Food and Beverage Companies Wake Up to Water Risks

Drip irrigation can help farmers get more yield per drop, a crucial solution to meeting food needs as water stress expands around the world.  Photo: National Geographic.
Drip irrigation can help farmers get more yield per drop, a crucial solution to meeting food needs as water stress expands around the world. Photo: National Geographic.

Last week, Starbucks announced that it would stop sourcing and producing its bottled water brand, Ethos Water, in California and shift production from the Golden State to Pennsylvania.

In explaining its decision, the beverage maker cited “the serious drought conditions and necessary water conservation efforts.”

With California in its fourth year of a historic drought, Starbucks has been called out for tapping springs in severely drought-stricken Placer County, which last month declared a water-shortage emergency.

The company faced not only the risk that its water supply might shrink, but that its reputation could be badly tarnished if it did not act.

Starbucks is by no means alone. Drought and water stress are affecting the decisions and bottom lines of a growing number of companies.

Last month Coca Cola decided not to proceed with an $81 million bottling plant in southern India due to local farmers’ concerns about groundwater availability. Food giant Cargill reported a 12 percent drop in profits for the fourth quarter of 2014, citing drought damage to pastures used to raise beef in the western United States.

With one-third of the world’s food now grown in areas of high or extremely high water stress, companies are waking up to water risks.

But most are doing far too little to respond to these risks, according to a new study by Ceres, a Boston-based non-profit that aims to mobilize corporate and investor leadership on environmental sustainability.

With water stress spreading across the globe, diversifying geographic locations is often no longer the most sensible or cost-effective response, Ceres concludes.

Rather, companies must build water security proactively by working to reduce water use not only within their own production —> Read More

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