Until three years ago, Nestlé’s bottled water business was booming. It boasted best-selling brands in Pure Life, Poland Springs and Perrier. Its San Pellegrino was the poster bottle for the health conscious. Americans per-capita thirst for bottled water was increasing, with average consumption growing from 16 gallons in 2000 to 29 gallons in 2007.
But the tides turned. Environmentalists began charging that water producers were misleading people about the benefits of bottled water versus tap, and started criticizing companies like Nestlé’s for the carbon footprint produced by the large amounts of energy used to transport the water from source to plant, not to mention the billions of discarded plastic bottles clogging landfills. Also at issue – increasing water scarcity as companies foraged for new springs to source.
To make matters worse, restaurants and the general public turned to tap water and cheaper brands of bottled water. Nestlé redoubled its marketing efforts, particularly for its lower-priced Pure Life brand, which sources water from municipal wells. Now, it’s optimistic that a radical experiment can restore its water brands.[more]
Nestle is testing the health of fish – trout, to be exact – in Cascade Locks, Oregon, in an effort to prove that municipal water can replace spring water in their Arrowhead brand. Key to the year-long test is showing that the Idaho Sockeye, an endangered species, can survive in hatcheries supplied from municipal wells.
Resistance from local environmentalists is so strong – Nestlé put the 1,700-gallon tank under lock and key and added security cameras. So far, three of the fish have died and will be autopsied.
“We are accused of mining water, which would suggest we are depleting a resource,” Kim Jeffrey, CEO of Nestlé’s North American water business told the Wall Street Journal, “but instead, we take water in a sustainable way. The notion that we just take what we want is simply not factual.”
Nestlé has been under scrutiny from activists since the 1970s, when the hot-button issue of marketing baby formula to poor mothers in underdeveloped countries hit the press. In the U.S. the company has suffered additional criticism for tapping springs in rural areas. 80% of Nestlé’s bottled waters come from those springs as opposed to Coke and Pepsi’s brands which are manufactured primarily from purified municipal sources.
When Nestle first came calling in 2008, checkbook in hand, Cascade Locks residents were open-armed. The initial offer was about $360,000 a year for water from Oxbow Springs. But since then, the situation has brought acrimony and division to this once sleepy Oregon town.
Julia DeGraw, the Food and Water Watch activist leading the charge against Nestle sums it up: “A lot of Oregonians don’t want to see the state’s resources extracted by a multinational that would make a massive profit off it. It’s all or nothing for us.”
Nestlé’s response from CEO Paul Bulcke: “Water is a category that gave us so many years of joy…and all of a sudden, it changes. That is what hurts.”
This kind of battle will only augment as costs of manufacturing rise and outspoken criticism from environmental activists keeps pace. The biggest loser, so far: the Idaho Sockeye.