How a company built its biggest business to save a life
Cleaner-beverage companies have long been seen as the last hope for consumers in a world of soaring carbon emissions and declining health and wellness.
But a new report from Bloomberg New Energy Finance (BNEF) suggests that the biggest purveyors of the cleanest water-pumping devices have been building a massive business out of the idea that it’s not just their jobs, but their families, too, that can be saved.
Bloomberg New Energy Financials estimates that water purifiers alone accounted for about $500 billion in annual revenue last year.
The $250 billion market is expected to grow to $1 trillion by 2030, making it the biggest water-purifying market in the world.BNEf, a research and consulting firm that focuses on the global energy market, says the growth of these businesses has been driven in large part by a perception that consumers have lost their ability to make informed decisions about water use.
“Consumers are losing their ability, and their ability in terms of the amount of water they’re drinking, to make an informed decision,” said Mark Zukunft, a co-founder of BNEF and a senior energy strategist at Goldman Sachs.
“We think that there’s a lot of folks who are doing this to get their clients a quick buck.”
The idea is to save their families from the consequences of water-related illness.
BNEf says water purifying devices accounted for $3.5 trillion in sales last year, and the market will reach $3 trillion by 2020.
And while water-intensive industries like power generation and refining have become increasingly prevalent in recent years, these firms continue to play an outsized role in helping people cut back on their water use, BNEFS said.
The companies’ success has been aided by government regulations and incentives, the study found.
Borne out of this success has come some of the biggest, most controversial businesses in water-filtration and other water-disposal, as well as some of its biggest names in the industry.
Beverage company Nestlé has been a big beneficiary, having emerged as a key player in water purification after years of battling regulators.
The company is the largest water purifier maker in the United States, with more than 100,000 customers.
It has spent more than $6 billion in lobbying in recent decades, Bloomberg New Environment reports.
Nestlé is also among the companies that have been fined by the Food and Drug Administration for its products.
The New York Times recently described Nestlé’s efforts to block new water-based treatments as a “witch hunt” that “was the work of a corporate lobbyist with a stake in one of the most profitable industries on the planet.”
“Nestle has a longstanding relationship with the Department of Health and Human Services, which is responsible for regulating the water supply,” the Times wrote.
“That relationship is now at the heart of an ongoing legal battle over Nestlé products.”
In 2010, the company settled a lawsuit filed by the U.S. Justice Department for $7.2 billion.
Nestlé said the settlement did not include any compensation to the U:HHS, but it was able to reduce its fines by billions of dollars, Bloomberg News reports.
“There’s a certain kind of cynicism that these companies are in a race to the bottom,” Zukurft said.
“The fact that these firms have a vested interest in this idea that they can charge as little as possible to consumers and that they’re going to do anything to protect themselves, they think that that’s their business model.”
A study released earlier this year found that nearly 1.5 billion Americans are likely to suffer from a water-borne illness by 2030.
That figure is projected to climb as the nation continues to experience the effects of climate change, according to the New York State Department of Environmental Conservation.BENEF estimates that the clean-water business will grow from $2.4 trillion in revenue in 2015 to $3 billion by 2030 and to $4 billion by 2040.
The market will grow even faster if companies like Nestlé, which sell products for everything from home water filters to toilets, can continue to push the limits of the technologies they developed, BNP says.
The study found that some of these industries have gone too far.
In one example, Nestlé told regulators that it would use more than 1 billion gallons of water per day to purify tap water, and that consumers were paying more than 20 cents per gallon for the same treatment.
“The companies have built a system that is based on the idea of being in control of their own water supply, not about the health and wellbeing of consumers,” Zuke said.