Selling Water by the River: The Bottled Water Controversy

Our Case for bottled water

Mark HoyneChris JohnsonRuss Kurhajetz

Tony LarsonFred Lewis

Agenda• History• Global Market• Economics• Safety• Personal Choice

Bottled Water is not a product of the late 70’s early 80’s.

• 18th Century– Jackson’s Spa in Boston began bottling

and selling water• 19th Century– New development in mass production of

bottles– Growing number wanted their water to be

clean and stylish– Status played a big role in early success

History

• 20th Century– Bottled water went out of style when

chlorination of water was introduced

• WWI… Great Depression… WWII– Healthy, free, water sources were

abundant

• 1977– $5 million marketing campaign by Perrier

History

• 1977 - Perrier– Discovered American concern about safety of

water supply• Inconsistent regulation and oversight by U.S.

government– Drinking their product became a defining life

style choice– With Perrier’s success came competition

• 2003– Second largest commercial beverage category

History

Global Market• Bottled water is a commodity in a global market

place.– Developed countries

• United States• Canada• Switzerland• Germany• France• Spain

– Developing countries• Mexico• Thailand• Indonesia• Brazil

Global Market• Bottled water’s largest producers

reside in Europe– Nestle (Switzerland) – Danone (France)

• Europeans consume more bottled water than Americans each year

Global Consumption

Global Consumption

Worldwide Economics • 50 Billion Gallons Sold Annually World-Wide• Approximately $100 Billion Industry• Consumption was about 21 Billion Gallons -

1997• Consumption Predicted to be 68 Billion Gallons

by 2013• Developing Countries Lead Consumption

Growth• (per Frontline and Australian Food News)

National Economics• US Bottled Water Companies Employ 163,000

Jobs • Paying Wages of $7 Billion Annually • 9 Billion Gallons Sold per Year - 1st • Total Economic Impact of about $130 billion• Federal Government Collects over $7.6

Billion in Taxes (per IBWA and NY Times)

Minnesota Economics• MN Bottled Water Companies Employ 3,000 Jobs

• Paying Wages of $138 Million Annually • Total Economic Impact of about $2.4 billion • State Government Collects about $120 million in

Taxes • (per IBWA)

Local Economics• MN 8th District Bottled Water Companies Employ

about 260 Jobs

• Paying Wages of nearly $10 Million Annually • Approximately 1,400 ripple effect jobs

• Total Economic Impact of about $192 million • (per IBWA)

The American Society of Civil Engineers recently gave America’s drinking-water systems a grade of…

 

Roughly 10 BILLIONGallons of sewage seeps into these crumbling pipeseach year.

The Obama administration has secured $6 billion for improvements, but the EPA assessed the cost at

Safety & Environment

D-

$335,000,000,000

Safety & Environment• CDC recommends every household have an Emergency

Preparedness and Response Kit including water for all family members and pets

• Bottled water is comprehensively and stringently regulated and must meet the FDA’s food regulations as well as standards for:– Identity– Quality– Good manufacturing practices– Labeling

• Federal law requires that the FDA regulations for bottled water be as protective of the public health as the Environmental Protection Agency (EPA) standards for tap water.

Safety & Environment• All plastic food and beverage containers must meet or

exceed all FDA requirements.

• The FDA clearance process includes stringent requirements for estimating the levels at which such materials may transfer to the diet.

• Safety criteria require extensive toxicity testing for any substance that may be ingested at more than negligible levels.

Safety & Environment• Packaging is 100% recyclable. • Continuing to create lighter weight bottles

and are using recycled material in their packaging.

• Bottled water is just one of thousands of consumer goods that are packaged in plastic containers .

• Bottled water containers make up only 0.3 percent of the entire municipal waste stream in the United States.

Personal Choice• It's NOT a bottled water versus tap water issue. • Drinking water is a good thing, whether from the

tap or the bottle. • Bottled water competes with other beverages in

bottles - such as:– Carbonated sodas– Juices– Teas

• Over 30% of Americans are considered overweight/obese, would you rather they bought a bottle of water or can of soda (NPR)?

Personal Choice• Laws require bottled water advertising, labeling,

and marketing to be truthful and not misleading. • Bottled water advertising is aimed at informing

consumers about the positive attributes of this safe, healthy, convenient beverage product.

• The bottled water industry spends a very small amount on marketing and advertising, just $52 million collectively in 2006, compared to the $637 million spent on advertising for carbonated soft drinks and the $1 billion spent to advertise beer.

Personal Choice• Tap Water –

Process through source, treatment and distribution delivers drinking water to the consumer which in most cases includes a chlorine residual. The quality of the tap water depends mainly on factors outside the consumer’s control

• Bottled Water – A safe and healthful alternative to other beverages and

is delivered in individually sealed bottles to the consumer. Consumers can choose between different package sizes and different products to select the product that best fits their needs. Bottled water is clearly labeled

Personal ChoiceIs tap water cheaper? Absolutely, but it doesn't

come in a container you can take anywhere and then dispose of when you are done.

For many people keeping track of a container is - quite frankly - a drag.

Over time, reusable plastic water bottles occasionally develop unpleasant odors and/or tastes.

How often do you wash your reusable plastic/metal water container?

Conclusion• We aren't paying $1.50 for the water – we are paying

$1.50 for the convenience of being able to drink a healthy beverage and then dispose of the container.

• Bottled Water and tap water can coexist, this doesn’t have to be a zero sum game.– Each has benefits and consumers should be allowed to

choose.• There are scenarios where bottled water is the only

option such as– Portability is required:

• Disaster Recovery/Relief efforts• Armed forces

– Other sources are undrinkable

Referenceshttp://www.infrastructurereportcard.org/fact-sheet/drinking-waterIBWANY TimesFrontline Australian Food NewsBeverage Marketing AssociationNPR

Videos/ArticlesTap Water:http://www.youtube.com/watch?v=QJWCPhbfDvkhttp://www.youtube.com/watch?v=-zKXxLkm7I8&NR=1http://www.youtube.com/watch?v=SOCWYrSDYvo&NR=1http://www.youtube.com/watch?v=Fp1JvSpshkM&feature=relatedhttp://www.youtube.com/watch?v=N3k9CBYsRtA&feature=relatedhttp://www.youtube.com/watch?v=5iL3xRoLzmM&feature=relatedhttp://www.youtube.com/watch?v=lq_xC9DmOQEhttp://www.youtube.com/watch?v=Dq1ES9hhJ78http://www.youtube.com/watch?v=G-dGdE4Rebs&feature=relatedhttp://www.youtube.com/watch?v=wwogQWLEqW8

Canadian Pidgeon Droppings:http://www.allheadlinenews.com/articles/7019738181?Pigeon%20Droppings%20Cause%20Of%20White%20Rock%20Water%20Contamination

Bayfield contaminationhttp://www.cityofbayfield.com/Bayfield's%20Water%209-29-09.pdf

Dr. Strangelove – Water:http://www.youtube.com/watch?v=iYTiIvgugmQ