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Nestlé Waters’ Hit and Miss
There is a great deal at stake in the bottled water business. Perhaps Nestlé Waters North America knows this better than anybody. The company presently controls approximately 41 percent of the $11.7 billion US bottled water market. Like every other competitor in the space, it faces shrinking category sales, as well as mounting pressure from groups complaining about the toll that water corporations take on the planet.
Bottled water activists point to plastic waste, energy consumption, greenhouse gas emissions, the environmental effects of water extraction, water privatization issues and a range of social problems generated by the industry. Could such “road blocks” deter long-term growth for corporate bottled water empires? Nestlé thinks not.
According to a 2009 document entitled “The Future of Bottled Water” authored by Nestlé CEO Kim Jeffery, the company’s broad portfolio of bottled water products, including Poland Spring, Perrier, Arrowhead, Deer Park and Zephyrhills, are well-positioned to recover from the present economic slump. “Bottled water is perfect as it is,” the company says. “[There are] limited opportunities to innovate.”
This company is clearly not of a world-changing mindset. Nestlé takes the position that the bottled water industry is unfairly portrayed as a “villain” by environmental activists and an angry public, and that “environmental facts do not support this.” Really, Nestlé?
In a press release and video web site launched last week, Nestlé attempted to express to the public the environmental virtues of bottled water. “Bottled water is actually the most efficient choice of any packaged beverage available to consumers,” the company insists. “Bottled water is a very small user of our water resources...Plastic represents less than one percent of solid waste. While water bottles can be recycled, not all Americans have access to curbside recycling...To sum it all up, bottled water is a healthful choice, can cost less than 20 cents per bottle, and has a lighter environmental impact.”
Of course, not everyone sees things through the corporation’s rose colored lens. Take the 5,400 local citizens of Salida, Colorado who recently banded together in order to fight Nestlé off and protect its local water resources and land. Or what about the residents of McCould, California, who claim their town was torn apart by Nestlé’s operations in the area? Nestlé makes no mention of such stakeholder concerns in its press release or video web site, both which set forth to “set the record straight.”
Nestlé has a public relations problem. The problem isn’t just that Americans around the country are hanging signs in their windows and entryways reading: “Stop Nestlé” or “Nest-Leave.” Nestle’s public relations problem is its sterile, detached response. The company seems to be under the impression that people will read its communications in an isolation chamber, devoid of context, clue, cultural condition, and (yes, Nestlé) fact.
Let’s start with the hard data. According to Food and Water Watch, bottled water produces up to 1.5 million tons of plastic waste per year. That plastic requires up to 47 million gallons of oil annually to produce. And while the plastic used to bottle beverages is of high quality and is demand by recyclers, over 80 percent of plastic bottles end up in land fills. That’s why the Pacific Rim Garbage Patch, the floating vortex of waste that’s twice the size of Texas, is comprised mainly of plastic. It’s also why so many sea creatures die every day from ingesting plastic, and why plastic waste has become one of the chief concerns of our Nation’s top environmental groups.
On the cost side of things, consumers pay a huge markup on a product even though as much as 40 percent of it comes from a tap in the first place. Stakeholder communities also pay. Food and Water Watch says Nestlé has an unfortunate reputation for moving into communities, taking water for next to nothing, selling it for a hefty profit, then leaving the locals to deal with the residual environmental and social externalities, and moving on. “Next!”
None of these issues are substantively addressed in Nestlé’s press release or on its video website. Through bullet points, select interviews and clip art snippets, the company only superficially confronts the environmental impacts of bottled water. Nestlé avoids all controversial content, including details related to ongoing rifts with local communities around the country. The company’s corporate tone of voice, detached message and superficial approach to “issues outreach” demonstrates an indifference to the wider public’s ardent support for environmental reform and social justice. The pitch is all wrong.
Nestlé broke every cardinal rule in social media, stakeholder engagement and transparency with it’s one-sided, “set the record straight” public relations effort. There is no meaningful opportunity to interact with the company, no way to leave a comment. My bet is, the only folks convinced by Nestle’s “bottled water is good” message will be those who manufactured it.
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- Case in Point
- Topics: Marketing & Messaging, communities, planet
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| jim on 03 Nov 2009 |
1) Sorry for the tome below.2) How do you create a paragraph break?3) The Zephyrhills recycling manager actually locked the dumpster. If you want to throw something away, rather than recycle, you have to come see him for the key. |
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| jim on 03 Nov 2009 |
Honestly, I don't know enough about the Fiji situation to make an informed comment (and probably shouldn't have!). My only point there was that whether or not the Fijians sell bottled water isn't going to make a difference to people in, say, southern India. (But the article didn't say it would, either. So, my bad.)Water is renewable in the sense that watersheds are designed by nature to replenish themselves through rainfall and snow melt. Water is naturally filtered through layers of sand, gravel and limestone and fills the aquifers like sponges. Springs exist where pressure forces the water to the surface. In most cases, where you have a spring system you have a stream or river that eventually flows into the sea. Water is evaporated, rain falls and the cycle begins again. UNLESS humans take too much out of the cycle.Springs are threatened when their recharge areas are overdeveloped. (Recharge areas can encompass hundreds of square miles of area where the rainfall seeps into the aquifer.) To adequately protect a spring, you have to monitor what goes on in that area. If you permit too much development -- like Florida does routinely -- then you risk taking more of the resource than can be replaced by nature. If you stop in time, the damage can be undone. But, if you continue doing that, then the negative pressure in the aquifer will draw in salt water. That situation might take generations to fix.Droughts are cyclical, sustained periods of lower-than-average rainfall that nature can withstand if left alone. The problem is that droughts force farmers to irrigate their crops and homeowners to water their lawns much more than they might otherwise. The result is, if you're not careful, more withdrawals at the same time there is less recharge. That's why you'll frequently see lawn watering and car washing restrictions during droughts. These are not considered critical water uses.The watchword for Nestle is sustainability. When we select a spring site, we look at years and years of data about its flows and levels. We study the natural systems the spring supports, both at the spring pool and downstream. And we look at the recharge area and nearby water uses. Only if the source is far more than adequate to support those systems, do we even begin testing for quality and all the other things that factor into final site selection. If it meets all of these qualifications, then we might begin the permitting process, where water managers decide whether we are correct in our assessments.As an example of this, one of our plants is near Blue Spring in Madison County, Florida. The spring discharges about 70 million gallons of water every day. That water flows about 100 feet or so into a river that meets the Suwannee and flows into the Gulf of Mexico. We are permitted to use a maximum of 1.4 million gallons of that water per day, though our actual use is far less. We, and the water management district, continuously monitor the spring flow. We conduct periodic studies of the flora and fauna nearby. And we measure the impact on river levels with and without our withdrawals.Scarcity issues arise globally for the same reason we have water supply issues in Florida: Too many people trying to live in areas without the resources to support them. It's just that simple. Here. we've allowed overgrowth in South and Central Florida without accounting for where we would find the water to support them. Pinellas County (St. Petersburg) is Florida's most densely populated county -- with no native water sources. Pinellas gets most of its water from neighboring Pasco County. Between the two counties, they nearly drained the once-vast Green Swamp. (The book, Water Wars, by Dr. Honey Rand is an excellent history of the legislative fights that resulted.)Instead of learning from our mistakes, I'm sorry to report that there is a move afoot in Florida to pipe water out of North Florida to our neighbors in the southern part of the state. Stoooopid idea. In the third world, you see the same scenario playing out, but it's mostly because of natural population growth and poor agricultural practices, rather than dumb-ass growth management decisions. I guess my point is that scarcity is a region-by-region problem. The world, per se, will never run out of water. Some places will always have far more than they can ever use. Others will never have enough. Without sound management practices, we can absolutely destroy ecosystems and cause areas of our world to become uninhabitable.So, what's the solution? First it's understanding what our water supply can support while sustaining the natural systems that support us. Then, it's managing so that we don't take more than that. As second and third world countries develop, their people need and deserve access to good, clean water. But, equally important, they need sound water management policies in place to prevent even more problems on a larger scale.Where do water bottlers fit in to this? Again, I go back a few key points. One is that bottled water is used for human consumption, not for washing cars, watering lawns or filling swimming pools. It is simply an alternative to sodas, sports drinks, teas and such (which also are mostly water and mostly also sold in plastic bottles.) The amount we use is insignificant compared to municipal supplies. In Florida, Nestle Waters uses a total of about 2.5 million gallons of water per day and provides almost 1,000 jobs. These pay an average salary of $41,000 per year and all include health and dental insurance, 401K and profit-sharing plans, as well as training and the opportunity for advancement nationwide. |
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| christinearena on 03 Nov 2009 |
Your Zephyrhills facility recycles more than 90 percent of the (non-product) materials that come through the door? That's great. Please keep going. The Mother Jones article http://bit.ly/3oXyxs draws a meaningful connection between water company activities and local community access to clean water for drinking and bathing in certain areas. I hate to be skeptical, but I have a tremendously hard time believing that Fiji Water's current public relations malaise is based solely on, as you say, "a fundamental misunderstanding about water generally." Perhaps, at best, this misunderstanding is a two-way street? Would be great if water companies let down their guard and let people see the agenda, the humanity and the reality behind the scenes. With respect to Nestle, I do see that the supply required for bottling in the US is very small compared with overall water usage. A few questions: How exactly is water a "renewable resource?" I thought water conservation was of utmost importance. Aren't we dealing with scarcity and drought issues Nation-wide and globally? And won't these problems worsen as the planet warms? |
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| jim on 02 Nov 2009 |
The Public Citizen piece you cited, as well as the Mother Jones article, bear further discussion. (We already talked about the North Pacific Gyre.)Public Citizen discusses the fact that people in the world deserve access to clean water for drinking and bathing. We share that point of view. However, the logical leap there is that Nestle and other companies are keeping them from having it. Sorry, but I don't think those two issues are connected in a meaningful way. Look at the sheer amount of water we bottle vs. the amount necessary for a public supply. Take bottled water out of the equation completely. That still doesn't do anything toward getting decent municipal supplies to people who need it. (It does, however, prevent some people from drinking clean water.) If they are suggesting that a bottled water company somewhere is drying up a water supply, then they should identify the company and the area.The Fiji article raises questions about the company, but not Nestle Waters. The implication is that these poor people in the islands are either a) stupid, b) on the make or c) both. I don't think I buy that argument. On the other hand, I don't anything about Fiji Water or the company that produces it. The common theme I see here is a fundamental misunderstanding about water generally. Used properly, it is a renewable resource. Aquifers recharge if they aren't drawn down to the point of saltwater intrusion. And there are ways to measure that and make sure it doesn't happen. At Nestle, we like to point out that we don't build $100 million plants on wheels. It would be incredibly dumb to tap a water source that might run out.Bottled water is produced in quantities that are far too small to be used as a municipal water source. All the bottled water companies in the world, combined, couldn't provide enough water to meet the needs of even one large city.There are private utility companies out that provide water. We're not them and they are not us. Finally, you can't easily or profitably move bulk water supplies from one area to another. In other words, a water-rich area like the Great Lakes can't feasibly provide water to Ethiopia. Moving water incurs a cost (which accounts for the retail prices of bottled water), so conserving water in your city or town is a terrific idea for your city or town. But it does nothing to help people in other parts of the world. |
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| jim on 02 Nov 2009 |
My apologies for sounding like a ranter myself. It was unfair of me to imply that it was not well researched. It was. And it was well presented.Here's the problem: There is a ton of misinformation out there about the company and much of it is being disseminated by people who absolutely know better. Privatization is a prime example. We produce a packed beverage product just like Coke and Pepsi and milk and orange juice. We just don't add sugar or other stuff to it. (Which is what Kim meant by "perfect as it is.") We are not and never will be a private water utility, which I understand is the concern over privatization. If we're privatizing water, then so is every business that uses it. I don't see any moral difference between using water for bottled water or using it for making Gatorade. (Except that it takes far less water to produce our product than others.)The question is, how do you defend yourself against people who are bent on portraying you as a villain? What is the response to someone who says we are taking all the water? All you can do is present people with factual information. But if people who have an agenda keep spreading falsehoods, you find yourself constantly trying to get the truth out.We're perfectly willing to sit down with our critics. In fact, we have had people doing that for years. We answer their questions, provide sound, science-based answers and ask for input. But it doesn't seem to matter. After nine years, I keep seeing the same falsehoods popping up over and over again.What are these mysterious questions about our operations and plans for the future? Nestle Waters is a business. We would like to grow in size, market share and profitability. That's part is simple. But in addition to that, we are also trying to grow in a way that is responsible and sustainable over the long term. In that regard, I'll put NWNA up against anybody.We are working toward long-term solutions in packaging and energy use. (Across all brands and plants.) We were among the first food and beverage companies to adopt green-building guidelines and now we have more green-building space under roof than any company in America. Our Zephyrhills facility recycles more than 90 percent of the (non-product) materials that come through the door. And, in the communities where we operate, most people agree that we are a positive influence. But when they speak on our behalf, the critics say those are just dumb yokels who don't get it. In terms of plastic waste, energy consumption, water extraction and the other issues, we have addressed them head on in a number of forums thousands of times. We answer our critics and try to engage them, but again, some just don't want to hear it. There's no honest broker we can turn to.I welcome any advice you have in this regard because, frankly, I'm thoroughly frustrated. I also welcome any questions you have about our operations, intentions or anything else. Apparently, you and others see some veil of mystery or secrecy that I don't.And thanks for the dialog. I sincerely want to learn if there is something we need to be doing that we're not. Please, raise any issue you'd like and I'll answer it as well as I can. And if I can't, I'll find someone who can. |
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| christinearena on 02 Nov 2009 |
Hello Jim, and thank you for your response to my post. First and foremost, please re-read my post. I am not simply “criticizing the operations and ethics” of Nestle corporation, nor is this a baseless “rant.” My central point is that Nestle has rich history in the United States. There is a critical mass of stakeholders around the country – citizens, research organizations, non profits and public interest groups – who are very angry at Nestle, right now. (See my numerous links to these groups and individuals. As you know, much media attention continues to be given to them). Given the strong public sentiment and outcry related to the company’s environmental and social impact on communities, it is my belief that Nestle’s current public relations campaign is off base. It doesn’t fit with the climate, so to speak. The campaign talks around the most contentious issues that it is facing with respect to plastic waste , energy consumption, greenhouse gas emissions, the environmental effects of water extraction, water privatization issues and a range of social problems, rather than dealing with these issues head on. That is what I am critical of. Where are the voices of critics? Where are the opportunities for stakeholders to engage? Where are the company’s admissions of its own shortcomings and goals for the future? These are the issues a transparent market demands. I appreciate that Nestle has done a laudable job improving its environmental performance. For instance the Poland Spring “eco” bottle design does cut down on plastic waste, and saves the company some money. You mention a range of other areas where the company provides a legitimate value, both socially and environmentally. But equally, stakeholders are interested to know about the company’s agenda and larger ambitions: Where is the company going, and what are its intentions for the future? Along these lines, Nestle leaves people guessing. The Power Point document I found (and linked to) online cited sales growth goals, and previous environmental improvements, but projects no future environmental innovation ambitions. The statement that “Bottled water is perfect as it is, there are limited opportunities to innovate,” left me wondering: Does the company believe that environmental innovation is a mission-critical priority – or not? According to recent data, most people now perceive environmental issues to be a top business priority. Most people are truly motivated to do something about issues they perceive to be quite dire. Seriously, Jim. You can call me a “Rant” for wondering all this out loud, but I know from comments floating around on Twitter and cyberspace that others are wondering, too. |
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| jim on 02 Nov 2009 |
Christine, I'm a consultant for Nestle Waters in Florida and I certainly respect your viewpoint above. However, your column itself is an example of the challenges we have. I'm pretty sure you know that water bottles contribute only a fraction to the ecological nightmare that is the North Pacific Gyre. Laying that at the feet of Nestle Water is like blaming global warming on burping bears. Yes, plastic bottles do require petroleum and they do contribute to the problem, but come on, so does every other plastic product on the market. Why single out one company in one industry?By reading our materials, I hope you saw that Nestle has reduced by 30 percent the amount of plastic in our bottles. We're not dodging responsibility for our carbon footprint; we've actually measured it and we're actively trying to reduce it through a number of different initiatives. We're not looking for wet kisses from the environmental community for this, but we don't deserve a slap in the face either. I appreciate that you pointed out our bottles are recyclable. Would you agree the solution here is as much policy (curbside recycling) and behavioral change (education) as anything we can do in our plants? By the way, we support those efforts and actively contribute to them. Again, we don't expect a standing ovation. We just hope folks realize that the problem is bigger than a single industry segment. And yes, some bottled water is "just tap water" . . . in the sense that both are basically H2O. But some folks don't like chlorine, chloramine, sulfur or pipe rust in their water, so they buy choose purified drinking water that has been filtered and UV disinfected. Some just like the taste of spring water because of its mineral content and flavor. Others just don't feel like drinking a Coke or Gatorade or some other beverage when they're away from home. And still others, like those of us in Florida, see our municipal systems go down from time to time. If you've ever lived through an Ivan or a Katrina, then you know what a wonderful sight those plastic bottles can be. In terms of water use, my only response is that you need to take a look at our actual consumptive use. We operate two plants in Florida and use about as much water as a large golf course. Less than some single dairy farms. (Read Cynthia Barnett's book, "Mirage," if you're truly interested in fresh water conservation.) Bottled water ain't the problem; over-development is.As far as our transparency and community relations, I challenge you to look at our actions in McCloud (the community meetings, the commitments to testing, the number of suggestions we incorporated) and then say we weren't transparent. The truth is that there are a lot of people in McCloud who are very upset that we pulled out. You ought to also look at our operations in rural Madison County, Florida and see what people there think about Nestle. I could go on here, but my point is this: If we don't put out objective, factual information about what we do, then we are at the mercy of people who put out misleading, overstated and flat-out false statements about our company. We can always improve the ways in which we do that and I appreciate any suggestions you have in that regard. (Given your company's focus, I think that would be a much more informative column.) But to simply criticize our operations and ethics -- and then question why we defend them -- seems like just another rant.I look forward to your response and I'm happy to answer any questions you have. |
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Julie Nelson 