Why we fell out of love with bottled water (and how the industry plans to win us back)

Report by Martin HickmanSaturday, 29 November 2008


Bottled water. We all hate it now, don't we? Few products can rival its spectacular fall from grace. Government ministers rail against it ("morally unacceptable" in the pleasingly direct words of the environment minister, Phil Woolas) and shoppers no longer think it is fashionable.
You only have to remember how cool Perrier was in the late 1990s to appreciate how low mineral water has sunk. A few years ago, to clutch a bottle of mineral water was a statement of wealth and vitality; a marker of metropolitan sophistication. It was clean, cool and fresh – and often stylishly French, too.
Now, though, bottled water is in danger of being a has-been. After three decades of constant growth which saw sales rise by a factor of 100, from 20m litres a year in 1976 to 2,000m litres in 2006, the rise and fall of the sales chart is starting to resemble one of the mountains pictured in the advertising. Unless the slide is halted, bottled water will become history, a consumer fad that couldn't live up to the hype. Unlikely, certainly, but the industry is spooked.
Mineral water is being assailed on all sides. Two years of extremely cloudy summers have hit demand; and now, the collapsing economy is causing consumers to question whether they need to spend £1 or £2 on something they can get for a fraction of the price at home. Most vexingly to its multinational cheerleaders, bottled water has become a symbol of environmental lunacy. How can one defend a product that is trucked hundreds or thousands of miles in plastic bottles when it gushes out of taps almost free? The Government has announced that it is banning mineral water from civil service meetings. Consumer groups call on diners to ask for tap – and millions are doing so. Mineral water is no longer cool; it's dumb, bought by gullible clothes-horses who care more about their skin than the planet.
For two years the executives of the £2bn-a-year bottled water industry have sat tight, hoping things would improve, silently fuming as their product's reputation dripped away. Now, they are striking back. Britain's three biggest bottled-water companies, the Swiss food giant Nestlé, the French dairy corporation Danone and Highland Spring have founded a lobby group to restore its reputation. The trio met in Cambridge earlier this month to hatch a plan to restore mineral water to its rightful place in the public's affections.
In months to come, there will be lobbying from the Natural Hydration Council and a massive advertising campaign that will seek to re-educate the public about the benefits of bottled water. And it will get dirty. The bottled water camp is throwing mud at the tap water companies, with talk of chlorine, septic tanks, contamination and irresponsible leakage. The companies are fighting for their lives. And they complain about dark forces doing down their transparent, beautiful product. How did water get this murky? And should we be buying San Pellegrino or Badoit – or not?
With his considerable frame filling a chair at the University Arms Hotel in Cambridge, Nick Krzyzaniak, managing director of Danone Waters UK and Ireland, is probably not what customers imagine the boss of Volvic to look like. He does not have wavy hair and a Gallic accent. He is 46, from Michigan and has spent most of the last two decades sealing boardroom deals in the US. Now he has been given the task of reviving bottled water – and he intends to succeed. Key to his mission is making Brits love mineral water again. He has a point, or several, to make.
Bottled water is a "stunning" product – healthy, pure and cheaper than many other less healthy drinks. It comes from some of the most pristine areas of the world (in Europe, say, the Alps or the Scottish Highlands) where it spends years being filtered and purified by natural processes. It has no calories, sugar, or additives.
But the problem is that while tap water costs one tenth of a penny per litre, Evian costs almost £1, if not more – making it as expensive as the petrol you put into your car.
Danone's solution to this is to tell the public that tap and bottled are not the same, even if they look the same. In his presentation to fellow industry members in Cambridge, Mr Krzyzaniak shows a picture of two identical looking glasses of water. "But are all waters created equal?" his presentation asks. "NO!" screams the graphic. There are pictures of the production of bottled and tap water. Bottled water drifts down from clouds over mountains, percolates through rocks and ends up in clear bottles. Tap water comes from groundwater, risking "contamination" from pesticides and fertilisers and a grey blot in the ground marked "septic tank". A dissected water pipe shows it is all furred up inside, like an old kettle.
"We are in a pristine, highly protected remote location, whether it is the Scottish Highlands or Evian in France, compared to a very industrialised product which is tap water," explains Krzyzaniak, castigating its mass-produced rival.
"Tap water is treated with chlorine to be disinfected – there are 110,000 tons of chlorine used every year to cleanse the product; and they need to do that.
"I make the same comparison," he adds. "Is organic food more healthy than genetically modified, pesticide-treated food? It's not killing anyone today, we would never say anything like that, but there is definitely a value difference. Our studies show that the Thames river water system recycles five to seven times before it disseminates from the system, so it's been through five to seven people before it leaves the system, which to me is a slightly scary proposition."
Bottled water executives accuse the tap water industries of spreading anti-bottled-water propaganda to distract attention from the above-inflation rises they will be imposing on households between 2010 and 2015. And they accuse the Government of casting around for green villains, when it should be improving its own environmental record, particularly on increasing recycling facilities for PET plastic, used for bottled water.
"It's a distraction for the politicians," complains Les Montgomery, chief executive of Highland Spring, who is building a railway to his factory to reduce the use of trucks and who uses 25 per cent recycled content in his PET bottles (he would like to use more).
"The recycling infrastructure is not there in the UK; that's got to be politically driven – it's got to be managed by the politicians.
"We are apolitical. But the impact that the statements have had on our industry," adds his marketing director Sally Stanley, "have been significant and it's been really lazy, sound-bite driven. It's easy for people to latch on to the so-called 'facts' that they're being communicated if they don't know any of the detail behind our industry."
The "detail" here is that, in fact, fruit juices, beer and wine almost certainly harm the environment more than bottled water. Unlike water, ingredients have to be grown (grapes, barley, hops, sugar, etc), all at a cost to the environment. Like water, the drinks are then transported long distances (New Zealand sauvignon blanc, Italian lager, the list is extensive).
Admittedly, carbon labelling is in its infancy, but the work done so far suggests that other soft drinks have a carbon footprint up to 10 times higher than bottled water. Danone, which has lightweighted its bottles and uses the train in France, calculates that production of one litre of Evian emits 198 grams of carbon dioxide.
When Tesco checked the Co2 of its orange juice, it found a litre cost 1,040 grams. Even the environmentally friendly Adnams brewery in Suffolk cannot reduce the Co2 of its East Green bitter below 864 grams.
Bottled water executives, though, really want to make a breakthrough on health rather than the environment. Studies show that organic food shoppers are more motivated by their own health than the planet: organic food is more of a "me" thing than an "us" thing.
And for all the environmental controversy, the industry fears it is the coming recession that most threatens to accelerate the 9 per cent decline in sales from the peak in 2006: shoppers must be convinced that bottled water is better than tap water.
Given that many people in the UK are now so positive about tap water, this is going to be tricky. According to Danone's figures, only 2 per cent of Japanese consumers believe their tap water is as healthy as bottled water. In Spain the figure is 13 per cent, in France 31 per cent, and in the UK it is 45 per cent.
Almost three-quarters of British people (72 per cent) believe that tap water is of good quality and only 9 per cent believe that it's bad quality. With good reason – the Drinking Water Inspectorate says that 99.96 per cent of UK water meets EU standards, unlike many parts of the developing world where drinking water is highly dangerous.
But these figures do not impress the bottled water industry: "99.96 per cent of your water being good enough is not good enough – 100 per cent of our water has to be good enough, because that 0.4 per cent, that fraction there, is not good enough. That should be challenged more," says Montgomery.
A key issue here is "consistency", adds Krzyzaniak. "Tap water changes from glass to glass," he says, explaining that chlorine wears out over time, meaning that the quality can vary depending on how long it has been sitting in the pipe. "And it also depends on the source, depending on where you picked up along the Thames. Could you be near a treatment centre, could you be near a highly agricultural centre, could you be near a waste treatment centre?
"Brits have one of the strongest beliefs in the healthiness of their drinking water and its provision is a fundamental reason to separate first and third world nations. But these water utilities are not municipalities; they are companies that are making profit selling the water, so they have to establish it is safe – and we do agree it's safe – but it's the inconsistency, and now with more modern drugs, chemicals and other things being introduced, it's much more susceptible to hormones, carcinogenics, and [other] things."
Why would tap water companies want to discourage sales of bottled water, though? Why would they be worried by mineral water? "It's a way of disguising some of the raising of prices they are going to have to do," says Krzyzaniak. "You are hearing there will be 13-14 per cent raises in the next few months. They are going to have to request massive amounts of money to help re-sill the pipes. If you look at a tap water company today they don't have the money to do that. But more than anything, it's a way of gaining control of the water system."
Perhaps unsurprisingly, the water companies do not share this view. Barrie Clark, director of communications at Water UK, the trade body for water utilities, says: "We will be very disappointed if there is a suggestion that bottled water is better or superior than tap water. We believe that good hydration is essential for good health. And we say good water is good water wherever it comes from; bottled and tap, both of which have been properly presented to the consumer so that they are entirely healthy and safe to drink."
Both sides of the water industry agree on this need for hydration – a word you will soon be hearing more of thanks to the Natural Hydration Council. According to the NHC, people need two litres of liquid a day to replace that lost in urine and sweat.
One of the reasons the bottled-water industry split from the British Soft Drinks Association was the BSDA's insistence that people be urged to drink any liquid, such as fruit juice or coffee, to hit the target.
But is there any truth in the suggestion that we do need to drink two litres of anything a day? The Food Standards Agency recommends that adults drink 1.9 litres of liquid daily, preferably water. "Water is the best choice for quenching your thirst between meals. It is totally calorie-free and contains no sugars that damage teeth. If you don't like the taste of plain water, try sparkling water or add a slice of lemon or lime," the Government agency says.
Scientific studies, though, are downright dismissive of the two-litre advice. Much of our liquid comes from food and in any case, we tend to drink when we are thirsty: we don't need to gulp down masses of water. In a review of scientific data published this year, the Department of Physiology at Dartmouth Medical School in New Hampshire in the US found no evidence for the message that we should drink eight glasses of eight fluid ounces a day – two litres.
"No scientific studies were found in support of eight by eight," said the researchers.
"Rather, surveys of food and fluid intake on thousands of adults of both genders – analyses of which have been published in peer-reviewed journals – strongly suggest that such large amounts are not needed ... This conclusion is supported by published studies showing that caffeinated drinks may indeed be counted toward the daily total, as well as by the large body of published experiments that attest to the precision and effectiveness of the osmoregulatory system for maintaining water balance."
Our livers are very effective at removing toxins. The less you drink, the darker your wee will be, because the toxins will be expelled in a less diluted form, but that is not necessarily a problem.
But the amount of sugary, fizzy drinks we consume, at a time of mass obesity, almost certainly is. We drink four times as much sugary drinks as we do bottled water. The bottled-water industry argues that it could help solve public health crises like obesity.
In the absence of a Government drive to recreate the Victorian public drinking fountains, they're probably right. (Though re-filling a water bottle before you travel is the next best environmental solution.)
"We've done plenty of work on it and if you have a look at what consumers would buy in the absence of bottled water," says Sally Stanley at Highland Spring, "they would revert back to buying the carbonates of old. Would that be good? I don't think so. We've spent an awful lot of time and effort trying to wean children off carbonated soft drinks that are sugar-laden or diet carbonated drinks which contain other ingredients. And my goodness, hardly any of them drink bottled water or tap water."
"When you look at obesity, dental health, drink driving, drugs," she continues, "almost every public health campaign that the Government will fund has as part of its solution water.
"Taps aren't available in pubs always, they aren't available in cars – the last time I looked. I think we've got to be bit more measured about what we're communicating to consumers, because the campaigning against bottled water will, ultimately, impact on the health of children and the health of adults who would otherwise drink other beverages."
So, taking everything into account, bottled water isn't so bad. Faced with a choice of fruit juice, cola, beer or wine, Perrier or Evian is a better choice for your body and the planet. That doesn't mean that we should stop asking for tap in restaurants, or refilling bottles at home, or urging politicians to find ways of serving water on the go. Nor does it mean we should take the mineral water industry's insistence that we endlessly swig on a bottle too seriously. But, with so many environmentally damaging and unhealthy drinks out there, mineral water is more saint than sinner.
Dripping points
PRICE
0.1pence......... cost of litre of tap water90p.........cost of litre of mineral water
SALES
£2bn......... annual bottled water sales£10bn......... tap water sales
TRUST IN TAP WATER
72% of people in UK believe tap water is good quality9% believe it is bad quality
FALLING BOTTLED WATER SALES
2,075m litres – estimated bottled water sales 2008-9% - decline in sales over the past two years
But still double 10 years ago...
990m litres – bottled water sales in 1998
And 100 times 30 years ago...
20m litres – bottled water sales in 1976
DEFLATION
Between 1997 and 2008, price of bottled water fell 8.2%
CALORIES (PER LITRE)
Tap water ......... 0Bottled water ......... 0Smoothie ......... 550Beer ......... 350Orange juice ......... 480sugar (per litre)Tap water ......... 0Bottled water ......... 0Smoothie ......... 48 gramsCoca-Cola......... 106 gramsOrange juice ......... 106 gramsCLIMATE CHANGE (Co2 per litre)
Tap water ......... 0.2 gramsBottled water ......... 198 gramsSmoothie ......... 686 gramsBeer ......... 864 gramsOrange juice ......... 1,040 grams
ANNUAL CONSUMPTION PER PERSON (AVERAGE)
97 litres .........fizzy drinks55 litres ......... concentrated squash36 litres......... bottled water23 litres......... fruit juice23 litres ......... juice drinks
MARKET SHARE
56% ......... tea, coffee and other hot drinks8% ......... fruit drinks8% ......... alcohol8% ......... miscellaneous7% ......... carbonated soft drinks7% ......... tap water3% ......... bottled water3% ......... milk
BOTTLED WATER TYPES (UK)
Mineral water ......... 60% Spring water ......... 26% Bottled drinking water ('table' water) ......... 11% Purified water ......... 3%