A Year of Water Industry Pivots

15 Dec 2020  |  Steph Aldock

We’ve all pivoted a number of times since news of COVID-19 first broke last spring. Whether it be schools opening or closing, remote work, or countless Zoom meetings, the pandemic has forced us to move quickly on our feet. In California, as we close out the year, we find ourselves back in a stay-at-home order, seeing many of the same restrictions first initiated in March.

Like you, Bluefield Research has also pivoted to better serve our clients and the water industry. We launched monthly webcasts for Insight Service clients in response to the initial news of COVID. Our team established an ongoing podcast series, the Future of Water, to bring water issues to a wider audience. Almost immediately, and partly because of our anticipation of a looming recession, we revamped our global water market forecasts for digital, municipal, and industrial water sectors to account for pandemic and economic scenarios.

Over the course of the last ten months, our team of water experts has identified a number of pivots across the water industry:

Technology companies turn to wastewater analysis with longer-term opportunity for public health. Kando, GoAigua, and Biobot are moving to the forefront by promoting wastewater-based epidemiology capabilities (i.e., using sensors and real-time data analysis) to identify and track COVID levels in municipal wastewater systems. At the same time, digital companies such as 120Water are expanding business models beyond lead to other contaminants. In what was once a pipe dream, the growing resources and strategic investments directed towards the precise and timely identification of pathogens in water and wastewater, at a neighborhood, and even building level, is groundbreaking for public health departments.

Big Tech increases water sector focus, pointing towards longer-term disruption with artificial intelligence. Just recently, Amazon launched its Monitron asset management kit, representing another step towards disrupting the utility sector’s status quo, and Google partnered with the National Oceanic and Atmospheric Administration to enhance weather forecasting and climate-related responses. As technology companies dedicate more resources— whether it be to address climate resiliency or smart-home strategies— big tech companies are increasingly setting their sights on water as a strategic opportunity.

Corporate resiliency measures put spotlight on water. In 2020, we already saw PepsiCo’s US$1 million green bond initiative, and Microsoft went as far as to make a water-specific goal to replenish more water than it uses by 2030. Salesforce’s Chief Impact Officer recently predicted that climate change solutions will go mainstream with corporations helping to lead the way. Big corporations are notably addressing water-related risks in their own operations, facilities and supply chains, while also trying to leverage consumer, investor, and stakeholder consciousness of environmental and climate issues.

The Amazon Effect shakes up consumer and industrial water market opportunities. At the forefront of this changing landscape is an acceleration of select industries, including pharmaceuticals, data centers, food & beverage, and online retail that require water & wastewater solutions. The Pulp & Paper sector is benefitting from demand for corrugated cardboard packaging for home deliveries, while the food & beverage sector is pivoting towards residential products. Now ten months removed from the great toilet paper shortage, our experts are tracking industrial water market opportunities, shaped by new market conditions and changing consumer behaviors.

Tightened finances call for rededication to existing solutions for utilities. In the absence of a wide sweeping infrastructure package, municipal water utilities will quickly be forced to tap project financing sources at greater scale (e.g., WIFIA, State Revolving Funds) which have been underutilized in select states. Larger, more sophisticated utilities are already re-financing debt and cities including Atlanta (GA), Hampton (VA), and Buffalo (NY) are relying on firms like Quantified Ventures to mitigate financial risk. For those unwilling or unable to adjust to a this new paradigm, utilities are more likely to consider a role for third-party, contract operations or ownership.

What pivots are you seeing? As we head into 2021, I’m reassured to know that Bluefield and the water industry are demonstrating the flexibility to pivot in the face of unprecedented challenges. We look forward to continuing to guide our clients’ water market strategies.