Atmospheric water generators were a feature in the "Star Wars" space opera movie series. But the idea of creating water from the air isn't just a figment of George Lucas' imagination.
In 2001, entrepreneur Mike Klein acquired the rights to patented technology that sucks water from the air through a dehumidifying process. The condensation then drips into a tank, after which it is filtered and made drinkable.
Klein and five partners launched Santa Monica-based Air2Water LLC, and started developing sleek aqua and silver machines that might look like something out of sci-fi but are designed for use on Earth.
"It really is that simple, and it's something that scientists look at and say, 'Why didn't I think of that?' " said Klein, the 53-year-old chief executive of Air2Water.
The machines are sold across the U.S., and in Europe and Mexico for home, office and industrial use, with prices ranging from $2,000 up to $500,000. The dispensers are manufactured by Singapore-based Hyflux Ltd., the leading water treatment company in Asia.
While dehumidifiers are common and inexpensive, these machines are different because of their medical grade components, Klein said. Also, a standard filtration process won't remove lead and other metals, while the company's technology will result in complete purification.
Air2Water is entering the market as American consumers are drinking more bottled water than ever.
According to the Beverage Marketing Corp., a New York-based consulting group, the United States ranks No. 1 in bottled water consumption, with Americans drinking 8.8 million gallons in 2007, up from 5.8 million gallons in 2002.
One of Air2Water's largest U.S. distributors is Xziex, a Minnesota-based company that resells the machines to 2,300 subdistributors across the U.S.
"Americans are spending billions on bottled water," said Chad Schwendeman, Xziex's CEO. "We want them to allocate the funds they are currently spending to this technology, and do their part to help the environment."
Arthur von Wiesenberger, a Santa Barbara-based analyst who follows the bottled water market, has seen Air2Water's machines, and said the company has the potential to successfully move into an already crowded drinking water market.
That market began with bottled water delivery. Then filtration products came into the picture. Von Wiesenberger said it's possible that technology such as Air2Water could carve out a slice, too.
"I think this device would appeal to the home office and users of large containers, like 5-gallon bottles," he said.
Klein said he expects Air2Water to net $500 million in products sales, licensing fees and joint venture distribution deals in the next two years.
Von Wiesenberger said the company has a significant hurdle: The cost of the machines could prevent them from becoming a common fixture in consumers' homes.
"You are competing with equipment that starts in the hundreds of dollars," he said. "Sink-top filtration or home- and office-delivered water are not a lot of money; they have to try and make this an affordable product."
Distributors set their own prices for Air2Water's machines, which produce anywhere from two to five gallons per day for home and office use, and up to 3,500 gallons per day for industrial use.
Xziex sells the Dolphin/Dragonfly model to subdistributors for $1,995. It's about the size of a typical home or office water cooler and can produce about five gallons of water per day. Air2Water also makes a tabletop model; it looks like a high-end espresso machine. Xziex sells it to subdistributors for $2,500. The distributors then mark up the price.
"The standup model has been outselling the table-top by two to one," Schwendeman said.
The project started when Klein was contacted by Frank Longo, a Santa Monica attorney who is now Air2Water president. Longo had discovered the technology when it was in a prototype stage.
Longo is the son of Lawrence Longo, a former deputy district attorney who made headlines when he was fired for a conflict of interest in the Suge Knight assault case. Lawrence Longo later introduced Klein to his son Frank.
Klein is a serial entrepreneur who has owned car repair shops and restaurants. He was also a record label executive, and worked with the likes of gangster rap star Eazy-E before leaving the music industry in the late 1990s and going into semiretirement. Klein said Longo convinced him to come back to work.
The machines work this way: They draw moisture from the air with a fan, and turn it into water vapor with cooling coils that are coated with medical-grade Teflon. The vapor turns into liquid through condensation, then drips into a plastic collection tank. From there, it's pumped through water filters, then passes through ultraviolet light wavelengths to kill bacteria.
"The key issue is freshness and purity," Klein said. "There are no chemicals, like chlorine, used to kill the bacteria."
Because it's not chemically treated, Klein said the water cannot sit for too long, otherwise, algae will form. So it is recirculated through ultraviolet light to stay pure and fresh.
The amount of water generated by Air2Water machines depends on the amount of humidity in the air. If the humidity in the air is 35 percent, the machine produces 2 gallons of water in one day; if the humidity reaches 50 percent, the machine can dispense 4 gallons of water in one day.
Air2Water has also been focusing on fighting companies that are copying the company's patented technology.
In May, Air2Water won a patent infringement lawsuit against Vancouver, British Columbia-based Hendrx Corp., with a U.S. federal court awarding Air2Water $1.2 million in damages.
Even though the industry is strong, the economy may not be favorable to introducing an expensive water-making machine, said von Wiesenberger.
"More than ever, people are going to look where they are cutting corners," he said. "It may not be the perfect time to introduce a high-end water device."
Core Business: Turning air into drinking water through a dehumidification and filtration process
Employees in 2008: 6 (same as 2007)
Goal: To serve as the main method of how consumers get their drinking water
Driving Force: Consumer demand for bottled water
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