Small Water Firms Can Not Compete with Big Rivals

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Small Water Firms Can Not Compete with Big Rivals

Ethical Bottled Water Companies Like Belu and One Water Find it Hard to Compete with Nestlé and Coke

Former marketing executive, Duncan Goose, credits the photo - which appeared on page 18 in this newspaper on 15 December 2003 - as a catalyst for his bottled water brandOne Water. The UK-based social enterprise pledges to donate all its profits towards providing clean water in the developing world. To date, it has given away over £10m.

One Water, sold in superstores such as Tesco and Waitrose, is not alone. Other brands promising to channel revenues from bottled water sales back into water-related projects includeBelu,Thirsty Water,Life Waterand the Co-op's own brandFairbourne Springsin the UK, as well asPeople Waterand Starbucks-ownedEthosin the US.

The social contribution of these for-profit water brands is admirable. People Water, for instance, commits to generate one litre of "new water" for every litre sold. It says its ‘drop-for-drop' model has helped secure over 5m gallons of clean water to communities. Belu's commitment to pass on all its profits to WaterAid has delivered over £583,000 to the UK charity since 2011, benefiting nearly 40,000 people.

These pro-social business models are certainly generating benefits, but the ability of a small ethical bottled water firm to make a dent in the world's water crisis is limited.

How can their impact be scaled up? The likes of Belu and One Water could increase their market share. Collectively, their portion of the$157bn (£94.7bn) global bottled water marketis miniscule.

Unlike other more sophisticated product categories, quality is not the issue. The price points of ethical and mainstream brands are not especially divergent either (although brands like Belu target high-end trade). As for eco credentials, the sector's smaller players frequently outperform their bigger rivals, often boasting progressive policies such as no water imports or ultra-lightweight packaging.

Invariably, the main barrier to growth keeps coming back to the cost of doing business, says Goose: "We're up against companies like Nestlé and Danone that have global manufacturing capability and that can invest in customers in a way we can't."

The logical alternative is for the brands that dominate the bottled water market to take a steer from the sector's ethical upstarts. The notion of giving back what you take is not such a new one after all. Shoe manufacturer Toms has been doing it for years.US spectacle brand Warby Parkerpursues a similar "buy one give one" policy.

Source: The Guardian

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