Derek Callaghan, Director of Sales & Marketing in SIP Technologies LLC, explains his point of view about Watercooler Industry, the challenges for the POU industry next year or how to preserve water quality. With over 10 years of experience Callaghan appears confident about two things: what the future brings and spreading technology knowledge. He goes ahead when you inquire about how he sees the currently emergent markets at Eastern Europe, Callaghan answers: “The key question is what market will be next?”

• WE

  What is the principal goal of SIP Technologies in the watercooler industry?

• Derek Callaghan

  Our customers take every precaution to ensure that the water they bottle is of the highest possible standard. It is our goal to make sure that the quality of the water dispensed through water coolers is exactly the same as when it was originally bottled.

• WE

  Since you are responsible for international sales, what differences can you tell us between the American and European markets? What can each market learn from the other?

• Derek Callaghan

  One of the most interesting aspects of my job is dealing with the differences between markets. But not only between the European and US markets, each European country has a very distinct and separate market. I think it is fair to say that in the last few years the US market has learned a lot from the Europeans in relation to hygiene in general and sanitisation in particular. When I started with SIP Technologies six years ago, regular cooler sanitisations were already firmly imbedded in the culture of European markets. EBWA had already mandated a minimum standard of two sanitisations per year for each cooler (although they recommend four), while the BWCA (British Water Cooler Assoc.) required their members to sanitise four times per year. The US markets learned from the Europeans that by promoting higher standards in hygiene and instituting regular sanitisations they could fight competition from supermarkets and office supply stores offering to sell low cost coolers without any accompanying service package. I’d like to think that the work done by SIP Technologies in providing automatic daily cooler sanitisations to our customer’s coolers allows them to raise the bar on quality and service thereby successfully fighting the challenge these big box retailers present.

• WE

  SIP Technologies, LLC was established in 2003 to focus technical development on insuring that water coolers do not compromise water quality… How do you go about this? What would you say are the main policies in order to preserve water quality?

• Derek Callaghan

  Since ozone or 03 was discovered in the mid 19th century it has always been accepted as the most effective element that can safely be used in water treatment. The problem was that it was only possible to do this in municipality water reservoirs or in tanks that had a capacity of hundreds of gallons. Where SIP’s innovation comes in is miniaturizing the process to be able to effectively work in the 3 litre reservoir of a point of use or bottled water cooler. SIP’s patented micro-bubble system automatically ozonates the water for a few minutes at a pre-programmed time each night ensuring that bio-film cannot form on the reservoir wall. Since ozone is an unstable gas that will always revert back to it’s stable state of oxygen (02), we then simply inject filtered air into the reservoir to remove all traces of the ozone. The entire process takes around 15 minutes after which you have a completely clean reservoir from which to drink. In answer to your second question, bio-film is the enemy of water quality. It is the main reason that WE has mandated cooler sanitisations on their members. It’s the slimy substance that forms on the reservoir wall after a period of time and this must be regularly removed through cooler sanitisation. The principle behind SIP’s system is that you start with a clean reservoir and by injecting a small amount of ozone every single night we eliminate all bacteria which is the cause of biofilm in the reservoir, thereby maintaining the water quality.

• WE

  Are the differences among countries directives an obstacle for the international watercooler industry to grow better or increase safety and benefits? What do you propose in order to solve these obstacles?

• Derek Callaghan

  There is no doubt that it can be frustrating when countries unilaterally impose directives that impact our industry. However these directives are often for the benefit of society and therefore companies in our industry are generally happy to work with lawmakers in order to create a directive that helps society while minimising the impact on our industry. Without an organisation such as WE, legislators would enact directives without allowing our industry’s voice to be heard. This is one of the primary reasons to be a member of our association. As an individual company, you will have little impact on these lawmakers and often you will only become aware of a directive when it has been enacted, meaning it is too late to put forward your case. As a member of WE you can count on the full force of over 300 companies operating in practically every European country to lobby on your behalf. More importantly, WE’s office in Brussels ensures that they are in a position to pro-actively put forward our industry’s position during the consultation period of these directives. Thus ensuring amendments are in place protecting your business interests before these directives are even enacted.

• WE

  Besides working at SIP Technologies, you are a member of EDWCA (European Drinking Watercooler Association) board too. What are the challenges for the Point of Use market next year?

• Derek Callaghan

  Compared to the bottled water industry, the Point of Use market is in its infancy. The challenges that they face are very similar to those experienced by the bottled water market when it was at a similar stage. Namely, that some companies are focusing on growing their customer base rather than taking care of the bottom line. They do this by dropping their pricing to unsustainable levels and contribute to the customers perception that Point of Use is a cheap alternative to bottled water. Why is it that a customer will happily pay a large call-out fee for a plumber, even if he only takes five minutes to complete his task, but expects trained and certified POU installers to install a watercooler and return twice every 12 months to replace the filtration system and sanitise the cooler but expect to pay less than they would do for the plumber’s 5 minute visit? Declining prices can mean a temptation to cut corners on the quality of the equipment being used, the filter change frequency and on the sanitisation protocol. It is important therefore that EDWCA and WE take a leading role in ensuring that their members adhere to the highest possible industry standards and their auditing process ensures that end users can be certain that their members operate using industry best practice.

• WE

  What is your vision about the Eastern emergent market? Do you see more opportunities or more threats? Maybe is similar to… (any other emergent market in the past, few years ago)?

• Derek Callaghan

  The Eastern markets are a very interesting growth area for our industry. These markets are generally characterised by relatively poor quality water from the mains and therefore has a well established bottled water drinking culture primarily through the use of pumps to dispense ambient water from the 5 gallon bottle both in the office and at home. As these economies grow and the middle classes become more affluent, these pumps are gradually replaced in the offices by water coolers that offer chilled water to drink, and hot water for teas and coffees. Following on from this, after a period of acceptance in the office people begin to demand the same facility in the home. This explosive growth in the watercooler market occurred in Poland and Russia around 2003 and now penetration is starting in the domestic market with smaller table top watercoolers. Romania and Serbia followed a couple of years later. While Turkey is now starting to experience a similar transition. The key question is what market will be next?

• WE

  Do you think European market has to learn from the American or Asian market in any way?

• Derek Callaghan

  All markets can learn from one another regardless of the various stages of development that each market is in. For example, the US market is the driving force in introducing energy efficiencies in water coolers with their Energy star program and the Asian markets are leading the way in developing alternative refrigerant gas solutions for the watercooler equipment.

• WE

  What are the next steps the industry —and especially Point of Use industry— should give, regarding environmental issues? Does SIP Technologies products offer any environmental benefits?

• Derek Callaghan

  Every person in this industry, be they supplier, distributor or National Association, continues to play it’s part in ensuring environmental initiatives are at the forefront of our priorities. The industry has taken a proactive role in helping to increase the recycling rates of the 5 gallon bottle and helping distributors and manufacturers adopt their requirements under the WEEE initiative. I have already mentioned the next steps on the horizon, that is the replacement of the R134a refrigerant gas in both bottle and Point of Use water coolers with a CFC free alternative and the increasing improvements in the energy performance of the watercoolers. We, at SIP Technologies are very proud of our SIP2000 machine that allows SIP to control the cooler’s compressor and therefore shut the cooler down at night and only turning it back on just before the employees return to work in the morning. Under normal circumstances it is not advisable to switch the cooler off overnight either manually or using a timer switch, as the temperature of the water will increase and this allows any bacteria in the reservoir to multiply much more quickly, speeding up the growth of biofilm. However, since SIP is also performing an automatic manual sanitisation during the night we are eliminating 100% of any bacteria in the reservoir thereby allowing the water cooler to be safely switched off from a hygiene standpoint while at the same time allowing energy savings of over 50% for the end user.

• WE

  Would you ask Watercoolers Europe association for any particular benefit to Point of Use industry? How do you evaluate the WE work in this sense?

• Derek Callaghan

  We as an industry and as an association are in the hydration business. I would say that a growing number of our distributor members offer both bottled water and Point of Use to the end user. Therefore it is important that WE continues to work to promote a “One industry, two solutions” strategy. The work being done on instituting industry standards for Point of Use is evidence of this.

• WE

  Have you seen the new WE website? What is your opinion about the new approach in the Watercoolers Europe communication strategy?

• Derek Callaghan

  Having been a member of the association for many years I have seen first hand that we have been very effective at doing the necessary work behind the scenes to ensure that our industry has continued to thrive. Where we have not been so successful is communicating that work to our membership. I believe that our new communications strategy in general and our new website in particular is an important step for the association in reaching out to our members and keeping them better informed of the important work that we do. With our membership better informed, Watercoolers Europe can only go from strength to strength.

Past interviews

• 

  Jeroen Peters

  WE's Chairman

• 

  Diane Koyich

  International Liaison for Crystal Mountain