Primo Water Corporation, together with its subsidiaries, provides purified bottled water, self-serve filtered drinking water, water dispensers, and carbonating beverage appliances sold through major retailers in the United States and Canada. As of December 31, 2011, the company’s products and services were offered in each of the contiguous United States and in Canada at approximately 23,600 combined retail locations, including Lowe’s Home Improvement, Walmart, Kroger, Safeway, Albertsons, Winn Dixie, H-E-B Grocery, and Walgreens. Segments The company operates through three segments: Primo Water (Water); Primo Dispensers (Dispensers); and Primo Flavorsation (Flavorstation). Water This segment consist of the sale of multi-gallon purified bottled water (exchange services) and its self-serve filtered drinking water vending service (refill services) through retailers in each of the contiguous United States and Canada. This segment’s services are offered through point of purchase display racks or self-serve filtered water vending displays and recycling centers that are located at major retailers in space that is underutilized. Dispensers This segment sells water dispensers that are designed to dispense Primo and other dispenser-compatible bottled water. This segment’s sales are primarily generated through major U.S. retailers. The company’s water dispensers are sold primarily through a direct-import model. It designs, markets, and arranges for certification and inspection of its products. Flavorstation This segment consists of the sale of the company’s Flavorstation products, which include home beverage appliances, flavor concentrates, carbon-dioxide cylinders, and accessories. In 2011, the company launched its home carbonating beverage appliance and consumables business in the United States with the introduction of its Flavorstation 100, a manually operated single-serve carbonating beverage appliance. The company has a strategic partnership with Sparkling Drink Systems – Innovation Center (SDS), an international marketing and manufacturing company specializing in home beverage carbonation products. Through its strategic partnership with SDS and its other suppliers, the company develops, manufactures, and sells home carbonating appliances and exchangeable carbon-dioxide cylinders, as well as consumables consisting of carbon-dioxide refills, reusable carbonating bottles, and flavor concentrate to add to the carbonated water. In 2011, the company started selling its products through a major home improvement retailer in the United States. It distributes its products directly in the United States under the Primo Flavorstation brand name. Products Carbonating Appliances The company’s carbonating appliances are countertop-based and have stylish design aesthetics. In addition, its carbonating bottles attach utilizing a bayonet attachment. Consumers purchase a ‘starter kit’ consisting of a carbonating appliance, carbonating bottle(s), and with various kits, samples of flavor concentrate. The starter kit also includes an exchangeable carbon-dioxide cylinder, which provides the gas to carbonate beverages, as well as allows the consumer to exchange the empty cylinder for a discount on their next carbon-dioxide cylinder purchase. Carbon-Dioxide Refills The company provides beverage-grade carbon-dioxide refills through authorized retailers, as well as its own e-commerce site (www.store.primowater.com). When consumers have exhausted their cylinders they exchange their empty cylinder at its retail customers and receive a discount toward the purchase of a new full cylinder. Empty cylinders are collected, transported to a centralized facility where they are inspected, cleaned, and refilled for distribution. Flavor Concentrate The company offers 16 Sparkling Beverage Mixes and has approximately 120 flavor concentrate mixes in development with its flavor partner. Its flavors consist of U.S. carbonated sodas (including cola, lemon-lime, and root beer) and are available in regular and diet formulations. Additionally, it has developed a line of Fruit Sparklers that includes flavors, such as berry po