When Environment Minister Phil Woolas earlier this year described drinking bottled water as "almost morally indefensible", he sparked a furious response from an industry that is working hard to underline its green credentials.
The straight-talking minister said it was "daft" that six million litres of bottled water were drunk every day in Britain when safe tap water was universally and cheaply available. His comments also struck a chord with environmentalists, who believe the packaging, transportation and disposal of bottled water products creates unnecessarily high carbon-dioxide emissions.
The Bottled Water Information Office (BWIO) was quick off the mark in refuting Woolas's remarks, saying he was clearly "ill informed about bottled water and the role it has to play in society, either in this country or other parts of the world".
"He is also forgetting the role bottled water plays in crises," said Jill Ardagh, director general. "He did not seem to think that bottled water was "morally unacceptable" when the Government was desperate for bottled water supplies during last year's floods."
The BWIO is still waiting for a head-to-head with the minister to get an explanation of his views. If that meeting ever takes place, the BWIO will have plenty of material with which to set straight the industry's environmental credentials.
Many of the major suppliers are acutely aware of their responsibility towards the environment and have in fact made environmental impact management a key strategic issue and priority. Not only that, but in a competitive market place, how suppliers convey their green credentials is also a major selling point for many consumers.
"The days when consumers chose which bottled water to buy according to price are coming to an end," says Paul Martin, managing director of Waterbrands, which owns the Harrogate Spa Water and Thirsty Plant. "Nowadays, shoppers are only too aware that the choices they make have an impact on the world around them, and this is reflected in the products they put in their trolleys.
"People are increasingly more likely to buy an item if it means they're also doing their bit for the planet." Thirsty Planet has attracted significant brand loyalty since its launch a year ago, to the extent that it now boasts a 65% volume share of the charity water sub-category [Nielsen Scantrack, October 07]. It makes a guaranteed, specified donation to the charity Pump Aid for every bottle sold, with the aim of bringing clean, safe water to 10 million people in Africa by 2015.
"There has been a lot of negative publicity in the media recently about the environmental impact of bottled water, but we believe that we have one of the lowest carbon footprints in the industry, and we will continue to look into ways of reducing it even further," says Martin. He's not alone - Danone, Fiji Water, Spadel UK, Aqua-Pura and Highland Spring were all keen to share their 'green' plans with MB&R and their efforts to reduce their carbon footprints (see box).
"The recent backlash is a challenge but also an opportunity for us to talk about the benefits of bottled water and why there are 30 million people out there enjoying it," says Liz Bastone, of the BWIO. "What we want to do as an industry is talk about the informed choice people are making. The fact that we are an environmentally responsible industry, with 100% recyclable bottles. Obviously, we have been in the media spotlight but that's given us this opportunity to talk about bottled water. Feedback from the public has been positive."
Given that there was barely a market for bottled water 10 years ago, its growth to its current market position has been little short of explosive. There are now around 220 brands from something like 190 suppliers in a retail market worth more than £610m.
Last year, more than 1.2bn litres of bottled water were drunk in the UK, with shoppers spending over £69,000 an hour on bottled water. However, it's little surprise that last year's bad weather, particularly in the key summer, had a severe impact on the bottled water segment, with sales down by 5.3%. However, if you strip out the water-hit summer months of May-July, then bottled water still showed growth of 1.9% over 2006, with 'still' showing good growth of 4.1%.
The industry is hoping for a more clement 2008. "The poor summer weather did impact the market," says Chris Wright, marketing director for Aqua-Pura. "Water's health credentials make it popular throughout the year but a second cold, wet summer would provide another blow to the market."
Wright says the unpredictable nature of the weather means companies like Aqua-Pura have developed a specialism for managing supply and demand which includes constantly monitoring the long-term weather forecast. "When the weather doesn't meet expectations, it is down to retailers and suppliers to smooth peaks and troughs with clever promotional mechanics and supply chain efficiency," he says.
Despite last summer's washout, the bottled water market has been in strong growth over the past five years, although the industry still believes there is significant room for growth, with the per capita consumption of bottled water in the UK still lagging significantly behind other countries (approximately half of the per capita consumption of bottled water in the US for example). Meanwhile, the consumption per head per year in Britain is 38 litres, whereas, in Italy, it's 176 litres per person.
However, the signs are positive. Bottled water remains one of the fastest growing and best performing soft drinks' categories, up 12% in the last five years (AC Nielsen Dec 2007). Almost 27 million adults in the UK now drink bottled water.
One Norweigan firm is convinced enough of the growth potential of the UK market to launch a premium water into Waitrose and Morrisons this Spring. A major marketing campaign behind this "exceptionally pure" Norweigan glacial water Isklar is hoped to bring great things this year. The firm believes the market will grow by 30% over the next five years.n
WHAT THE SUPPLIERS ARE SAYING
The concept of 'food miles' is flawed and we believe that it will fade once consumers have a deeper understanding of what drives the carbon emissions of the products they buy. FIJI Water will disclose cradle-to-grave emissions figures for each of its products within weeks, and these will show that emissions from transportation from Fiji are lower than, say, choosing to bottle a beverage in glass (which we don't do). Retailers who wish to drive this education process should focus on disclosure of product lifecycle emissions and not on the simplistic proxy that is food miles.
Our product is never flown anywhere - it travels to the UK by ship only.
Thomas Mooney
founder, FIJI Water
WHAT THE SUPPLIERS ARE SAYING
When you look at what's available on the supermarket shelves, it's a tiny fraction of the number of brands that are available in the UK market. If you look at the way retailers merchandise their water, sometimes they'll split it by still and sparkling - which is helped by the blue/green colour coding - and given the space taken by each roughly equates to the ratio in which people drink bottled water (85% still, 15% sparkling). As to provenance, I'm not sure that retailers really help this although it would be an interesting way for retailers to merchandise, having the most local water to a store at one end and the furthest away at the other.
Gill Bullock
marketing manager, Spadel UK
CATEGORY INSIGHT:?Green credentials
The industry is addressing the issues after a recent outcry over the environmental impact of bottled water
When something catches the attention of the popular press, it can be difficult to shake off. And yet Environment Minister Phil Woolas's comments about bottled water have merely served to highlight how effectively suppliers are targeting issues like sustainability, packaging and their carbon footprint - far more effectively than manufacturers in other retail sectors.
"The recent outcry over PET bottles and food miles has led to a backlash in the media against bottled water," says Paul Martin managing director of Waterbrands. "It is singled out for criticism, but it is not the only product packaged in plastic or transported in bulk.
"What is rarely mentioned is the fact that 85% of bottled water drunk in the UK comes from sustainable, natural sources and that 75% is sourced here in Britain. Thirsty Planet certainly falls into both categories." Launched on March 22 last year - World Water Day - a proportion of every sale of Thirsty Planet bottled water goes to help people in Africa: so far, more than £370,000 has been raised to help more than 750,000 people.
Meanwhile, both Thirsty Planet and Waterbrands' flagship Harrogate Spa Water have boosted their environmental profile by repackaging the product in lighter PET bottles. The 500ml bottles have been reduced from 23g to 17.5g, cutting the brands' carbon footprint by reducing the materials used and slashing distribution costs. In addition, the company sources all its raw materials from within 60 miles of its bottling plant in Harrogate.
Meanwhile, Danone, whose brands command 40% of the UK bottled water market, has an ongoing sustainable development programme that has already accomplished significant results. For example, over the past 15 years, Danone has achieved a 30% reduction in the weight of PET bottles and has increased the proportion of miles its products travel by train to 70% of the total distance. An investment of €16 million has been made in its Green Plants Initiative, so far achieving a 16% reduction in water usage, a 19% reduction in energy use, and a massive 76% reduction in industrial waste recovery between 2000 and 2005.
CATEGORY INSIGHT:?marketing and more
Linking brands with celebrities and targeting their key promotions effectively are helping to forge loyalty
"There was a time when almost all bottled water was sold on provenance - the purity and integrity of its source. These days, provenance and purity are a given and brands need to do more to stand out from the crowd." So says Chris Wright, marketing director for Aqua-Pura, which sponsors UK Athletics and events like the Great North Run. Wright says the key to the brand's positioning has been its ability to promote bottled water for its benefits rather than its source.
"Marketing of bottled water is changing," says Wright. "A one-size fits all solution no longer exists and suppliers are increasingly tailoring products and marketing activity to specific consumer groups." For example, Aqua-Pura's 330ml 'minis' are aimed at children's lunchboxes, with its one litre, sports cap bottle for runners and gym-goers.
Highland Spring is also a long-term supporter of British sport and forges the link between active sport and good hydration through its sponsorship portfolio. The company is the exclusive beverage sponsor to Britain's leading tennis player Andy Murray, who hails from Dunblane, Perthshire, just 10 miles from the company's bottling plant.
On-pack promotions are a good way of adding value and engaging consumers. To support its sponsorship of Murray, Highland Spring has teamed up with games giant Nintendo to launch an on-pack promotion to join Andy Murray for a Nintendo Wii tennis match at the National Tennis Centre in Roehampton. Sally Stanley, marketing director at Highland Spring, commented: "Highland Spring is supporting British tennis and reinforcing the health benefits of staying hydrated during sport."
Danone has a number of initiatives for its brands, focusing on health, sport and charitable initiatives. Evian's Detox campaign is back for the start of 2008 for the 8th year running, with a £1.5m marketing campaign, which is 15% bigger than last year. Detox 08 will communicate the purity of Evian and the role it plays within body renewal, given that 60% of the body is made up of water. Evian is also now the 'official' bottled water of The Wimbledon Tennis Championships in a multi-million pound deal over the next five years.
Has the number of customer complaints about the price of goods increased recently?
