Green Water? The Effort to Produce Ethical Bottled Water
I’m probably the only operator of a bottled water company who would tell you that you should drink tap water—but if you’re going to buy a bottle of water, we want to provide an ethical option.
—Kori Chilibeck, founder of Earth Water1
Ethical bottled water must be the biggest oxymoron of our time.
—Michael Smith, Green (Living) Review
IS THERE A middle ground between an unconstrained bottled water industry and a complete ban on the product, as some activists would like? Some see such a middle ground in attempts to market “ethical” brands of bottled water. Can bottled water be made “ethical?” Several entrepreneurs think so. Their efforts range from attempts of the biggest bottlers to decrease the environmental consequences of their production to commitments on the part of some bottlers to donate some or even all profits from sales to charitable organizations, including those working to provide safe water and sanitation to poor communities.
Because much of the energy and environmental costs of bottled water are tied up in the plastic bottle, some major producers are responding to the growing opposition to bottled water by making changes in their operations and products. As we saw earlier, Nestlé, for example, is moving toward “lightweighting”—reducing the amount of plastic needed to make each bottle—and their newest bottling plants are being built to meet LEED Green Building Council standards. Nestlé recently introduced their “Eco-shape®” bottle, which reduces the weight of their standard PET bottle by around 30 percent. This effort was accompanied by a major publicity blitz; their website proclaims: “Easier to hold, easier to live with” and “A better bottle for you and our environment.”2 Both Coca-Cola and Pepsi Co have also introduced lighter bottles, but their standard bottle is still substantially heavier than Nestlé’s.
Coca-Cola and Pepsi Co have both launched other efforts to address the water implications of some of their beverage activities around the world. Rather than focus on the specific impacts of their bottled water business, they have ramped up efforts to understand how their companies use or abuse water resources and to reduce the consequences of this water use in local communities, clean up or reduce their discharge of wastes into water systems, and improve the transparency of their operations. Coca-Cola, in particular, has moved aggressively to try to clean up their image and their operations after receiving bad publicity in India and elsewhere for their use of water in beverage production. For example, in 2007 they announced that they were going to focus on three aspects of their water impacts by working to improve their water-use efficiency, to treat all water to “a level that supports aquatic life and agriculture,” and most controversially, to become “water neutral” in their overall operations, which they define as replacing the water that is consumed when making their products.3 For example, the company is trying to figure out how to replace in rivers or groundwater the three or four liters of water that are consumed when they make a liter of carbonated soft drink, but they are not, at the moment, addressing the thousands of liters of water that may be required to grow the sugar or corn used in the same one-liter bottle of beverage. In February 2009 Coca-Cola also opened the world’s largest PET bottle-to-bottle recycling plant in Spartanburg, North Carolina—one of the first serious U.S. efforts to boost the amount of recycled PET in beverage bottles.4
A panoply of smaller entrepreneurs sees the large market for bottled water as an opportunity to do something good for the planet. Rather than fiddling around the edges with lighter PET bottles, or improving the water efficiency of bottling plants, some are taking a different approach, looking to new models of production and operation. While it is hard to ascribe motives to these bottlers, most seem to feel that if people are going to buy bottled water, they might as well have the choice of contributing something positive. Most of these bottlers are committing a portion of their profits to good causes and exploring less environmentally damaging packaging options.
Perhaps the most significant attempt to build an ethical brand in bottled water involves Ethos Water—the brainchild of Peter Thum. Ethos was begun by Thum and his friend Jonathan Greenblatt in the classic style of business startups and is now part of the multinational corporation Starbucks. I first met the founders of Ethos in early 2005, after they had started the company and when they were seriously considering moving from a local model to national bottling and distribution. Thum and Greenblatt came to visit me at the Pacific Institute and we talked for several hours about bottled water, ethics, and the environment.
Thum grew up in the upper-middle-class, and, as he describes it, “unreal” surroundings of Southern California, giving little thought to water issues. He went to business school at the Kellogg School of Management at Northwestern University, where he roomed with Greenblatt, his future partner in Ethos Water. In the fall of 2000 Thum was working in England for the McKinsey consulting firm and was sent to South Africa for six months to help reposition the brand of a winery near Capetown. While there he was exposed to the water poverty that afflicts so many people in South Africa, and he became immersed in that country’s intense water debates. There are few countries with more difficult and complex water problems, or more innovative efforts underway to solve them. As Thum told me, he came to realize that “without solving water and sanitation issues, efforts to address all other problems are like building a house on sand.” On his return to England, he was assigned to another project to help a soda and bottled water manufacturer and realized there must be a way to create a beverage brand to take advantage of the fact that more and more consumers were looking for emotional benefits “beyond just satisfying their thirst or convenience.”
By the summer of 2002 Thum had quit his job, written a business plan for Ethos, and moved to New York to pursue his idea for a bottled water company that would enable consumers of bottled water help address the world water crisis. The basic premise was that Ethos could capitalize on the growing market for bottled water as a tool for generating both the funds and the awareness necessary to help meet basic needs for water in developing countries. And this would also provide the brand its differentiation from all of the other waters on the market. By the end of that year, he recruited Green-blatt to join the Ethos effort. In late spring 2003 Thum moved to California where Greenblatt lived with his wife. Thum put together the pieces of the supply chain while Greenblatt worked to raise funds. Thum met with bottlers, found a producer who could make the appealing package they wanted, and selected a water supplier.
Ethos Water was born about 12 weeks after Thum moved to California. As a way to make the brand known, he and Greenblatt sought their first customers in places where celebrities hang out. The original obligation of Ethos was to give 50 percent of their profits to organizations supporting water and sanitation projects in developing countries, which they estimated would be around 1.9 cents per bottle over the projected life of the brand. Thum concluded that a few high-profile customers would help them to launch the brand, and so they introduced their product at the Fred Segel Café on Melrose Avenue in Los Angeles, which advertises “homemade pastas with a side of celebrity sightings.” They quickly expanded to cafés and restaurants up and down high-end Los Angeles. By October 2003 Ethos sales were sufficiently encouraging to convince Greenblatt to quit his job as an executive, work full time on Ethos, and search for outside angel funding to help them expand production. In February 2004 Ethos went as a corporate sponsor to the famous TED (Technology, Entertainment, and Design) conference, where they did what every entrepreneur should do—they schmoozed and pitched. And among the people they pitched were Pam and Pierre Omidyar, the founders of eBay and the philanthropic Omidyar Network.
The Omidyars liked the idea of an ethical bottled water brand and made an equity investment in Ethos that permitted them to grow further and, more important, to pursue Starbucks as an outlet. The thousands of Starbucks cafés and millions of customers could get them over the “scale hurdle” they faced, and in the summer of 2004 they met with Howard Schultz, the chairman and CEO of Starbucks. Schultz was also looking for a socially responsible way to sell bottled water and liked the Ethos brand better than the brand they were currently selling. By April 2005 Greenblatt and Thum had negotiated a deal: Starbucks would buy the fledgling company and sell the water in their stores, committing 5 cents for every bottle sold to nonprofits and agreeing to raise $10 million for water projects by 2010. Thum and Greenblatt took executive positions at Starbucks to help launch the expansion. By the end of 2008 Starbucks had made over $6 million in grant commitments that they claim will help over 420,000 people in Africa, Asia, and Latin America.
The idea of ethical bottled water is spreading. A Canadian company called Earth Water, which began operations in 2004, claims to donate 100 percent of net profits to water programs in developing countries and in 2007 introduced a corn-based biodegradable bottle; the company also works directly with the United Nations High Commissioner for Refugees (UNHCR). Reflecting the apparent contradiction between bottled water and ethical consumerism, Earth Water’s CEO and founder, Kori Chilibeck, noted in August 2007, “This is not a cure-all solution, but we know that if other bottlers follow our lead, it will have a huge impact.”5
Examples of “Ethical” Bottled Water
Frank Water, United Kingdom: Frank Water is a water charity that supports sustainable clean water projects in developing countries. Created by award-winning social entrepreneur, Katie Alcott, Frank Water says it gives 100 percent of its profits to charity. www.frankwater.com/.
One Water and Global Ethics, United Kingdom: In 2005 British entrepreneur Duncan Goose created One Water and Global Ethics, which return all net profits on their bottled water to irrigation and drinking water projects in developing countries, a joint undertaking with PlayPumps International. In 2009 One Water expanded into the United States and Australia. http://www.onedifference.org/water.
Belu Spring Water, United Kingdom: Belu was founded by Reed Paget and colleagues and donates 100 percent of net profits to WaterAid, which distributes it to clean-water projects across Africa and Asia. They also claim to be the United Kingdom’s first carbon-neutral bottled water. The water is available at festivals, some London restaurants, and the Tesco and Waitrose supermarket chains in the U.K. http://www.belu.org/.
Aquaid Ltd., United Kingdom: This company reportedly donates 10 percent of rental income from its water coolers and 35p for every 12- or 19-liter bottle of water sold to various water-development projects in Malawi through Christian Aid and Pump Aid. http://www.aquaid.co.uk/.
Ethos Water, United States: The sale of a bottle of Ethos water at a Starbucks outlet leads to the contribution of 5 cents to water-supply and sanitation projects in developing countries. Starbucks has set a goal of providing at least $10 million by 2010 for such projects.www.ethoswater.com/.
Earth Water International, Canada: Earth Water International’s mandate is to give 100 percent of net profits to the UNHCR (the United Nations Refugee Agency) to provide clean drinking water to millions of refugees around the world. http://www.earth-water.org/.
Thirsty Planet, United Kingdom: A brand of bottled water that raises money for the provision of clean water in Africa. A portion of the profit from each bottle is given to the charity Pump Aid.www.thirsty-planet.com/.
Athena Bottled Water, United States: This small bottler produces bottled water in order to raise funds to battle breast cancer. One hundred percent of the net profits from the purchase of Athena water are devoted to finding a cure. http://www.athenapartners.org/.
Nika Bottled Water, United States: Nika directs 100 percent of its profits to help meet water and sanitation needs in impoverished countries. The company derives its name from a Zulu word meaning “to give.” http://www.nikawater.org/.
In Great Britain, a socially conscious businessman, Reed Paget, set up a company that uses glass and corn-based biodegradable bottles to package Shropshire spring water from northwestern England. The product—Belu Natural Mineral Water—was first marketed in 2004. Paget’s website says that 100 percent of the profits go to water projects in developing countries, with their first project in Tamil Nadu, India. In 2008 they claimed to be the United Kingdom’s first “carbon-neutral bottled water.”6
Another Englishman, Duncan Goose, founded a nonprofit corporation called Global Ethics and a bottled water company called One Water, which returns all net profits to irrigation and drinking water projects in developing countries. Goose was born and raised in Edinburgh and worked for several years in marketing and consulting before making money selling a firm he helped create. With the profits from that, Goose traveled around the world and saw firsthand the challenges of poverty and the role that safe and clean water play in improving people’s quality of life. On returning to England, Goose created One Water, which now has production lines in Britain, Ireland, South Africa, Malaysia, Australia, and the United States. In 2007 the company reported that profits of over £260,000 were used to build water pumps in African communities; by late 2008 over £1.4 million had been raised. In May 2007 Goose was named a “Great Briton” and was recognized for his work by the Queen in a ceremony alongside Helen Mirren, Geri Halliwell, and David Beckham.7 In November 2008 Goose was named Credit Suisse Entrepreneur of the Year at the National Business Awards.8
The campaign against bottled water has added some unusual commercial twists too. In 2005, an organization in the Netherlands began offering Neau (pronounced “no” in Dutch) water bottles in a public campaign against commercial mineral waters. “Take Neau for an answer,” the campaign ads proclaimed, and “Neau thirst.” The bottle is designed to be refilled at taps, while profits from the sales of Neau water bottles are sent to water projects in developing countries.9
Critics may chafe at the apparent contradiction of selling bottled water under an ethical moniker. Some see efforts to market “green” bottled water as simply greenwashing—an attempt to do ethically or environmentally what shouldn’t be done at all. Fiji Water’s efforts to position themselves as the most environmentally responsible bottled water prompted the American Public Media’s Greenwash Brigade to award them a top 2008 Greenwash prize, noting the massive energy cost required to transport Fiji water to market, the evils of producing and disposing of plastics, and problems with the company’s claim of “carbon neutrality.”10
Some groups argue for banning bottled water or restricting sales in certain markets, or even eliminating bottled water completely.11 If the complete elimination of bottled water were desirable and achievable, such an ideologically pure position might be supportable. But in the meantime, I think that even a modest expansion of hitherto inadequate efforts to help meet basic human needs for water, supported by the intentional or unintentional contributions of millions of bottled water consumers, has some merit, if efforts to produce an “ethical” bottled water are not simply greenwashing. Indeed, if each of the over 30 billion liters of bottled water sold in the United States in 2008 contributed the same 5 cents to water projects in needy regions that Ethos Water contributes, over $1.5 billion would have been raised. This would be a huge amount of money for safe water projects—far more than the entire annual U.S. foreign aid budget for water and sanitation worldwide. Spent effectively, this money could go a long way toward preventing bottled water use in developing countries by providing a safe, cheap, equitable alternative for the world’s poorest people. If bottled water isn’t going to disappear, then maybe the biggest problem with ethical bottled water is that there isn’t more of it.