Bucking the Bottled Water Backlash

US drinking water retailer Glacier has defied the recession with record revenue increases for 2008. When many companies struggling to maintain their business, Glacier has shown that even when times are hard it is important to cater for a number of consumer needs.

Glacier Water’s revenues were up 4.8% to $94.7m in 2008 compared to the previous year. This increase was accompanied by a reduction in the net loss applicable to the company’s shareholders, which stood at $4.2m, compared to $4.9m for 2007.

Glacier primarily sells bottled water through 17,000 vending machines located throughout North America. Some machines are housed in retail stores, while some remain accessible to the public at any time. Convenience is still a key consumer trend and having machines that are available to consumers 24 hours a day maintains some appeal.

In recent times, the bottled water category has suffered in the public eye after many years of strong sustained growth. A backlash spearheaded by pressure groups has highlighted the cost of the bottled water industry to the environment through packaging and a large carbon footprint. Glacier has addressed some of these issues by offering a vending machine that allows consumers to use their own reusable containers.

Bottled water was expected to lose sales in the face of the current global recession. With disposable income constricted, many consumers have chosen to drink tap water rather than spend substantially more on bottled water. The encouraging results posted by Glacier show that growth is still possible in a struggling sector.

Bare necessities

The backlash is far-reaching, however, and the future success of the market is still far from guaranteed. Alongside cash-strapped consumers are organisations which are calling for more coordinated group bans. For example, teachers in Vancouver, Canada, are calling for a ban of bottled water throughout city schools after it became the most popular item for children to buy following an all-out ban of junk food vending machines.

It is estimated that Canadians purchase three-quarters of a billion litres of bottled water a year and although some argue that its status as the fastest-growing bottled drink in the country is an improvement on the fizzy drink frenzy of the past, the amount of waste produced takes the shine of any progress.

Meanwhile, water suppliers of the biggest consumer nation of bottled water in the world – Italy – are hitting back by rebranding tap water, according to a report in ultramarketing.com. Aqua Veritas is the brand name given to tap water readily available in Venice households. The collection of discarded bottles around the city’s canals costs £200 a ton, making the city’s mayor desperate to find a solution for the escalating waste.

If this scheme gains as much traction as a similar campaign in Manchester, UK, then it could save Venice a hefty sum. The promotion by water bosses to encourage people to drink tap water has won an environmental award and was backed by councils, sport clubs and restaurants across Greater Manchester.

Bit of style

Battling against these trends is bottled water giant Evian. And, rather than convincing the consumer that it is in line with price-conscious shoppers it has taken the opposite angle for its latest branding and marketing campaign.

Evian’s recently launched an haute-courtier range with the backing of top fashion and perfume designer Jean Paul Gautier. The Prêt-à-Porter bottle is kitted out with an opulent crystal design in a special edition bottle that, according to the company’s website, “celebrates the simplicity of pure beauty”.

Quoted as the designer’s “inspiration”, Evian has added this bottle to the more elaborately-designed Pinnacle edition by Christian Lacroix. Although this will probably not make up the mainstay of Evian’s sales, the bottles do point to a company making a point of its packaging and confident in overcoming any consumer caution.

The future of bottled water is far from certain, with many influences on the market. However, Glacier’s impressive figures are good news for the industry and demonstrate that sales can be maintained during tough economic conditions. They also indicate that the recession is not the only consideration for consumers, and a much broader range of factors are still influencing purchasing behaviour.

A version of this article first appeared in our sister publication Drinks Business Review.