Case study: Phox Water

Phox Water is a Glasgow-based water filtration company driven by a mission to be truly sustainable.

The brainchild of founder Scott Dickson, Phox provides environmentally-friendly and reusable water filtration products, overcoming the problems associated with the millions of single-use plastic water filter cartridges which end up in landfill each year.

Scott created the company in 2017 when he was researching a cure for his acid reflux. Phox filters have been designed to solve varying water issues offering three different filter formulas, based on your areas water composition.

Scott recognised a gap in the market to filter tap water without the need for single-use cartridge replacements. The Phox water system features a reusable cartridge which is refilled with a filtration mixture on a monthly basis. The manufacturing, packaging and distribution of its biggest selling product is all done within a 50-mile radius of its Glasgow base.

It initially launched as a white-label only product on Amazon, seeing strong sales growth in the first few years to the point where meeting buyer demand was a key challenge.

Scott immersed himself in Scotland’s entrepreneurial support network, joining ESpark, Scottish EDGE and Scottish Enterprise’s Unlocking Ambition programmes. Not only did these networks provide funding but advice and support for Scott to take Phox to the next level.

Like many businesses, the Covid-19 pandemic impacted Phox due to Amazon’s focus on particular products and services. It was at this point where Phox focused on growing sales through its own website, creating a direct route to consumers and an avenue for significant sales growth.

In turn, the sales growth allowed Scott and his team to invest in their own manufacturing and production facilities in Scotland instead of having to rely on other suppliers.

2022 was a pivotal year for Phox as it gained listings with major retailer John Lewis and launched a filter compatible with the market’s leading filtration jugs and devices. In 2023 the company was acquired by Culligan, a global provider of water solutions to residential, workplace, public and commercial settings. Its products include instant filtered water taps, bottle refill stations and water treatment in industrial situations.

Phox’s founder Scott Dickson said: “I’ve always been conscious of the impact my actions have on the environment and have tried to avoid single-use plastics wherever possible, particularly bottled water. That guilt has been a big driver in creating a mission for Phox which would then go on to deliver the impact I thought it could deliver. The mission to be sustainable pushes the business forward.

“The opportunity to be acquired by Culligan was attractive as they recognised the international growth ambitions we have for Phox. In the relatively short lifespan of the company we’ve always looked towards new challenges. The sale to Culligan will allow us to enter new markets and develop Phox to its full potential. We’re currently looking at several new markets, particularly the US. That was one of the most appealing factors behind the transaction.”

A corporate team from Harper Macleod advised the shareholders of Phox Water on the sale to Culligan.

Jo Nisbet, a partner in Harper Macleod’s corporate team, said: “Phox is the perfect illustration of a young Scottish company which has created a product with social impact. Scott and his fellow directors have built an attractive proposition in a growing sector and in a short space of time. Phox products solve a problem for a wide consumer base in a sustainable manner, which aligns perfectly for eco-friendly and environmentally conscious customers.