Falcon Flows into the Mainstream

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Falcon Flows into the Mainstream
Falcon CEO James Krug in a Los Angeles Coliseum men’s room with the company’s waterless urinals.

Question: What can you find at Dodger Stadium, the Hollywood Bowl, the Coliseum, the Rose Bowl and the Greek Theatre? And even at the Taj Mahal and the Beijing “Bird’s Nest” stadium built for the 2008 Olympics?

Answer: Waterless urinals in the men’s restrooms designed and manufactured by West L.A. company Falcon Waterfree Technologies.

The water-saving receptacles have become a common sight in men’s bathrooms throughout Los Angeles and other cities across the globe. But it hasn’t been an easy road. The company had a tough time convincing building owners to buy its fixtures at the outset, and a tougher time getting codes to catch up with its technology. Urinals that didn’t use the standard water-flush process did not conform to plumbing codes, and so their installation was prohibited.

“Nobody had ever heard of a waterless urinal,” said James Krug, Falcon chief executive. “It made no sense to people.”

So to move waterless urinals to the mainstream, Krug traveled to technology expos around the country to showcase the product, and met with city officials to ask them to update codes in order to allow waterless urinals in their jurisdictions. The efforts paid off.

Ten years after its humble launch, the company has 70 employees in offices around the world. With Falcon urinals installed in stadiums, concert halls and some of the world’s best-known tourist destinations, the company has captured 80 percent of the market for the eco-friendly devices.

They look like standard urinals but use no water. The receptacles limit odors because of an oil-like sealant that floats inside the gooseneck trap. Water and urine pass through the sealant but can’t come back up.

Falcon urinals cost about $200 for small fixtures and $350 for large ones. Plumbing contractors charge about $150 to install each one, bringing the total to between $350 and $500. But water savings are estimated at about 40,000 gallons – worth as much as $200, depending on location – per year.

The potential for long-term savings helped Falcon sign up the Pasadena Rose Bowl, its first big customer, in 2003. The football stadium’s board decided to take a chance on an unproven company and agreed to replace its 400 urinals with Falcon products. The motivating factor was the effort to conserve water.

“The Rose Bowl was able to take a leap of faith with us,” Krug said. “Then we were able to capitalize on that success.”

Bathroom beginnings

Falcon was founded in 2000 with financial backing by billionaire Marc Nathanson, No. 36 on this year’s list of the Business Journal’s Wealthiest Angelenos. At the time, there was a niche market for waterless urinals, but only in Germany. The only other player in the market was Waterless Co., which has moved from Los Angeles to Vista.

Krug, a former lawyer and executive at Walt Disney Co., believed waterless urinals would become more popular as more city governments looked to conserve water and build sustainable buildings.

But what he hadn’t considered was that potential customers didn’t want to make the change from standard flush fixtures from Kohler Co. and American Standard.

“We underestimated how hard it is to change people’s ideas about what tends to be a very personal item,” he said. “People were resistant to change.”

The biggest hurdles, however, were plumbing codes: Building owners weren’t allowed to install waterless urinals. At first, Falcon had to work with a number of local governments to overturn city plumbing codes in order to make sales in those cities.

In 2006, after Falcon and other companies and organizations lobbied for change, trade groups updated a national plumbing code to allow waterless urinals, preempting any local restrictions.

Since then, the market for waterless urinals, though still small, has grown significantly and Falcon’s revenues have tripled.

Sales are expected to continue booming. Krug estimates that there are 55 million urinals in the world that could be replaced with waterless fixtures. That figure doesn’t include urinals installed in new buildings each year.

With customers in more than 45 countries, Falcon has become the market leader, outpacing competitor Waterless.

Falcon, based in an office high-rise along Olympic Boulevard, has also added several notable names to its board of advisers, including former Los Angeles Mayor Richard Riordan and former Vice President Al Gore.

Lance Williams, executive director of the L.A. chapter of the U.S. Green Building Council, said Falcon has been able to stand out thanks to sales to prominent venues such as the Rose Bowl and the Sun Life Stadium in Miami.

“Falcon’s one of the organizations that’s been out there the longest and they’re starting to have very solid market penetration,” Williams said.

The company now faces competitive pressure from Kohler, Wis.-based Kohler Co. and Piscataway, N.J.-based American Standard, which have gotten into the waterless game.

“We don’t win all the time, but we do well against the competition because we’re able to explain our features and benefits,” Krug said. “It’s better for us that Kohler has entered the market than for Kohler to say there’s no market there.”

Green standards

A number of Falcon’s clients are building owners looking to earn certification for sustainability from the U.S. Green Building Council’s certification. Installing waterless urinals earns a building about 15 percent of the points needed for environmental certification.

“Water conservation is a very critical aspect,” Williams said. “When you have a product that offers the opportunity to save water, that’s a great benefit to the community at large.”

It was the opportunity for certification that convinced Nadine Watt, president of Watt Plaza in Century City, to replace the office building’s 88 urinals with Falcon fixtures in 2008. The urinals also have saved the building about $10,000 a year.

“I absolutely give credit to Falcon for sending us on a sustainability path,” Watt said. “We then started doing low-flow faucets and low-flow toilets for women. It was the springboard for becoming certified.”

Because it’s headquartered in Los Angeles, Falcon has focused on selling its urinals to all the city’s largest venues.

Most recently, Falcon sold 461 of its fixtures to the Los Angeles Memorial Coliseum. Thanks to rebate programs from the Metropolitan Water District and the L.A. Department of Water and Power, the Coliseum did the conversion at no cost.

Krug said he expects the demand for waterless urinals in Los Angeles and in other cities worldwide to continue to increase as more people become aware of the need to conserve water.

“We know that by 2025, the United Nations says that 55 percent of the world will be in total water crisis,” he said. “Any urinal that’s not water free is just flushing good water down the drain. That’s just silly.”

Falcon Waterfree Technologies LLC

FOUNDED: 2000

HEADQUARTERS: West Los Angeles

CORE BUSINESS: Manufacturing waterless urinals.

EMPLOYEES: 70 total; 15 in Los Angeles (same as last year).

GOAL: Increase market penetration nationally and internationally.

THE NUMBERS: Revenue has tripled since 2006.

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