Make us your home page

In lead crises, a maker of water-filtration pitchers sees opportunity clearly

Douglas Kellam is CEO of Zero Technologies, a Philadelphia-area company that produces flow-through pitchers whose ion-exchange filters will, it says, render water more than 99.6 percent free of dissolved solids, including lead.

Philadelphia Inquirer

Douglas Kellam is CEO of Zero Technologies, a Philadelphia-area company that produces flow-through pitchers whose ion-exchange filters will, it says, render water more than 99.6 percent free of dissolved solids, including lead.

PHILADELPHIA — Drip by drip, disclosures about unsafe levels of lead in drinking water have been made in U.S. cities and towns, prompting alarm and outrage.

At one Philadelphia-area company, those findings have been met with a respectful sense of opportunity.

In every headline about lead contamination in Flint, Mich., Newark, N.J., Sebring, Ohio, and the like, and every condemnation of its dangers by health officials and presidential candidates, Zero Technologies LLC sees growth potential — and more distance from its own near-death experience.

The 10-year-old company produces flow-through pitchers whose patented five-stage ion-exchange filters will, it says, render a glass of water more than 99.6 percent free of total dissolved solids, including lead. ZeroWater, as the product's name suggests.

The lead claim is certified by NSF International, which develops public health standards and testing programs.

An "I Donated for Flint" pin worn by Zero Technologies CEO Douglas Kellam during a recent interview refers to an ongoing campaign that has resulted in $200,000 in private and company-match donations to fund distribution of ZeroWater pitchers and replacement filters in Michigan. The 23-cup pitcher sells for $40 on, and the two-pack of replacement filters sell for $30.

Kellam makes no apologies for an effort that, while aiding those in crisis, also helps ZeroWater boost brand awareness.

"If you do something good, hopefully it reflects good on you," he said.

Momentum at the privately owned company has been positive in recent years, Kellam said, with $30 million in annual revenue and 39 percent sales growth in 2015, up from 26 percent in 2014.

It wasn't that way when the startup and turnaround expert left vacuum company Dyson to join Zero Technologies in June 2008. "We were pretty close to running out of money," he said.

Zero Technologies' main product then was a filtration system for office and home water coolers sold at Home Depot, among other places. That national distribution presence alone required an army of salespeople, Kellam said.

With manufacturing and shipping done in-house, the company — founded by inventors Rajan Rajan and a son, Mathu, who are no longer involved with it — Zero Technologies had 180 employees in the Philadelphia area and insufficient sales to support such infrastructure.

Retail opportunities for its pitchers were few. Industry leader Brita, whose U.S. distribution rights are owned by Clorox Co., dominated shelf space and sales where ZeroWater wanted to compete: Target, Wal-Mart and Bed Bath & Beyond stores.

"It was kind of ugly," Kellam, 57, said of his early days at Zero Technologies. "A lot of angry investors."

Understandably so. Seven months before he arrived, investors put up $25 million to help fund a national rollout of products. Of that, $14 million came from NutriSystem Inc.

The company "was going to go out of business if we didn't change it," said Kellam, who recalled similar circumstances at Dyson. "It's a category that has never had any serious performance improvements for decades. ZeroWater had a performance aspect that was demonstrable and valuable to the consumer."

So Kellam shifted focus from water coolers to pitchers, going head-to-head with Brita, which has about 60 percent of the market, according to a 2015 industry analysis by Freedonia Group Inc. Zero Technologies' share is about 10 percent, he said.

Freedonia estimates demand for flow-through water-treatment systems will grow 4.3 percent annually, to 4.8 million units and a value of $81 million in 2019, up from $51 million in 2004.

Needing to devote time to cleaning up its own balance sheet, Nutrisystem divested from Zero Technologies in 2009, Kellam said. To help support a launch of ZeroWater pitchers and two-packs of replacement filters that summer, he appealed for "a few million dollars" from a subgroup of the original investors who continue to support the company, he said.

They include Thomas Mendell, a New York venture capitalist and former partner at Goldman Sachs, where he ran the investment arm, GS Capital. In the water-filtration market, he sees pipe fulls — literally — of opportunity on the lead front alone.

"We haven't touched the surface on that," Mendell said, maintaining that "80 percent of the housing stock have lead solder in their pipes. That doesn't include the pipes coming in from the street."

Then there's chromium, he said. NSF has certified that ZeroWater's filters reduce its presence in water by up to 99.6 percent.

In overall sales, "we don't have any illusions about surpassing Brita. They're well ahead of us at this point," Mendell said. "But there is a niche for a quality we do fill."

In lead crises, a maker of water-filtration pitchers sees opportunity clearly 04/08/16 [Last modified: Friday, April 8, 2016 5:53pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.

Join the discussion: Click to view comments, add yours

  1. Pinellas licensing board asks Sen. Jack Latvala for $500,000 loan

    Local Government

    The troubled Pinellas County agency that regulates contractors wants Sen. Jack Latvala to help it get a $500,000 lifeline from the state to stay afloat.

    State Sen . Jack Latvala, R- Clearwater, is being asked to help the Pinellas County Construction Licensing Board get $500,000 from the state so it can stay open beyond February.  [SCOTT KEELER   |   Times]
  2. In advertising, marketing diversity needs a boost in Tampa Bay, nationally


    TAMPA — Trimeka Benjamin was focused on a career in broadcast journalism when she entered Bethune-Cookman University.

    From left, Swim Digital marketing owner Trimeka Benjamin discusses the broad lack of diversity in advertising and marketing with 22 Squared copywriter Luke Sokolewicz, University of Tampa advertising/PR professor Jennifer Whelihan, Rumbo creative director George Zwierko and Nancy Vaughn of the White Book Agency. The group recently met at The Bunker in Ybor City.
  3. Tampa Club president seeks assessment fee from members


    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  4. Under Republican health care bill, Florida must make up $7.5 billion


    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  5. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]