India has the world’s largest population that has limited access to clean drinking water. As the government fails to fulfil the need for safe drinking water, private firms have created a robust bottled water business resulting in a rise of the bottled water market in the past few decades. More importantly, we are seeing a rise in plastic packaging. Plastic bottled water reached a market size of Rs 16,000 crore in 2018 and is estimated to touch the Rs 40,000 crore-mark by 2023.
Though most of these PET (a type of plastic) bottles are 100% recyclable, inadequate recycling facilities pose an overwhelming threat to the environment. It is estimated that only 9% of the plastic produced has been recycled till now, leaving the vast majority of 91% to be accumulated in landfills or oceans. According to recent reports, plastic bottles and bottle caps are ranked as the third and fourth most collected plastic trash items. With numerous studies and alarming statistics surfacing every day, we have tried to turn the lights on plastic water bottles’ environmental impact.
Resistance of Brands
Realising the destructive potential of plastic bottled waters, the government has actively pushed bottled water manufacturers to shift to alternative eco-friendly packaging materials (terra pack, aluminium, paper, or glass). A complete ban is highly complicated as it involves shutting down a Rs 30,000-crore industry. Instead, the government has developed policies to ensure that brands and manufacturers follow responsible disposal and recycling mechanisms. These reliable and affordable recycled packaging options are not taken seriously by the packaged drinking water industry. They resist citing the complications involved in shifting to such alternatives in the immediate future.
The industry also opposed the classification of packaged drinking water bottles as “single-use plastics,” quoting their recyclable nature. This kind of resistance and wilful dismissal comes in the face of a plastic water audit report naming Coca-Cola, PepsiCo and Nestle — the parent brands of Kinley, Aquafina and Nestlé Pure Life, respectively — as the most polluting beverage brands. Though these brands are taking small steps such as using recycled PET (rPET) as the primary sustainable packaging alternative, they are merely targeting 25% rPET in their packaging by 2025.
It’s not just the national brands but even the organised local brands and unorganised brands pay scant respect to the environmental degradation caused by plastic bottles. Both of these groups hold significant market share. Organised local brands such as Golden Eagle, Pristine and Rivano have a strong hold in a few tier-2 and 3 cities. The focus on sustainable packaging is even lower here as compared with tier-1 cities. Adding to it, the government’s restrictions on plastic production and usage seem to apply mostly to national brands. As a result of both these factors, no real sustainability efforts are seen from such local brands that comply minimally with government-enforced standards.
If we consider the unorganised brands, the situation is much more disheartening. Unorganised brands fail to meet sustainability standards. Still, they often imitate the product name and packaging of significant players (Birseli, Kenbey, etc) and sell low-quality water affecting the brand value of original brands. The local markets’ unsustainability practices present an opportunity for organised national brands to distinguish themselves with eco-friendly packaging. This may prompt smaller brands to also consider better packaging seriously.
To highlight the environmental (un)friendliness of the brands we mostly consume, we conducted a small study. We scored brands on their green marketing, sustainable sourcing, and packaging and its sustainability targets. We had sustainability scores for 12 major packaged drinking water and natural mineral water brands with presence across India. We find that natural mineral water brands (protected natural water without chemical treatment) like Vedica, Evian and Aava are more concerned about sustainable packaging than packaged drinking water brands like Kinley, Bisleri or Bailey. We mapped these sustainability scores against their prices. (See Figure 1)
We find that majority of the brands crowd at lower price ranges with poor sustainability scores. Firms targeting price-sensitive segments believe that unless consumers are willing to pay more for recycled bottles, higher proportions of recycled PET cannot be used in packaging as it is costlier than virgin plastic (newly created plastic). The non-treated natural water brands with higher sustainability scores are primarily targeted at consumers who are willing to pay a higher price. For instance, recently, Fabonest Food and Beverages Pvt Ltd launched India’s first spring water beverage called Responsible Whatr in a sustainable and endlessly recyclable aluminium can. These cans are priced at Rs 60 for 500ml.
Similarly, brands like Aava have glass-packaged bottles priced at a premium. Aquafina and Dasani (a subsidiary of Coca-Cola) aluminium cans in the US markets tend to comply with their eco-friendly packaging norms. Also, Coca-Cola recently unveiled its paper bottle prototype, opening a new world of packaging possibilities. However, these options are cost-intensive because aluminium/glass/paper packaging incur high production and logistics costs.
The plastic bottled water problem is not unique to India. Several countries have employed returnable and reusable bottles, which are used to refill water up to 15 times before recycling. This initiative results in the reduction of the volume of water bottles produced. Despite that, companies are suggested to rely on single-use plastic bottles mostly. This is because the price of new plastics is almost half the price of the most common recycled plastic. A recent expose by NPR and Frontline showed that oil companies gain from flooding the market with new plastic.
More specifically, packaged bottles’ recycled plastic is now 83% to 93% more expensive than new plastics. Since firms fear that even small price changes may significantly affect the market share of this price-competitive industry, they are reluctant to switch to recycled plastic. This restricts brands from taking any sustainability steps. In short, the firms have concluded that market opportunities for sustainably packaged bottles in the price-sensitive segment of India are relatively weak and economically unviable.
However, we believe if a firm positions itself on the environmental-friendly aspect, they may be able to raise their price slightly and attract a segment of loyal environmentalists. Increasingly, millennials and Gen Z, who may be better known as Gen C or Generation Climate Change, have become vocal about environmental degradation and the role of plastics in accelerating the process. This growing and vocal population deserve better options.
Time to Act
While many people expected the environment to heal during the lockdown, early studies portray a different picture. The increased safety concerns of people led to the rise in single-use, disposable plastics. We are going through a plastic pandemic alongside the health pandemic. A significant proportion of plastic pandemic is caused by the tremendous increase in disposable single-use plastics like plastic drinking bottles and caps, polythene bags, food wrappers, masks among other things.
A staggering 47% increase in single-use plastics has been observed in Mumbai, Bengaluru, Delhi and Pune. A gradual shift towards recycled PET bottles may be happening in the packaged drinking water industry. Still, the alarming levels of plastic consumption highlight the urgent need for a sustainable alternative. New or established brands that offer a safe and sustainable bottled water will attract the growing segment of consumers who care about the environment and do not mind making environmentally friendly products a share of their wallet.
We are in the era of sustainable packaging innovations such as bioplastics from renewable plant materials or compostable non-plastics. But we are running out of time, and we cannot wait for policymakers or brands to step in on our behalf and make amends.
The recent floods in Hyderabad can also be attributed to the increasing plastic waste. Plastics act as an obstacle to gushing rainwater and choke the small diametre pipes leading to waterlogging and destructive overland flow. Also, the holding capacity of lakes has dramatically reduced over the years with all the industrial waste and plastic sewage being accumulated in the lakebeds.
It is time to act against single-use plastics and save our planet. This can be achieved by increasing environmental awareness, using refillable products instead of disposable plastic products and proper disposal of plastics to help build a better ecosystem.
(Vaddi Veda Vyshnavi and Vankodoth Avinash are MBA students and Akshaya Vijayalakshmi is Assistant Professor (Marketing) at the Indian Institute of Management Ahmedabad)
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