LONDON: Emmanuel Faber’s ousting this week as chief executive of Danone, the French maker of Activia yoghurt and Alpro soya milk, was a victory for activist investors who disliked his style.
Transporting water long distances in bottles that can end up in landfill sites or oceans, rather than piping it in bulk, hurts the environment in ways that companies have been slow to address.But fancy mineral water drunk by people who already have potable water on tap is a luxury that can pay for its environmental remedies.
The answer was that someone who has plenty of water does not value another glass of it highly — its marginal utility is low. Natural diamonds are scarce, so each additional one is valuable.Mineral water’s rise in popularity is a story of companies such as Nestlé persuading consumers that the liquid that comes in bottles is healthier and tastier than that from pipes.
The good news is that luxury water is pricey. A bottle of S Pellegrino costs about four times as much a litre at a British supermarket as a pallet of Costco’s private label Kirkland Signature “bottled at source in Chase Spring, Lichfield”.This is the special stuff. Most bottled water does not flow from a French spa: It is from humbler aquifers, or is just purified municipal water, such as Coca-Cola’s Dasani.
Access to drinking water should be a human right, but even bottled water in Nigeria can be contaminated with bacteria, and half a billion people in the world face severe shortage all year round, according to one study. Nongfu Spring, China’s largest bottled water group, is valued at about US$65 billion thanks to its extraction rights to 10 water sources,Climate change and water scarcity add to the challenge in many countries, and tempt them to hand over responsibility to the private sector.
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