Water risks ripple through the beverage industry
June 17, 2009
The Italian restaurant Del Posto in New York City, backed by celebrities Mario Batali and Joseph Bastianich, is one of several restaurants shunning bottled water, along with the city of San Francisco and the state of New York. As environmental worries cut into sales from traditionally lucrative bottled water, beverage companies such as Coca-Cola, PepsiCo, Nestle and SABMiller are becoming more attuned to the risks of negative consumer environmental perceptions. Water is becoming scarcer, raising a fear that so-far manageable price increases could spike and lead drink companies to take action to maintain access to water and maintain their reputation. Water is still cheap, but that is changing. New water pricing schemes are emerging, such as the European Union''s Water Framework Directive that will tax water from 2010 to encourage more sustainable use. Some 70 percent of the water the world uses is for agriculture, while industry uses 20 percent. But any industry reliant on agriculture has more to wade through than its own use. SABMiller is one of a few companies, including Coke and Pepsi, calculating "water footprints." It found that water used throughout its supply chain, such as to grow barley and hops, can be 34 times more than its use alone. With 139 breweries on six continents, the brewer''s total water use can range from about 40 liters for a liter of beer in Central Europe to 155 liters in South Africa. Using the smaller ratio as a proxy, SABMiller''s entire "water footprint" was roughly 8.4 trillion liters of water last year, more than double what the small nation of Iceland used in 2004. As they face criticism, multi-national drink companies are setting water conservation targets, building community wells and more efficient factories, working with locals on sustainable farming, water harvesting and reforestation and looking for new technologies to reduce their water consumption even as they make more drinks. Within their own walls, non-alcoholic drink makers use one out of every 3,300 gallons, or 0.03 percent, of the groundwater used in the United States, according to the American Beverage Association. Coca-Cola learned the hard way, after a drought in the Indian state of Kerala led to the closure of its bottling plant there amid criticism that it was sucking the water table dry. Coke said its plant did not fuel the shortages, but an outcry still spread across the globe, with students in Britain and North America urging boycotts. Massachusetts'' Smith College even severed a five-decade relationship with the company by refusing to let it bid for its soft drink contract. Environmental and community groups are still fighting to kick Coke out of other villages in India.