I rarely blog about non-tech issues (or at all these days), but i was struck today by my lunch experience. I went with a friend to the "foodie" SF Ferry Building for lunch, and in an attempt to cut back on my Diet Coke habit, I grabbed a bottled water. However...
My first thought was that there was a high carbon tax on this choice since it was "New Zealand Water" (no local choice available), and my second thought was that I should really find a drinking fountain and a cup since this bottle was a waste of money and of resources. Of course, my friend immediately piled on, stating that he had given up getting bottled water, and was trying to get rid of it in his office as well. I joked that I needed to hide my purchase in case I received nasty comments or stares, just as folks who wear fur out in public used to receive - on the other hand, I could probably assuage my liberal guilt by buying a carbon off-set like a Terra Pass. The NYT has jumped on this similar trend recently with a series of articles such as the one here.
People can claim this is just another San Francisco over-reaction, or a yuppie trend that will soon fade, just as fur wearing has now become more acceptable. I'm not so sure - I think this is just the tip of the iceberg, and the first products which are going to get hurt on a nationwide level are going to be simple bottled water ones since there is no way in an industrialized nation to make the case that the tap water isn't a sufficient replacement. This will obviously be an issue for leading water companies like Nestle and Danone, but it will also affect Coke ($1.9B in 2006 water sales) and Pepsi ($2.1B in 2006 water sales), especially since they are looking at water to drive their growth engines as part of alternative beverages.
I originally thought that this will seriously diminish the value of the recent $4.1B Glaceau purchase by Coke, but I think it will less affected since there is a feeling that Vitamin Water users are getting something that's not easily found in water fountains or taps, whether true or not. Other bad trends for water:
- Mayor Daley has endorsed an extra deposit tax on bottled water (here)
- Pepsi has agreed to change its labeling on Aquafina to make it clear it's coming from tap water (here)
- San Francisco, LA and Salt Lake City have banned city purchases of bottled water
- HIgh end restaurants such as Incanto and Chez Panisse have stopped offering bottled water, even though it's a high margin product - see article here
- And we here at Meez will be looking for a supplier of carbonated water to replace our bottles
This might turn out to be a passing fad, but my guess is we're just seeing the early signs, and it will significantly affect some companies, as well as open up opportunities for better solutions.