The environmental arguments against bottled water are gaining more traction, and people are starting to question whether bottled water is really worth it, financially and environmentally. Recent sales reflect a drop in consumer demand for bottled water — Nestlé SA, the world’s largest food and beverage group, reported a three percent drop in its first-half profit last August, according to MarketWatch. In past years, Nestlé was growing in the double digits, as were most bottled water companies.
Overall, the bottled water industry in the United States has expanded at a phenomenal rate, though the market dipped slightly last year. According to data from Beverage Marketing, a U.S.-based data and consulting firm, retail sales of single-serving plastic bottles increased from 1.4 billion gallons in 2000 to 5.2 billion gallons last year, lifting their share of total bottled water volume from 29 percent to more than 60 percent. And, over the past decade, per-capita consumption of bottled water in the U.S. has more than doubled to about 200 bottles per year, per person, according to MarketWatch.
With these growth figures, it is difficult to say whether the recent slowdown is a true indicator of a longer-term trend. While it may seem that the movement against bottled water is growing, this has often been far more pronounced in the media than in the sales data.
The “Refill Revolution”
Sales of reusable aluminum and stainless steel water bottles are up. Companies like Sigg and Klean Kanteen have grown tremendously over the past few years; Nalgene has experienced slower sales due to the BPA scare. Sigg increased production by more than 90 percent last year and expects it to increase to be about seven million this year (though a recent scandal regarding lack of transparency could change that).
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.
Bottled water companies continue to claim that their competitors are sodas and not tap water, but how can a sugary drink be a substitute for a fundamental life necessity?
The benefits of using reusable water bottles far outweigh the costs. Among these benefits are: energy savings and reduced emissions (processing, packaging, distribution) and reduced waste (less plastic in landfills equals less pollution). Furthermore, tap water saves people lots of money –- bottled water is 1,900 times more expensive than tap water. Also, while it may be more convenient to grab a bottle of single serve water on the run, it is not so difficult to just bring along an aluminum water bottle and fill it when you’re thirsty!
One of the keys to reusable containers is making sure that people refill them. Several innovative organizations are springing up to try to encourage this move to tap water. Many restaurants in progressive cities such as San Francisco, Vancouver and New York simply don’t offer bottled water options any more.
The UNICEF-sponsored TAP Project, encourages restaurant customers to contribute $1 for the tap water they normally receive for free in order to help fund access to sanitary tap water for children around the world. This is very compelling when you find out that $1 can supply a child with clean drinking water for 40 days!
Other innovative initiatives like Refill Revolution — that tracks and records every time someone refills at a water fountain –- and TapIt Water -– a refilling network (complete with an iPhone application) to help people find places to refill in urban areas like New York City -– are helping consumers change their behavior.
Reusable water bottles are a great step in the right direction, but how can bottled water companies fundamentally rethink their business models? I was recently brainstorming with a CSR professional at one of the big bottled water companies and we discussed the possibility of these companies switching their focus to Point-of-Use (POU) filtration instead of bottled water.
Although I don’t know how these bottled water companies can provide new solutions, I was impressed by the fact that this leading company clearly had a strong desire to adapt; I don’t think it suits any of us to be dismissive of large corporations who are trying to redefine the way they do business.
Any suggestions for bottled water companies? Feel free to comment on this post and suggest ways that they might move forward and become a more sustainable business that benefits the triple bottom line. It’s time that we as consumers start taking responsibility for our decisions and put more pressure on these companies. But, we can also offer guidance, so let’s give them some viable alternatives.
For another good article on bottled water, check out this article: Desperate Bottled Water Industry Battles Trend Toward Tap.
You can follow more of my water-related thoughts on Twitter at twitter.com/matthewsavage.