Recent news in the outdoor industry has once again brought much attention and questioning about the presence of the chemical, bisphenol-a (BPA), in reusable bottles. In an August 19, 2009, article by SNEWS, popular bottle makers, Sigg and Laken, publicly acknowledged for the first time that every aluminum bottle made and sold by their companies prior to August 2008 was knowingly lined with an epoxy resin containing BPA. Many scientific studies indicate BPA has the potential to act as an endocrine-disrupter when ingested, and fetuses, infants, and children are most susceptible to develop negative human health effects associated with BPA such as diabetes, heart disease, cancers, infertility, obesity, and neurological disorders.Now I don't know if this is just aggressive marketing hype or a real concern, but I, and my family, switched to using only stainless steel water bottles a few years ago. In fact I own several aluminum (and some plastic) bottles that haven't been used in years; no point in taking chances with BPA.
All this got me thinking, or speculating, about Klean Kanteen. It's an interesting business. These stainless bottles have been made for some time by several factories in China. The quality of some is very good, but others are marginal. I know because we've recently been looking at samples from several factories. Kleen Kanteen seems to import some of the better ones, puts their name on them, and markets the hell out of them. It's a nice Kleen business model and KK seems to have done everything right. I admire the company. But I see it as a business model with low entry barriers; it's not terribly capital or development intensive while having good growth potential. In other words it is not a "deep moat" business. That means that other companies can easily jump in and be competitors. I suspect that there are few proprietary designs, unique products, or exclusivity agreements with manufacturers. A business of this sort is primary based on brand name, marketing, and distribution. So a company, like Velo Orange for example, that has distribution and marketing infrastructure in place could easily jump the moat and be a competitor.
But should we be a competitor? I have always been uncomfortable with distributors who set minimum prices or even minimum advertised prices. I also don't like the fact that we can no longer get the bottles without a logo. And we can't sell the current bottles to the almost 200 VO dealers. So that's why we've been looking at sample bottles from various factories. A container of stainless steel bottles is not a small investment, but paying for another company's advertising, when we don't benefit from it, is not a wise investment. Hmmm.