Global Campaigns News

US: A drought for bottled water

Lower Hudson Journal news. By Jay Loomis -

When Amy Land gets thirsty on hot summer day, she is far more likely to turn on a faucet and fill a glass with tap water.

The alternative, bottled water, has become decidedly less popular in her household.

The Larchmont mother of three said that her family has cut consumption of bottled water from 20 to 30 bottles per week to only five bottles per week. To Land, the old bill of $40 to $50 a month for bottled water seemed too high at a time when the economy is slowing, budgets are tightening and gasoline prices are rising. She also worried about the environmental impact of the plastic water bottles and the potential health impact of plastic chemicals on her children.

"I felt like I don't always do everything I can to help the environment, and this was one thing that I could do," said Land, 44.

Fewer purchases by consumers like Land are added pressures in a challenging year for the beverage industry that sells about $15 billion of bottled water a year.

"The beverage industry has experienced slower growth across the board in most categories because of the challenging economy this year," said John Sicher, editor and publisher of Beverage Digest, an industry trade publication in Bedford Hills. "In the case of bottled water, some consumers may have shifted back to tap water."

PepsiCo Inc., the Purchase-based beverage giant, announced this week that sales of unflavored water fell by double-digit rates in North America during the second quarter. Other beverage categories also were weak, including soft drinks and juices. Total beverage volumes for the company fell 3 percent in North America.

"North American beverages faced a perfect storm with declining category volumes, rising inflation ... and the slowing growth in unflavored water," Massimo F. d'Amore, chief executive officer of PepsiCo Americas Beverages, said during an earnings conference call.

On the same conference call, PepsiCo CEO Indra K. Nooyi said the company has been puzzled by the weakness in the non-carbonated beverage categories.

"That's a big mystery and we don't have the answers yet ... but really the last 30 years, if you had tracked this category, the category has never been in such decline as it is now," Nooyi said. "And the last 10 or 15 years, we haven't had an economic slowdown of the kind we are seeing now. "

Slower drink sales also contributed to a 23 percent drop in the second-quarter profits at rival Coca-Cola Co.

In addition to the economic pressures, the bottled water industry also faces increasing attacks from activists challenging the environmental impact of the product.

Eric Yaverbaum of Larchmont, the co-founder of Tappening.com, a Web site critical of the bottled water industry, has appeared on television at least 20 times. He said that it takes 17 million barrels of oil a year to make the 28 billion plastic bottles of water that are purchased in the United States. That is enough energy consumption to fuel 1 million cars for a year, and pump 2.5 million tons of carbon dioxide into the air, contributing to global warming, he added. Many of the bottles also end up in landfills or as litter along highways.

"Our grandchildren might be living on a planet that is in danger from global warming," Yaverbaum said. "We are running out of time to do something. Everyone needs to take the small steps to make sure this planet is around for years to come."

Yaverbaum said that he has been called a "tree-hugging environmentalist" but "I look at this issue as a way to make a difference. ... Bottled water has its place, but not nearly in the volumes that people in this country purchase it now."

The backlash against bottled water also has extended to some famous chefs who have shifted to tap water in preparing their dishes. In addition, at a June meeting of the U.S. Conference of Mayors, a majority of about 250 mayors voted to stop using bottled water at city functions.

Critics have questioned industry claims that bottled water is superior to tap water.

Forty percent of bottled water brands originates from the same source as public tap water though these brands are sold back to the public at thousands of times the cost, according to the Think Outside the Bottle Campaign. The goal of the campaign, coordinated by Boston-based Corporate Accountability International, is to encourage consumers to choose tap over bottled water.

"Time and time again, we have seen that people can't tell the difference between tap and bottled water (in taste tests)," said Gigi Kellett, national director of the Think Outside the Bottle Campaign.

For years, bottled water has been one of the biggest success stories in the beverage industry with companies reporting steady sales growth. In 2007, the industry sold 3 billion cases of bottled water, a 14 percent increase over 2006, according to Beverage Digest. PepsiCo's Aquafina water brand is the biggest player in the product category, with a market share of 13.4 percent.

PepsiCo referred a Journal News reporter inquiring about bottled water issues to the American Beverage Association, an industry trade group.

Craig Stevens, a spokesman for the association, said that the criticism against the industry is unfounded.

"We make a product that people want," Stevens said. "On a day like today that is hot, people want the option to drink pure, portable and refreshing water wherever they go. That is an option that bottled water gives."

As for the environmental issues, Stevens said the critics are engaging in "sound bite environmentalism." He added that the plastic bottles are easily recyclable into products that include carpeting, shirts, ski jackets and more bottles.

"We encourage all users to recycle the bottles," Stevens said.

Despite the recent slower sales in a weaker economy, industry analysts said it would be a mistake to write the obituary for bottled water.

"We expect that bottled water will remain a very big category," said Sicher of Beverage Digest.

Many consumers were sipping bottled water with the temperature near 90 degrees one afternoon early this week outside the White Plains Mall.

On a typical day, Kate Carlisle of Harrison drinks two one-liter bottles of water. She pays about 79 cents per bottle at an area supermarket.

"It is convenient and healthy, especially when it is so hot," said Carlisle, who works in medical research. "It is a win-win."