Innovations in Global Health: The Business Case for Safe Drinking Water

Alyssa GovindanNews, Newsletter

The role of business in addressing the problem

Lack of access to clean drinking water is a huge, global problem. The UN reports that more than 500,000 people die every year from contaminated drinking water. Addressing caloric and micronutrient deficiency diseases also requires reducing or eliminating severe diarrhea caused by waterborne pathogens. 663 million people lack access to an improved water supply: they are largely rural and destitute; this is therefore a humanitarian problem. However, safe germ-free water is a much larger problem: 2.1 billion people drink fecally contaminated water. This is not only the rural ultra-poor, but the low-income, working poor throughout developing countries, including megacities around the world. This has important implications when thinking about the role of business in addressing public health issues associated with drinking water. The base of the pyramid (BOP) is a large consumer market, three billion people who earn US$2-10/day and collectively spend US$5 trillion annually. BOP consumers buy staples like food, detergents, and telecom, and are reached by some form of formal or informal retail channel. Thus, while the government and NGO sectors are needed to support and address humanitarian problems and the ultra-poor, a far larger part of the problem can be addressed by business in a commercial market.

Folia’s solution: a simple paper water filter that costs pennies and not dollars

Folia Water has invented a process that utilizes standard paper mills as the world’s largest nanofactories to manufacture a simple, affordable antimicrobial paper water filter. The silver in our paper kills bacteria and viruses, while the pores physically screen out dirt and larger protozoa. Folia Filters are packaged in a sachet like a simple cartridge filter. They are the world’s first water filters that cost pennies and not dollars. Each filter can provide 20 liters of safe, germ-free water at an MSRP of 20¢ per paper, 1¢/liter.

The barrier for universal access to safe drinking water is not a lack of technology, but rather a lack of a successful distribution model capable of achieving behavior change at an accessible price. Many of the current safe water products are too expensive for BOP consumers who cannot easily afford to pay high upfront costs (US$15+) for durable, good appliance water filters or for branded packaged/bottled water. At 20¢, the Folia Filter is a fast moving consumer goods (FMCG) product that can be sold through food/beverage mom and pop kiosks. They are less than a day’s wage for BOP consumers earning US$2-10/day. They have the pricing and margins of food or snacks, and on average represent a 75-90% savings to 20-liter water bottles. Folia’s filter housing fits into the neck of a 20L bottle and will be free or nearly-free to achieve pricing/barrier-to-entry equivalent to a typical food or beverage product, a razor-razorblade business model.

Folia’s patented manufacturing process utilizes standard paper machines, enabling us to achieve both the manufacturing scale and low unit costs of paper production. The resulting unit financials and margins are similar to any other FMCG sachet. We are currently in discussions with several international consumer companies with existing consumer marketing, distribution and sales systems. Next steps are consumer sales pilots to prove consumer-product-channel fit with an established retail recipe, before a market launch to scale our solution.

Folia is utilizing the world’s largest industry, fast moving consumer goods food/beverage, to do what it does best: manufacture, market, and sell an affordable product providing value to customers.  Folia Water’s vision for success is when our filter paper has become a global grocery staple, sold in mom and pop kiosks throughout developing countries next to snacks, soap, and SIM cards – i.e., global business contributing to an important public health problem: universal access to safe, clean drinking water.

This article is not an endorsement by GBCHealth or any members of its Board of Directors. GBCHealth does not endorse or recommend any commercial products, processes, or services.

Alyssa GovindanInnovations in Global Health: The Business Case for Safe Drinking Water