one single group with big chains of these things.

JA: In fact, in both Indonesia and India, these small refill businesses have sparked a backlash from the dominant bottled water companies—the Pepsis, the Nestles, and others. These large established players are quite critical of the mom-and-pop operations, accusing them of having very uneven quality control. But we’ve done our own independent testing of water from the small businesses in Indonesia, and we’ve found it to be of quite high quality—quality that surprised us, actually. These are state-of-the-art systems with a lot of redundancy built into them.

Seed: Is there one water purification technology that stands out?
JA: The “best” depends on where you are working. Generally, these systems employ particle filtration, followed by an activated carbon step to absorb chlorine and various organic compounds, and then a disinfection stage, which is usually UV irradiation or UV plus ozone dosing. If you’re working in an area where high solute concentrations are a problem, there’s a reverse osmosis step that is introduced—this type dominates the Filipino industry. There are also other forms of membrane filtration, like hollow fiber ultrafiltration, now being embraced; these technologies operate at lower pressures yet remain quite effective.

Seed: How exactly does the reverse osmosis type work?
JA: It’s a form of filtration in which you are forcing water across a semi-permeable membrane against an osmotic gradient, so you remove individual salt molecules and other dissolved trace contaminants, like metals. One of the downsides, though, is that only 50 or 60 percent of the water that goes through the system is recovered as product water. That is a relative advantage of the ultraviolet treatment as compared to reverse osmosis: You have a much higher recoveries. On the other hand, with UV you don’t remove things like salt and other trace contaminants.

Seed: Are these fairly affordable technologies?
Very much so. They’re not perceived to be technologies aimed at poor consumers—the conventional wisdom is that if you’re going to serve the poor, your device has to be made out of clay or local materials. Also, if you’re going to be operating a business in which you’re selling a few thousand gallons of water a day over several years, the equipment costs are actually a very small component of long-term business overhead. We’re talking about a few thousand dollars per system.

Seed: Spoken like a true businessman, which brings me to my final question: Now that you are working mostly in the entrepreneurial sector, do you feel that your background in science still informs how you approach problems?
JA: As scientists, we like to focus on evidence, and what’s appealing about the water refill model is that the success measure is clear. But in a way science is a business, too. I was talking with a colleague of ours not too long ago—a membrane scientist down at UCLA. He said his work today is entirely management: He’s managing students and staff and bringing in the money by writing grants. He’s become a businessman.

Originally published December 8, 2009

Tags entrepreneur innovation water

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