The article in the url below discusses the growing importance of water as a strategic asset – one that needs to be acquired by companies and protected by local communities. The trouble with this is those two imperatives are often incompatible, as is evident in a recent conflict that arose in Chaffee County, Colorado:
"The world's largest food and beverage company [Nestlé] wants a new 10-year permit to pump 200 gallons of groundwater a minute and truck it to Denver for bottling."
Extracting that much water from the ground adds up to "65 million gallons of groundwater a year," and is an issue for Nestlé everywhere the firm operates:
"The same scene played out in person in 2009, when the world's largest food and beverage company applied for a permit to drill wells along the banks of the Arkansas River and build a pipeline to a station where 25 trucks a day would haul the spring water to a Denver plant for bottling under the Arrowhead brand."
One problem for Nestlé is that, the more often these conflicts arise, the more aware local populations are about the potential consequences of this resource utilization, and the larger the likely backlash. In Colorado, for example:
"The county's population is booming. Drought is ravaging the state. Plastic is polluting the planet. Nestlé Waters has been targeted by conservation groups across the country as it expands its water bottling operations. And Nestlé is about to sell its North American water brands."
Until now, the company has done very well with its sales of bottled water:
"Nestlé Waters reported $8.6 billion in sales in 2019, down slightly from 2018. The company's North American water brands generated $3.6 billion in sales in 2019."
But, increasingly, Nestlé realizes it is going to have to alter its approach if it expects to continue receiving approval for such projects:
"Earlier this year, as Nestlé worked to increase sustainability and profitability, the company said it would, by 2025, replenish all the water it sucks from watersheds and offset the carbon footprint of bottling and transporting water."
Interestingly, perhaps Nestlé has concluded that these fights are more trouble than they are worth:
"The company also announced in June it was exploring a sale of its water-bottling operations in Canada and the U.S."
And, as the article explores in detail, there are multiple challenges to the company's "water-mining operations" throughout the U.S. As a result, and perhaps more encouragingly, the company is increasingly unwilling to produce products that are inconsistent with its commitments to become a more sustainable company:
"John McGowan, a Chaffee County homeowner, on Thursday asked the commissioners to examine why Nestlé was selling and warned against a private equity owner. 'Nestlé is saying it has promised to operate in more sustainable ways,' McGowan said, 'but Nestlé found it has a dilemma with its North American waters business, which cannot fulfill these new environmental promises and achieve its profitability goals.'"
Nestlé divesting itself of this unsustainable business, of course, does not mean that the firm isn't willing to sell the division to the highest bidder who will then seek a return on its investment. In order to do so, that firm is going to need access to plentiful supplies of fresh water.
Take care
David
David Chandler
© Sage Publications, 2020
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Nestlé's plan to pump 65 million gallons of Arkansas River water to Denver for bottling stirs contentious fight
By Jason Blevins
October 26, 2020
The Colorado Sun
