The Bottled Water Industry and Sustainable Operations

Steve EmeryEARTH2O Natural Spring Water

Understand the category you compete in

• Consumers driven by price first

• Retail consolidation to national brands limited local options

• Convenience & Gas category distribution purchased

• National brands purchasing market share – DS Waters

• Distribution cost increases

• Disposable income declining

Factors Impacting Beverage DistributionUnderstand Market Dynamics

Michael Porter Competitive Advantage Model• Cost Leadership (low cost producer) – Private Label, Nestle

• Differentiation – all other bottled water producers Believe theirsis best based on content of water

• Focus – Coke (Dasani) Pepsi (Aquafina) outstanding distributionexecution

Be careful of competitor creep Green Washing

Green Washing in the bottled water industry• “Carbon Negative” bottled water imported into USA use carbon

offsets• “Eco” bottle – borehole pumping?• PLA Bottle – cradle to cradle or grave?• Reverse Osmosis waters generating 3 to 9 gallons (New state of

the art 1 waste for 1 produced) of waste to produce 1 processedgallon: “Eco Challenge – bottle is 100% recyclable” – “our bottleis 100% recyclable change the bottle, keep the taste, help theearth”

• X Waters “Go Green” campaign urges consumers to recycle

Porter Value Chain Frameworkreduce waste and communicateWaste = Expense & Emissions

Inbound Logistics

Elimination of waste in packagingFirst water company in US to eliminate Cardboard in PET

Packaging

New Solar Array

Additional Operations

• Recycling of inbound waste material

• Affluent pond - evaporation and irrigation

• Efficient and passive lighting

• Facility heating

• LEAN Manufacturing

Outbound Logistics

Conclusion• Get a clear understanding of the segment in which you compete

and differentiate you brand message

• Green Washing will cloud the sustainability effort, consumerconfidence

• Evaluation of Value Chain will help to determine sustainability ofa product

• The Value Chain with the least waste will be the most profitableand competitive

• True investment in sustainable efforts will yield higher returns

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