A $62 billion opportunity for industrial water: How to break into the market

According to a report published by Bluefield Research, a water-focused market research firm based in Boston, Mass., by 2030, yearly investment in water and wastewater management will be more than $62 billion U.S. The firm attributes this to the explosion of AI-powered technology (driving the need for more data centers), the push to bring semiconductor manufacturing back to the U.S., energy transition, and national security.

All of this is good news for PHCP-PVF wholesalers, who play a key role in the deployment and maintenance of the country’s industrial water infrastructure.

According to Daniel Hogge, vice president at Ferguson Industrial, an industrial equipment supplier with headquarters in Newport News, Virginia., markets that prioritize reliability (and thus, uptime) are experiencing significant growth. He points to data centers, food and beverage facilities, municipal plants, power generation, and process manufacturing as examples. “Any place where downtime or inconsistent water quality carries a high cost,” he observed. For these organizations, the focus is on building more robust water supply, treatment, and cooling systems.

Hogge points to three primary trends that are transforming industrial water right now:

Resilience, which must be addressed during infrastructure design. “Plants want systems that stay steady under changing conditions, so durability, redundancy, and stronger control of pressure and flow are getting more attention,” Hogge explained.

Smart systems that offer remote control, flow verification, and monitoring capabilities make it easier for operators to manage performance and predict system failures.

Offsite and modular fabrication, in response to tighter project scheduling. Hogge notes that this requires solid collaboration between those working in design, installation, procurement, and supply.

“Taken together, these trends point to an industry that’s becoming more predictable, more connected, and more performance-driven,” Hogge said.

Data centers

For Amber Walsh, senior analyst at Bluefield Research, a water-focused market research firm based in Boston, Mass., data centers offer a number of opportunities for industrial water equipment wholesalers.

First, evaporative cooling systems tend to be infrastructure-heavy because of their high water intake. And, while closed-loop systems may have a smaller water footprint, Walsh says, they still require piping.

There is also the connection to the utility to consider.

“We’ve seen data center companies fund improvements in the municipal distribution network — they’re doing leak detection projects, and there are infrastructure opportunities on that side,” Walsh said.

Power generation

Walsh notes that power generation is at the forefront of water usage in the U.S. Legacy coal plants remain online to provide grid security in support of the data center market, which is, as established, growing at breakneck speed. Nuclear power plants are being recommissioned for the same reason. And, natural gas projects are another source of revenue.

“All three of these fuel sources have a big water component,” Walsh said. “Whether they use a once-through cooling system or a closed loop cooling system, there are a lot of infrastructure opportunities — especially at these new natural gas plants.”

Breaking into the market

Because of the size and scope of the projects, data centers and power generation clients tend to work with large-scale suppliers and vendors. The screening process can be long, Walsh says, but once you’re in, it’s much easier to do business.

On the other hand, food and beverage facilities vary in size, making them more accessible prospects for small to mid-sized suppliers, Walsh notes.

Despite the current administration’s shift away from ESG (Environmental, Social, and Governance), Walsh says that many companies are continuing to pursue their sustainability goals. To achieve them, they need their suppliers’ help in areas such as responsible sourcing.

“A lot of these companies are trying to up their water re-use efforts,” Walsh said. “Even if we’re talking about piping and values, [suppliers that] can provide support for those systems are really helpful.”

Selling industrial water systems

Selling industrial water equipment should be more about delivering a reliable solution than pushing product, according to Hogge. To do this, wholesalers need to be knowledgeable about the nuances of industrial water infrastructure. For Hogge, this includes, “an understanding of how the pieces of a water system fit together from source to treatment, to end user,” he described. Contractors also seek advice on how they can manage both the project schedule as well as risk, he adds.

“In industrial water projects, the real opportunities show up at the connection points — where different water streams, pressures, and systems come together,” Hogge said. “When those areas are understood early, the whole project tends to run smoother.”

Chuck White, a former plumbing, heating, and cooling contracting business owner and currently vice president of regulatory affairs at the Plumbing-Heating-Cooling Contractors Association (PHCC), based in Falls Church, Va., notes that wholesalers should have a solid grasp of what types of materials and piping are available, and which are best suited for specific industrial projects.

“If there is some specific product required — whether it’s high-quality stainless or certain grades and types of plastic materials — [they need to] understand the application, those materials, and what might be reasonable alternatives if you can’t get a certain product,” White said.

White notes that sometimes end clients push their designers and contractors to value-engineer certain aspects of their projects. He urges wholesalers to weigh the pros and cons of this approach before encouraging their contractor customers to prioritize cost-cutting over longevity. Value engineering may save money up front, but the potential for compromised performance and system failures may turn out to be more expensive in the long run.

“[You have to] think about all of those implications,” White said. “You don’t want to lead contractors down a rosy path that leads to problems in the future.”

At Ferguson, Hogge relays that aside from focusing on appropriate materials selection, teams also make customers aware of any supply chain disruptions that may affect their projects. This “early visibility,” he says, gives teams the opportunities to devise alternate plans to keep projects on schedule.

White, too, acknowledges that supply chain constraints continue to present a challenge — not just for new deployments, but for ongoing maintenance efforts as well. This is especially true for 24/7 facilities that can’t tolerate downtime, such as data centers and manufacturing plants.

This puts pressure on wholesalers, who may not be able to stock enough redundant parts for, say, an entire battery plant. In this scenario, how does one apply inventory management best practices with the need to continue providing top-notch service to customers?

White counsels opening the lines of communication. “They can’t have one of everything, but they can work with [contractors and end users] to figure out the most common items they will need to keep things up and running,” he said. “For any of these industrial facilities, running time is more important, in some cases, than the price of the parts or paying to get it fixed.”

While the industrial water market may be a more difficult market for PHCP-PVF wholesalers to break into, Walsh argues — thanks to how vast it is — breaking into it can be worth the effort.

“Industrial water is unique,” Walsh said, “but it also presents a lot of different opportunities.”