Nestlé’s Billion-Dollar Bottled Water Hustle
Bottles of water lined up and ready to go in the Ice Mountain plant in Stanwood, Michigan. That’s a lot of plastic being used—and a lot of water being used to both fill and produce that plastic. (Image Credit: Garret Ellison/MLive.com)
The name “Nestlé” may very well conjure up images of chocolatey goodness owing to its ownership of brands like Butterfinger, Nestlé Crunch, and Toll House cookies. Those more familiar with the Swiss conglomerate’s bottled water operations, however, are more apt to associate it with corporate profit-seeking at its most sinister.
An excellent piece by Caroline Winter, staff writer for Bloomberg Businessweek, helps shed some light on just why Nestlé’s use of water resources in the United States and elsewhere has become so controversial. The crux of the article, which explores the production of water bottles at one Michigan plant, the genesis of the company’s experience with bottled water dating back to the 1800s, and the domestic and international demand for Nestlé’s and other companies’ bottled water products, surrounds the monolithic entity’s monopolization of water supplies, either through the promise of economic benefits for communities or due to their desperation for funds. Winter lays out the essentials in a particular passage relating to said bottling plant located in Mecosta County:
The Michigan operation is only one small part of Nestlé, the world’s largest food and beverage company. But it illuminates how Nestlé has come to dominate a controversial industry, spring by spring, often going into economically depressed municipalities with the promise of jobs and new infrastructure in exchange for tax breaks and access to a resource that’s scarce for millions. Where Nestlé encounters grass-roots resistance against its industrial-strength guzzling, it deploys lawyers; where it’s welcome, it can push the limits of that hospitality, sometimes with the acquiescence of state and local governments that are too cash-strapped or inept to say no. There are the usual costs of doing business, including transportation, infrastructure, and salaries. But Nestlé pays little for the product it bottles—sometimes a municipal rate and other times just a nominal extraction fee. In Michigan, it’s $200.
Putting the weak resistance of municipalities, counties, and states aside for the moment, what aids Nestlé in its bid to capitalize on control of water resources are trends involving water consumption. First, there’s the demand, fueled by concern for contaminants in tap water, even though, as Winter suggests, bottled water’s superiority in purity and taste may be overstated (more on this later).
There are also concerns with supply, though, particularly in areas where the infrastructure for water maintenance is poor, thus lending itself to Nestlé’s ability to swoop in and market an alternative that appeals to consumers and government officials alike in that neither feel obligated to fix or rely on public utilities. In addition, uncertainty about whether or not water is a human right, in part fueled by statements of the latter persuasion by company executives, serves to undermine public outrage over the commodification of this resource by Nestlé and its competitors. For those well-versed in the debate over universal health care in the U.S., for instance, such is another iteration of the larger push-and-pull between progressive activists and corporate agendas.
Still, at the end of the day, it’s up to these would-be hosts of Nestlé facilities to decide whether to let the thirsty wolf in the door, so to speak. As Winter tells, the company tends to target areas where water regulations are inconsistent/lax or where it feels it can effectively lobby to weaken restrictions, and while towns in some states have said no to Nestlé, elsewhere and in a majority of cases, the conglomerate has been able to impose its will despite opposition. In perhaps the most disturbing example of San Bernardino, California, for a nominal yearly fee paid to the United States Forest Service, Nestlé has been able to extract tens of millions of gallons of water, even during droughts. So much for the greater good.
The remainder of Winter’s piece is spent reviewing two case studies in the state of Michigan in which residents and environmental activists were or are pitted directly against Nestlé. The results are not too heartening, either, for evidently, when Nestlé wins, they win big, and even when they lose, they still manage to win somewhat. Going back to Mecosta, in 2000, Nestlé purchased the Ice Mountain water brand from Pepsi and relocated facilities there. State and local officials, all too happy to be doing business with Nestlé, offered the company a one-time $13 million tax break. When residents got wind of this, however, they formed a grassroots water conservation group of Michigan citizens opposed to Nestlé opening up shop in their backyards, and enlisted an environmental lawyer to challenge the Swiss multinational in the courts. The outcome? After eight years and $1 million+ in legal fees, the two sides settled for a reduced water-pumping rate and seasonal restrictions. Um, hooray?
More recently, in Evart, the Michigan Department of Environmental Quality caught flak for their clandestine near-approval of an application by Nestlé to more than double its water extraction rate. It took a 2016 investigative report by Garret Ellison which appeared on MLive.com to break this news to the public, whereupon people were justifiably and demonstrably distraught. At a subsequent public hearing held by the DEQ on Nestlé attended by upwards of 500 people, numerous speakers assailed the Department’s overall resource management record, notably invoking the Flint water crisis. So too did they question Nestlé’s ability to essentially pay pennies to extract ungodly amounts of water while residents of cities like Flint and Detroit are forced to use bottled water and cough up a disproportionate amount of money for tap water tainted by lead or shut off at times. For all this outward show of dissatisfaction, Winter mentions, the DEQ representatives “shuffled offstage, refusing to comment.”
Accounts of the extent of the environmental impact of pumping increases like the one proposed in Evart imaginably vary depending on the source; in the case of the Michigan DEQ, officials overruled the computer model used to help assess the effects of water consumption in the state, finding its calculations “overly conservative.” Meanwhile, at the heart of this discussion is more than just whether or not 400 gallons a minute is too much, but whether or not large corporations like Nestlé should be able to claim ownership of necessities like water in the first place, “renewable” as they may be. It’s the same sort of right-vs-privilege dynamic that characterizes, again, the health care debate in this country, and which informs principles like the public trust doctrine that reserve certain resources or specified amounts of these resources for public use. For many of us across socioeconomic statuses, it is critical to know that not every bit of land in America is subject to being bought by and sold to the highest bidder.
From a conservationist and environmental standpoint, it’s clear the implications of Nestlé’s global footprint exceed that of exploitation of water resources which threaten to diminish as a result of climate change. After all, this is bottled water we’re talking about here. According to information provided by the company itself on its Nestlé Waters website, the average global bottled water consumption is 50 liters per capita per year. It requires a lot of plastic, to the estimated tune of over 200 billion bottles annually worldwide. It would be one thing if most or all of those containers were being recycled. Domestically, at least, however, if recycling rates have remain unchanged from about a decade ago, we are simply throwing away close to 90% of the water bottles we buy in the United States. To make matters worse, the very production of these bottles expends precious resources. It costs millions of barrels of oil to make the world’s water bottles used for drinking, and three times the water that goes into these bottles is consumed by the process. That’s a lot of pollution contribution for one industry.
At least the product is worth it, right? That is, at least bottled water tastes better and is better for you, right? Perhaps not. On the side of the taste of bottled water vs. tap water, numerous tests have shown people’s inability to distinguish the two, with psychological experts attributing the difference simply to the expectation bottled water will taste better. As for how safe bottled water is relative to tap water, there is also a significant amount of research which suggests the idea that bottled water is a safer and healthier alternative to tap water is propaganda perpetuated by the bottled water industry to sell its product. This is before a recent study by Orb Media found more than 90% of water bottles contain microplastics we are likely consuming as we drink, the health impact of which is uncertain because it hasn’t been studied extensively. By all means, though, enjoy that bottle of Poland Spring.
It should be emphasized that Nestlé, while a leader in bottled water production and a company known for—how shall I put this?—a remarkable zeal for acquisition of water resources and litigation thereafter, is not the only player in the business of marking up and reselling water from people’s backyards back to them. Aquafina and Dasani, brands owned by PepsiCo and the Coca-Cola Company, respectively, notably created controversy when they were forced to admit that their product is glorified tap water, filtered through reverse osmosis and further purified with the help of minerals or other processes like ozone sterilization. In light of the statistics on bottled water and how much is used or wasted on their disposal and production, however, it’s worse that there is an entire industry responsible, and thus a myriad number of companies of which to ensure their accountability and transparency.
Accordingly, it’s tough to find silver linings with respect to the issue of bottled water companies and water usage. Since Caroline Winter’s piece for Bloomberg Businessweek was published, Evart has apparently denied Nestlé’s request to build a boosting station to augment its water-pumping output. The town’s predictable reward for this? A lawsuit from Nestlé. As for the global proliferation of bottled water, while the news of ingesting microplastics could, in theory, curb consumption, at the end of the day, assuming people have even heard or read these reports, they still get thirsty. Bottled water, in its seeming ubiquity, is convenient for those of us living an on-the-go lifestyle. After all, how many of us frequent fast food restaurants despite knowing how bad their offerings are for our bodies? At the very least, and even if we do care about limiting our plastic consumption, we may, say, forget to bring a reusable water bottle with us when we get to where we’re going. For all our good intentions about living a healthy, sustainable lifestyle, it requires discipline and practice, and for those moments when we falter, Nestlé and its competitors are waiting.
Despite all these obstacles, the conversation about standing up to the bottled water industry (Big Water?) and insisting on repairs/upgrades to our water utility infrastructure as well as preservation of the human right to water—and yes, like health care, this is recognized as a human right and not a privilege—is one we need to be having, especially as access to clean, drinkable water becomes less and less certain here and abroad. Back in May of 2016, in response to a drought at the time, Alissa Walker, in a piece for Gizmodo entitled “Stop Drinking Bottled Water,” addressed the importance of big-picture thinking that transcends scrutiny of individual corporations and municipalities when it comes to this topic:
We can’t stop at the municipal level. We have to think bigger. Eleven percent of the Earth’s population does not have access to safe drinking water. There are people in this country who are currently facing a groundwater contamination crisis. Instead of throwing our Great American Problem at people by the plastic-encased-in-plastic case, we should be focusing on designing and building comprehensive, permanent water systems for every person on this planet. Each bottle of water purchased is a vote against that goal.
Giving up bottled water also means thinking long-term about preserving water security. You may have reservoirs near you brimming over with fresh rainfall right now, but the truth is that the amount of potable water on this planet is growing more scarce every year. The bottled water industry is one of the fastest-growing on the planet. Last year it made $100 billion, an amount that is expected to double within five years. Now consider the fact that it actually takes the equivalent of three bottles of water to make a single water bottle. Every swig from a plastic blob in the name of convenience moves us closer to a world without any clean water at all.
Because like I said before, it’s not about this drought—it’s about every future drought.
Walker is right. Whatever your angle, whether it’s concern for the people of small-town America and others in preserving their way of life, or for the planet’s future, or simply to stick it to big corporations like Nestlé, there is a reason to get invested in this issue. Choose one, and make sure to have your reusable water bottle handy while you do it.
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