How to Start a Bottled Water Business: A Step by Step Guide

Here are the most important things to consider when starting a bottled water business:

1. Source of water — Find a location close to a clean and sustainable water source. Consider natural water sources such as springs and aquifers.
2. Grants — There are a few grants available that can help you start your bottled water business such as Drinking Water Grants and Environmental Grants.
3. Licenses — As bottled water is a consumable product, you will need many licenses, such as approval from the health department, FDA approval, environmental permits, water rights, and state-specific permits. 
4. Equipment — Invest in high-quality equipment like pumps, pipes, and storage tanks for the water. To treat the water further, add filtration, reverse osmosis units, and UV systems. Your facilities also need bottling, packaging, and shipping equipment.
5. Niche — Find a niche and stand out. Think about eco-friendly bottles, flavored and enhanced water, fitness-focused products, kids’ water, etc.
6. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
7. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.

Step 1: Decide if the Business Is Right for You

Pros and Cons

Starting a bottled water business has pros and cons to consider before deciding if it’s right for you.

Bottled Water Industry Trends

Industry Size and Growth

• Industry size and past growth — The global bottled water industry was worth $303 billion in 2022 and it’s been steadily growing.((https://www.grandviewresearch.com/industry-analysis/bottled-water-market)) The US market share is worth $9.3 billion.((https://www.ibisworld.com/united-states/market-research-reports/bottled-water-production-industry/))
• Growth forecast — The global bottled water industry is projected to grow at a CAGR of 5.4% annually by 2032 to reach more than half a trillion dollars.((https://www.statista.com/outlook/cmo/non-alcoholic-drinks/bottled-water/worldwide))
• Number of businesses — There are 476 bottled water production businesses in the US.((https://www.ibisworld.com/united-states/market-research-reports/bottled-water-production-industry/)) 
• Number of people employed — The US bottled water production industry employs 15,708 people.((https://www.ibisworld.com/united-states/market-research-reports/bottled-water-production-industry/)) 

Trends and Challenges

Trends

• Alkaline waters, which have a higher pH level than regular bottled water, are increasingly popular because they are thought to improve energy. The same is true for electrolyte-enhanced water.
• New to the market is hydrogen water, made with more hydrogen and thought to increase energy and endurance as well as to provide antioxidants. Though it’s new, it’s increasing in popularity quickly despite its higher price. 

Challenges

• Plastic water bottles are piling up in landfills, leading to environmental concerns and increased governmental regulation. This has spurred manufacturers to look for alternative bottling. Many manufacturers are using recycled plastic, but some are moving to cans and paper cartons as better alternatives.
• Plastic bottle production in the United States requires about 17.6 million barrels of oil annually, which is of increasing concern due to the current energy situation.

Consumer Spending

• Average consumer spend — The average person in the US consumes about 46.5 gallons of bottled water per year.((https://www.statista.com/statistics/183377/per-capita-consumption-of-bottled-water-in-the-us-since-1999/)) 
• Potential customer base — A recent survey shows that 49 million Americans consume bottled water.((https://tappwater.co/blogs/blog/how-many-people-consume-bottled-water-globally))
• Average prices — Consumers tend to buy bottled water in bulk. The average price for a 24-bottle case is $6.99, while specialty waters sell for up to $15 or more. They are commanding a higher price due to the way they are presenting their water to consumers, creating the impression of more health benefits.((https://bottledwater.org/bottled-water-prices-advertising/))

How Much Does It Cost to Start a Bottled Water Business?

Startup costs for a bottled water business range from $6,500 to $15,000. Your costs will depend on the minimum your manufacturer will allow you to order since the bulk of your startup costs are for your initial inventory. 

You could start your search for a manufacturer on this online platform.  

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150–$200	$175
Business licenses and permits	$100–$300	$200
Insurance	$100–$300	$200
Business cards and brochures	$200–$300	$250
Website setup	$1,000–$3,000	$2,000
Initial inventory from manufacturer	$4,000–$8,000	$6,000
Initial marketing budget, plus label design	$1,000–$3,000	$2,000
Total	$6,550–$15,100	$10,825

How Much Can You Earn From a Bottled Water Business?

The average price for a private-label specialty case of bottled water is about $10. You can either sell your water online on a site like Amazon, or you can try to find local stores that will stock your water. Your profit margin after manufacturing and packaging costs will be around 35%. 

In your first year or two, you might sell 250 cases a week, bringing in $130,000 in annual revenue. This would mean nearly $46,000 in profit, assuming that 35% margin. As your brand gains recognition and you get your products into grocery stores, sales could climb to 800 cases per week. At this stage, you’d rent out a distribution center and hire staff, reducing your margin to about 20%. With an annual revenue of $416,000, you’d still have a nice profit of more than $83,000.

What Barriers to Entry Are There?

There are a few barriers to entry for a bottled water business. Your biggest challenges will be:

• Finding a manufacturing partner
• Competition from established firms

Step 2: Hone Your Idea

Now that you know what’s involved in starting a bottled water business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an Opportunity

Research bottled water businesses in your area to examine their products, price points, and what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a spring water or sachet water company. Sachet water is pre-filtered water heat-sealed in plastic bags instead of bottles.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Choose Your Product Line and Define the Product Range

Bottled water companies are legally allowed to offer:

• Mineral water from an underground source with naturally occurring trace minerals
• Spring water
• Well water, artesian well water 
• Purified water, or treated tap water 

You can choose any of those. Your key will be your labeling and how you brand your product. You could decide to offer vitamin or flavored water, but that would move you out of the bottled water category and into the soft drink category and would make production much more difficult. 

How Much Should You Charge for Bottled Water?

If you present your water as a high-end specialty water, you can charge about $10 per case. The key to this is in packaging and branding that creates the impression of a superior product. Using phrases like “natural spring water” and giving your bottles a confident, appealing design goes a long way. If you go to Amazon and search for bottled water, you’ll see many ways in which water is presented as high-end and commands prices as high as $15 or even $20. 

You should aim for a profit margin of about 35% after manufacturing and packaging costs.

Once you know your costs, you can use our profit margin calculator to determine your markup and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify Your Target Market

Your target market will be broad, but it may tend to be a younger crowd. You can find them on sites like TikTok and Instagram, but you could also advertise on Facebook, LinkedIn, and beyond.  

Where? Choose a Location

When selecting a location for a bottled water company, the approach varies depending on whether you have a partner manufacturer or not:

1. With a partner manufacturer:
   • Water source — Prioritize a location near a high-quality, sustainable water source like a spring or well.
   • Regulatory compliance — Ensure compliance with water extraction and bottling regulations.
   • Market proximity — Choose a location close to your target market to reduce transportation costs.
   • Infrastructure and accessibility — Look for adequate infrastructure for bottling and packaging, and good transportation links.
2. Without a partner manufacturer:
   • Water source — The same priority for a sustainable, high-quality water source applies.
   • Manufacturing facilities — You’ll need space for your own bottling and packaging facilities.
   • Labor availability — Ensure access to a skilled workforce for various operational roles.
   • Environmental and community impact — Assess and minimize environmental impact and build positive community relations.

In both scenarios, consider the local climate, the potential for natural disasters, and the legal and political environment. Future expansion possibilities and overall costs are also important factors.

Step 3: Brainstorm a Bottled Water Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “mineral water” or “spring water,” boosts SEO
• Name should allow for expansion, for example, “AquaSource Bottling” over “AquaSource Sparkling Water” or “Coconut Bay Water”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. However, once you pick your company name and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Bottled Water Business Plan

Here are the key components of a business plan:

• Executive summary — A concise overview of your bottled water business, highlighting key points and objectives.
• Business overview — Detailed information about the bottled water industry, your company’s mission, and its structure
• Product and services — Explanation of the types of bottled water you offer, including any unique features or benefits
• Market analysis — Examination of the target market for bottled water, considering demographics, trends, and potential growth
• Competitive analysis — Assessment of other bottled water companies in the market, identifying strengths, weaknesses, opportunities, and threats
• Sales and marketing — Strategies for promoting and selling your bottled water, including distribution channels and advertising plans
• Management team — Introduction of key individuals involved in running the business, emphasizing their qualifications and roles
• Operations plan — Details on how your bottled water business will operate, covering production, quality control, and distribution
• Financial plan — Projections of your business’s financial performance, including income statements, balance sheets, and cash flow forecasts
• Appendix — Supplementary materials such as supporting documents, charts, and additional information to enhance the business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose Where to Register Your Company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to bottled water businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind that it’s relatively easy to transfer your business to another state. 

Choose Your Business Structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your bottled water business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole proprietorship — The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General partnership — Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) — Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corporation — Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corporation — This refers to the tax classification of the business but is not a business entity. An S Corp can be either a corporation or an LLC, which just needs to elect this structure for tax status. In an S Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number or EIN. You can file for your EIN online, or by mail/fax. Visit the IRS website to learn more. Keep in mind that, if you’ve chosen to be a sole proprietorship, you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund Your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans — This is the most common method but getting approved requires a rock-solid business plan and a strong credit history.
• SBA-guaranteed loans — The Small Business Administration can act as a guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants — A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and family — Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding — Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal — Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a bottled water business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Bottled Water Business Licenses and Permits

Starting a bottled water business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your bottled water business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability — The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business property — Provides coverage for your equipment and supplies.
• Equipment breakdown insurance — Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation — Provides compensation to employees injured on the job.
• Property — Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto — Protection for your company-owned vehicle.
• Professional liability — Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP) — This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential Software and Tools

Being an entrepreneur often means wearing many hats — from marketing to sales to accounting — which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as LS Retail, Vend, or Retail Pro, to manage purchasing, inventory, and invoicing.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, FreshBooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences of filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop Your Website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech savvy, you can hire a web designer or developer to create a custom website for your business.

However, people are unlikely to find your website unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Website & SEO — Optimize your website and online listings to increase visibility in search results, focusing on bottled water and hydration solutions.
• Engaging social media campaigns — Highlight the purity and source of your water on platforms like Instagram and Twitter to engage a health-conscious audience.
• Interactive website features — Develop an engaging website that educates visitors on the health benefits and sustainability efforts of your brand.
• Health and wellness blogging — Share content on the importance of hydration, water purity, and eco-friendly practices.
• Customer testimonials — Utilize positive feedback to build trust and encourage trial of your water.
• Hydration stations at events — Set up branded stations at local sports and wellness events to promote your product.
• Partnerships with fitness centers — Collaborate with gyms and yoga studios to supply your bottled water, reinforcing a healthy lifestyle image.
• Rewards program — Implement a program that rewards repeat purchases with discounts or other incentives.
• Targeted advertising campaigns — Reach health-conscious consumers and sustainability advocates through targeted digital ads.
• Influencer marketing — Work with health and wellness influencers to amplify the benefits of your water.
• Striking branding and packaging — Design distinctive labels and packaging that reflect the quality and values of your brand.
• Email marketing — Maintain engagement with your customer base through newsletters that provide hydration tips, company updates, and special promotions.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Today, customers are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your bottled water business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your bottled water business could be: 

• Refreshing natural spring water to live your healthiest life 
• Fortifying mineral water so you’re always at your best 
• Hydrogen water to give you an energy boost

Networking

You may not like to network or use personal connections for business gain but your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a bottled water business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in bottled water for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in bottled water. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a bottled water business include:

• Distribution center workers — preparing bottled water for shipping
• General manager — ordering, accounting
• Marketing lead — SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Bottled Water Business — Start Making Money!

Ready to get in on the action? The bottled water industry is set to double, which means now is the perfect time to create your own bottled water brand. You can start for a relatively low investment if you can find a white-label manufacturer and make a nice return on that investment. You just have to come up with an identity for your water and design your packaging well, and you can bring in some good money.

Now that you understand the business, it’s time to hit the ground running and launch your bottled water business!

FAQs

Can a bottled water business be profitable?

Yes, bottled water has good profit margins. Your key will be to brand your water in a way that is appealing to consumers. You also need to find a reliable manufacturer.

How can I start a bottled water business without opening my own plant?

You can find a water company that will produce your water and packaging and put your own brand and label on it.

Who buys the most bottled water?

The United States is the country that buys the most bottled water in the world.

How can I increase the sales of my bottled water?

To increase the sales of your bottled water, focus on marketing and branding by highlighting the quality and unique features of your product. Target your advertising efforts to reach your desired market through various channels. Consider product placements and partnerships to increase visibility and availability. 

What distribution channels should I consider for selling my bottled water?

To distribute your bottled water effectively, consider selling through retail stores, online platforms, beverage distributors, direct sales at events and via subscriptions, and B2B partnerships with establishments like restaurants and gyms. This strategy broadens your market reach and simplifies logistics.