If you look at the global economic pyramid, Xylem conducts most of its business with customers near the top. From a profitability standpoint, it makes sense to provide solutions to the world's biggest municipal wastewater operations and global building services customers that purchase large-scale systems and multiple products.
But with its new business model called Essence of Life, the Flow Control business is showing that there is an exciting complement to Xylem's traditional strategies by addressing the needs of people living at the economic base of the pyramid.
"Right now, there are 2.5 billion people around the world who earn less than $2.50 a day," says Keith Teichmann, Director of Innovative Networks and Marketing for Flow Control. "With Essence of Life, we are looking for ways to 'solve water' for these small plot farmers and rural customers in emerging markets."
Based on extensive voice-of-the-customer field visits and more than 60 field tests of early prototypes in Africa, India, Latin America and Pan-Asia, Flow Control now has its first two Essence of Life products in the pipeline: an innovative "stepping pump" and a revolutionary portable solar pumping system. Both products let people improve their lives through their own efforts.
Today, in many countries, small plot farmers are forced to spend half their work day carrying buckets of water – via ropes wrapped around their shoulders -- from the water source to the fields.
With the stepping pump, farmers simply operate a dual foot pedal – a motion similar to climbing stairs – to charge the pump and generate a strong flow of water through a hose and spray nozzle. The solar pump uses the sun for power and has wheels that let farmers move it easily to areas of their fields that need water.
While these are purposefully simple products – with the minimal amount of removable parts and no need for special tools – they represent their first step toward farming mechanization.
"Our stepping pump and solar pump cut irrigation times greatly, ease the physical burden on farmers and make it easier for them to efficiently apply water and achieve higher yields and increased crop rotations," says Sam Rulli, a Senior Engineer for Flow Control.
Flow Control expects to begin production on the stepping pump by the end of 2012, with the solar product following later next year. In the meantime, it's concurrently tackling the distribution and service channel challenge. These small farmers don't have local pump distributors or Home Depots, so Flow Control is forming partnerships with the companies that directly sell and service various agribusiness necessities to small plot farmers – and with organizations focused on alleviating rural poverty and water shortages.
"There will be more than 9 billion people on the planet by 2050, and agricultural production will have to double to feed them all," says Teichmann. "By supplying products that meet the most basic needs of small, rural farmers in developing regions, we are doing well and doing good. We're doing well by establishing our next generation of customers who will purchase additional Xylem products as they reach higher socioeconomic status. And we're doing good in the near-term to help eradicate extreme hunger and poverty by unleashing the aspirational and entrepreneurial characteristics within these communities."