Behind The Scenes

Bottled Waters: Flooding the Market

Slammed by environmentalists and hammered by the economy, Big Water is inventing strategies to sell the bottle. But new packaging and fancy flavorings can’t disguise the product’s wastefulness.

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Bottled water is trying to go green, and we’re not talking about food coloring. Stung by criticisms that they hurt the environment, bottled-water companies are bombarding you with recycled packaging, carbon offsets, biodegradable bottles and exotic enhancements in an effort to reverse declining sales.

And no wonder. After expanding at nearly 10 percent a year throughout the past decade—to nearly $12 billion in 2007—bottled-water sales fell by 3.3 percent in 2008. That was the first drop since Perrier hit U.S. shores 30 years ago.

Some premium brands have fared worse. Coca-Cola slashed prices of its Dasani water by 40 percent in the past 3 years, but sales slipped 4 percent in 2008. Pepsi cut the price of Aquafina by 11 percent over the same period, yet sales plummeted 11 percent in 2008. Of the major companies, only Nestlé posted gains (of 3 percent), which were driven by the bargain PureLife brand, according to consumer-research company Mintel.

So, what happened? Well, the economy tanked, for one. Consumers balk at paying up to $2 a bottle for water when they can turn on the tap for free. And for another, studies show that bottled water is no safer than tap water. (Some brands, in fact, use refiltered tap water.) A July report by Environmental Working Group found chemicals and bacteria above legal limits in 10 brands of bottled water. Another report by the group found that only 2 of 188 brands included information about their source, their purification methods and the results of their contaminant tests.

Bottled-water critics also decry the wastefulness of plastic bottles. Manufacturing bottles for U.S. consumption burns 17 million gallons of oil each year, which is the equivalent of filling each bottle a third-full of oil, according to Pacific Institute, which is an environmental research group.

Consequently, since the spring of 2007, more than 60 cities have banned bottled water from city functions and offices. In addition, communities from Maine to California have accused Nestlé of depleting their groundwater to fill hundreds of thousands of bottles a day.

According to a Mintel survey, 35 percent of nonbottled-water drinkers drink from the tap because of environmental concerns. Sixteen percent of bottled-water users drank less bottled water this past year because of concerns about plastic waste.

“Consumers are going to become more aware of these issues,” says Mintel analyst Garima Goel Lal.

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Although a few companies’ efforts are somewhat notable, many of their claims are exaggerated after you read the fine print. And a few amount to out-and-out greenwashing.

LET THERE BE LIGHT. The industry’s top brands are spearheading the environmental rebranding of bottled water, and the biggest issue is the amount of plastic that is used by the industry.

No one can deny that bottled water has been responsible for the increase in the number of PET (polyethylene terephthalate) bottles that are in the market. Some 36 billion bottled-water bottles were sold in 2006 (the latest year for which data are available), which is triple the amount from 2000 and more than half of the 60 billion PET beverage bottles that were sold the same year. Water bottles are one of the least recycled consumer products, with rates of less than 25 percent.

Companies say they can’t use fewer bottles, but they can use less plastic. Nearly all of the major brands have claimed to “lightweight” their products. Nestlé, which owns more than 30 percent of the market under a number of brands—from Calistoga to Poland Springs—says it has produced the lightest bottles. Its half-liter Eco-Shape bottle was rolled out in April 2007 for all brands at 12.6 grams and cut to 10.5 grams last November. (The average half-liter bottle weighs about 17 grams.) The company claims that it has used 195 million pounds less of plastic since the bottle’s introduction.

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