Reading the bottled-water tea leaves
Lots of bottled-water market news lately.
In Canada, the Polaris Institute is celebrating the “beginning of the end of bottled water” with a roundup of municipalities and school districts that have quit selling or supplying bottled water (read the article here). Joe Cressy, the author, believes the tide has turned, but notes “bottled water companies are not going to simply stop producing bottled water. Let’s be honest, there is a lot of money to be made from selling tap water back to residents in plastic bottles. In the face of today’s backlash, bottled water companies have increased their advertising and lobbying activities. Nestlé, for example, continues to offer municipalities money for recycling projects on the condition that they rescind their bottled water restrictions. The City of Thorold, Ontario just recently rejected a $90,000 offer from Nestlé to rescind their bottled water ban.”
Meanwhile, the Canadian water brand Naya, which had all but disappeared in the United States, is now “planning aggressive domestic expansion” in bottles made of 100 percent recycled plastic, the first of their kind for water, Brandweek reports. Granted, Naya is a tiny brand and doesn’t need a vast and constant stream of recycled PET, but one can only hope this increases the pressure on Nestle, Coke and Pepsi (if they’re going to continue selling water in disposable bottles, that is) to follow suit. After all, Americans discard 30 to 40 billion plastic water bottles every year.
Over in the U.K., rumors of the demise of the bottled water industry appear to be premature. Between 2006 and 2008, volume sales of water in the UK fell 11 percent, reports Grocery Trader, but in 2009, sales were down a mere 1 percent. “With economic conditions expected to improve, Mintel forecasts that volume sales will start growing steadily from 2011 onwards and that by 2014 the British will once again be consuming 2.5 billion litres a year.”
Yesterday, Matthew Savage at Triple Pundit wrote a piece on the slowdown in bottled-water sales and the rise in the use of re-usable bottles, noting “But the bottled water industry is enormous, estimated at about $16 billion, and reusable water bottles are a mere drop in the bucket. It would take a mass exodus of people using refillable water bottles to take away the significant market share of the bottled water industry.”
Savage ends by asking, “Reusable water bottles are a great step in the right direction, but how can bottled water companies fundamentally rethink their business models?” Unless “rethink their business model” means quit selling bottled water, I don’t think there’s a lot they can do to satisfy people who are fundamentally against the growth of bottled water. Yes, more people need to use refillable bottles, and we need more places to refill them, and we need guarantees that public water supplies are safe (or filtered). But do we really want companies interested in increasing their sales of bottled water — companies that answer to shareholders, not the public– to move into these areas?