Bottled Water Industry Targets a New Market: The Global South
Stay up to date with the latest headlines via email.
Recent industry analysis shows that countries in the Global South have the best potential for future growth in bottled water sales. Market reports predict that over the next four years sales of bottle water will grow most quickly in Asia and Latin America due to 'the poor quality of potable water' in many countries. Africa is also highlighted as a having strong potential for bottled water sales due to unsafe drinking water. In addition to limited access to clean tap water, reports mention the rising number of people with disposable incomes as a driver for growth in the industry. This is all very positive for bottled water companies, but signals a wrong turn in the struggle to bring publicly managed municipal water service to communities and will have severe impacts on how populations view the delivery of this basic human right.
This opportunity for the bottled water industry is leading to widespread privatization of drinking water delivery in countries where access to clean tap water is limited. Bottled water sold for huge profits may bring water to people who need it, but the side effect is the commodification of this basic human right. When populations find that the only way to access drinking water is to buy it in a packaged form, people will come to accept that water, whether from a tap or from a bottle, is something that can be bought and sold on the open market. A system is emerging where only those who can afford it will have access to water. The privatization of drinking water is already well under way in many urban centres in the Global South. In areas where clean tap water is either not available or not safe (or perceived to not be safe) people are already consuming packaged water supplied by for-profit producers at an alarming rate.
Beverage corporations are seeing this phenomenon as a future growth engine. In April of this year at the company's Annual Meeting of Shareholders, Coca Cola's CEO, Muhtar Kent (click here and go to 30:00 of the webcast), repeated the company mantra that future growth will come from a combination of rapid urbanization and a growing middle class. Kent spoke of the 'conversion' from un-packaged beverages to packaged beverages that occurs when people attain 'middle class.'
The natural 'conversion' as Kent sees it, is for people to move away from public tap water towards his company's bottled beverages. Luckily for Kent his company has set up a global bottling system that is poised to jump on this opportunity. The other three global bottled water giants, Groupe Danone, Nestlé and PepsiCo also have the capital and existing global infrastructure to exploit the bottled water boom in the Global South. The following examples from India, Vietnam, Nigeria and México, demonstrate how the rapid growth of bottled water sales is already forging the path towards privatization and is creating risks to health and livelihood along the way. These examples do not touch the severe impact the bottled water industry has on the environment in the Global South caused by water takings and the disposal of plastic bottles.
The first example is from Hyderabad (pop 8.8 million), the capital of Andrha Pradesh, where The Hindu recently reported that 'unscrupulous elements are making mega bucks out of human suffering' by selling 20 litre cans of well water for 31 cents (the price goes up to $2.80 USD with the can included). According to The Hindu the areas where business is swiftest have major problems with public water infrastructure. Long lines at public taps and limited public water service to many homes results in a daily struggle for people to find water. Many are resorting to buying their drinking water from local vendors who package well water and sell it at hugely inflated prices. In a country where, according to United Nations data, over 36 percent of urban dwellers survive on less than $1.25 (USD) per day purchasing packaged water is a major expense. However, without access to free and clean public drinking water, and with a convenient packaged alternative readily available, many residents will inevitably accept the option of privatized, for-profit water.