10 Oct 2016 How the business of bottled water went mad
How did a substance that falls from the air, springs from the earth and comes out of your tap become a hyperactive multibillion-dollar business?
Right now, the global bottled water industry is in one of those strange and energetic boom phases where every week, it seems, a new product finds its way on to the shelves. Not just another bland still or sparkling, but some entirely new definition of the element.
It is a case of capitalism at its most hyperactive and brazenly inventive: take a freely available substance, dress it up in countless different costumes and then sell it as something new and capable of transforming body, mind, soul. Water is no longer simply water – it has become a commercial blank slate, a word on to which any possible ingredient or fantastical, life-enhancing promise can be attached.
And it’s working. Over the past two decades, bottled water has become the fastest-growing drinks market in the world. The global market was valued at $157bn in 2013, and is expected to reach $280bn by 2020.
Last year, in the UK alone, consumption of water drinks grew by 8.2%, equating to a retail value of more than £2.5bn. Sales of water are 100 times higher than in 1980. Of water: a substance that, in developed countries, can be drunk for free from a tap without fear of contracting cholera. What is going on?
For a substance that falls out of the sky and springs from the earth of its own accord, water has always had an extraordinary commercial lure.
According to James Salzman, the author of Drinking Water: A History, monks at holy wells produced special water flasks for pilgrims to take away as proof of their visit – a medieval example of the power of branding. For centuries, wealthy Europeans travelled to spa towns to sample the water in a bid to cure specific ailments. The spa visit was a signal of health, but also of status: somewhere to be seen, an association of liquid and individual that broadcasted social elevation – a distant precursor to Kim Kardashian clutching a bottle of Fiji, if you like.
In 1740, the first commercial British bottled water was launched in Harrogate. By 1914 Harrogate Spring was, according to its website, the largest exporter of bottled water in the country, “proudly keeping the troops hydrated from England to Bombay”.
In the early 20th century, however, a water revolution nearly killed the nascent business. After early attempts in Germany and Belgium to chlorinate municipal drinking water, a typhoid epidemic in Lincoln in 1905 prompted the public health crusader Alexander Cruickshank Houston to try out the first extended chlorination of a public water supply.
His experiment worked, and soon, chlorination of municipal water had spread around the world. In 1908, Jersey City became the first US city to use full-scale water chlorination, and the practice quickly spread across the country.
The bottled water industry almost collapsed as a result. In the past, buying clean water had been a necessity for the rich (the poor simply endured centuries of bad drinking water, and often died from the experience).
Now it was freely available to all. Why would you continue to spend money on something that now came, miraculously, out of a tap in your kitchen? The answer arrived in 1977, in the form of what must be one of history’s greatest pieces of television advertising narration.
“Deep below the plains of southern France,” rumbled Orson Welles in a voice that sounded as if it were bubbling up from some unreachable subterranean cave, “in a mysterious process begun millions of years ago, Nature herself adds life to the icy waters of a single spring: Perrier.”
As viewers watched the water descend into a glass, and admired the glistening green bottle, marketing history was made. The advert was part of a $5m campaign across America – the largest ever for a bottled water – and proved a major success.
From 1975 to 1978, Perrier sales in the US increased from 2.5m bottles to more than 75m bottles.
The Perrier triumph was part of “a perfect confluence”, Salzman told me, of a sudden craze for aerobics in the US, prompted, in part, by Jane Fonda releasing her first exercise video – Jane Fonda’s Workout, the highest-selling video of all time – in 1982. There was a new drive not just to be healthy, but to be seen to be healthy.
In 1985, Time magazine noted that “water snobbery has replaced wine snobbery as the latest noon-hour recreation. People order their eau by brand name, as they once did Scotch.”
Soon enough, rumours circulated of Madonna bathing in bottled water, and Jack Nicholson was photographed brandishing a bottle of Evian at the Oscars as if it were Cristal. There was also a key practical innovation: in 1977, plastic or PET (polyethylene terephthalate) bottles were introduced into the soft drink market.
By 1990, they were being used for bottled water, making it as convenient and portable as a fizzy drink. The big soft drink brands, spotting the obvious commercial opportunity, soon launched their own waters: PepsiCo’s Aquafina in 1994, Coca-Cola’s Dasani in 1999, and Nestlé’s Pure Life in 2002. Water was back.
Water’s glorious renaissance wasn’t just about fashion or convenience. Bottled water can be marked up like no other substance on earth. The £1 that a bottle of water often costs could pay for around 1,000 gallons of tap water.
Some waters – Evian, Perrier, Highland Spring and Harrogate Spring – come from natural sources, so at least you feel you’re paying for geography, for the fantasy of a shepherd sitting on a rock catching the icy flow in a glass jar specifically for your pleasure. But plenty of bottled waters are simply refashioned tap water.
In February 2004, Coca-Cola attempted to launch Dasani in the UK. (“Dasani”, by the way, means nothing.) Five weeks later, the company took all 500,000 bottles off the shelves after headlines such as the Daily Star’s “Are They Taking Us For Plonkers!” Coca-Cola had followed its successful strategy in the US and purified tap water, added some mineral salts, and was selling it for 95p a bottle.
The company hadn’t, however, accounted for Britain’s long memory for sitcom storylines – in this case, the episode of Only Fools and Horses when Del Boy and Rodney bottle tap water in their flat and sell it as Peckham Spring.
Then there was the issue of a batch of minerals contaminating Dasani with a possibly carcinogenic bromate. In a little more than a month, Dasani was dead.
Ten years later, Coca-Cola launched a new bottled water in the UK. In the intervening decade, the industry, after a brief dip following the 2008 financial crash, had entered its hyperactive new phase.
Vita Coco – one of the first of the “new” waters – came to the UK in 2009, and in its wake soon appeared a flotilla of further coconut waters (the coconut water market is now worth £100m in the UK).
The industry received a further boost this year from the former chancellor George Osborne, who announced a sugar tax on soft drinks in his final budget. As the “plain” bottled water market continued to expand, new inventions began to spring up.
“Strong established growth leads to offshoots,” explained Richard Hall, chairman of Zenith International, a market research company that organises the annual and thrillingly named Global Bottled Water Congress. Water had begun its reinvention: enter maple, birch, energy and even ocean.
Coca-Cola’s new water is called Glacéau Smartwater. The water, which comes from a spring in Morpeth, Northumberland, is “vapour distilled”, then injected with electrolytes. In other words, the water is evaporated and then condensed again, a process Coca-Cola describes as being “inspired by the clouds”.
Ten years ago, this, surely, would have got the Peckham Spring treatment from the media. But we live in new times. Glacéau Smartwater is now worth £21.9m, and, earlier this year, Coca-Cola announced an investment of £15m to expand the factory where it is produced. At present, it turns out 56,000 bottles of water per hour.
If the last decade witnessed water’s great commercial expansion, 2016 could perhaps be defined as the year the market lost its mind. There now seems to be no limit on what a water can be, or what consumers are willing to buy. It is no longer enough for water to simply be water: it must have special powers…….