An Economic and Environmental Case for Acting Against Bottled Water Packaging, Labelling and Marketing in the UK

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This policy paper (produced in partnership with Brita) highlights the impact of the bottled water industry's packaging on the planet, the implications for the future, recommendations / strategies for battling the impact and includes two case studies on companies that have already taken steps towards reducing the plastic waste produced by the bottled water industry.

Below are some exerts from the paper, download the full paper to access even more insights and data.

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What can you get from this report?

A deeper understanding of the bottled water industry
Case studies on two organisations that have already made an impact in reducing plastic waste
Data and insights on how the plastic bottle industry has affected the planet and how it will in the future
Strategies to implement to help battle the bottled water industries negative impact
Consumption trends split by different factors
An understanding of how advertising has impacted UK water bottle sales
And more!

Contents:

Executive Summary
Section one: The world is losing the war on climate change
Section two: The creation of the Bottled Water Industry
Section three: The UK Bottled Water Market Today
Case Study: Whale and Dolphin Conservation (WDC)
Section four: Consumption trends in bottled water
Case Study: Refill
Section five: Calibrating the impact of advertising on UK bottle water sales today
Section six: The environmental cost of bottled water
Section seven: What is the solution?
Section eight: Key Policy Recommendations

Executive Summary

Our research showed that consumers buy bottled water just as much for the convenience and availability (if not slightly more), as for the taste and the quality of the water itself. In general, consumers don’t have much brand affinity; and when it comes to making informed choices, most consumers admit they don’t really know what mineral water is compared spring water.

The environmental case against bottled water is not new, but mounting pressure has elevated its importance as a national (and international) issue to solve in the context of combatting climate change and striving for environmental sustainability.

The rapid growth of the bottled water market has brought attention to the impact of plastic PET bottles, longer physical supply chains, and modern marketing practices. To address the environmental concerns about the industry, efforts will likely focus on: (1) increasing bottle recycling, reducing plastic waste, and promoting personal reuse; and (2) implementing restrictions on marketing and labelling.

Our calculations suggest 90% of all bottled water on supermarket shelves is being offered in a multi-pack format, with 80% of the bottles being singleserve portions of 500ml or even less. Currently in the UK, annual industry sales tip £1.6bn or 2.5 billion litres. This means 10 million PET bottles of plastic water are being sold per day, using 1 million pieces of flexible plastic wrap – almost none of the latter being recycled. Laid end-to-end, this would circle the world at the equator ten times every year.

Our research found over three quarters of consumers (77%) thought that bottled water companies should do more to raise awareness about plastic pollution when advertising, and two thirds also agree that labelling on bottles should draw attention to the carbon cost of consumption.

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Section one: The world is losing the war on climate change

Humanity’s battle against climate change has reached a critical juncture. In March 2023, the UN Intergovernmental Panel on Climate Change (IPCC) warned of a rapidly closing window of opportunity to ‘secure a liveable and sustainable future for all’ that would depend on ‘choices and actions implemented in this decade’ and which would have ‘impacts now and for thousands of years.’

UN scientists also noted that climate change is ‘already affecting many weather and climate extremes’, and that ‘global warming will continue to increase in the near term’, with ‘roughly half of the world’s population currently experiencing severe water scarcity of at least part of the year’.

Adverse impacts from human-caused change will intensify.

- UN INternational Panel on Climate Change 2023

Indeed, the true scale of the world’s carbon challenge becomes clear when looking at what has happened to CO2 emissions in recent years in the countries which are currently the world’s top-ten emitters. Since 1990, these ten countries haven’t reduced their emissions – they have increased them, and by a staggering 84% (Fig 1).

Figure 1: % change in CO2 emissions from 1990-2021 from today's biggest national emitters

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Source: Our World in Data

Section two: The creation of the Bottled Water Industry

Bottled water: a long-term case study on the effectiveness of marketing.

The bottled water brands we see on supermarket shelves and in restaurants today are some of the oldest established companies and brands in the world. Pre-dating even the big French brands, Harrogate Spring in North Yorkshire traces its roots as far back as 1571, making it even older than the East India Company (1600). In France, Evian (established in 1829) pre-dates the world’s oldest luxury brand, Hermès (established in 1837), while Perrier (1863) and Vittel (1854) both predate Ford (1903). A relative newcomer in comparison, even Volvic has been in existence now for more than a century (1922).

Statistically, the growth of the bottled water market since the beginning of the late 1960s has been astonishing. In the US, bottled water consumption per person has risen by a cumulative 640% since 1985. In France, the home of Evian and Volvic, it rose from just six litres per person per year in the 1940s, to 140 litres by 2015 – a 2,200% increase (Brei 2018). But in some ways, it is the UK that has seen the most spectacular growth. In the mid-1970s, UK consumption per head was equivalent to just one 330ml can. Today’s biggest selling domestically sourced water – Highland Spring – was only formed as recently as 1979 (in contrast to the big French brands). By 2021, we consumed 37 litres per head – total category growth in excess of 10,000%.

Advertising and marketing within the industry has evolved. There is a wealth of literature that demonstrates the impact of advertising on purchasing decisions (Bagwell, 2007); and during the early years, millions of pounds were employed in expansionary tactics to establish a market for consumption.

Advertising and marketing aside, the bottled water industry has benefited from a number of other significant industry boosters, some unique to it (e.g. personal fitness boom, the hydration movement) and some applicable to business generally (e.g. use of plastic, free trade, falling long-term transportation costs and sophisticated supply chains).

Bottled Water Industry

- These Industry Boosters are explored in more detail in the paper

Section three: The UK Bottled Water Market Today

The bottled water market is estimated to have generated £1.6 billion in annual sales in 2021, from a total of 2.5 billion litres of product. This equates to an 18% share of the estimated market for total soft drink sales. By bottle type, 96% of bottled water sales comprise plastic bottles, while 78% of total sales were for still as opposed to sparkling water.

With an average bottle size of 700ml (median = 500ml), annual UK bottled water sales of 2.5 billion litres equate to 3.5 billion plastic bottles. This equates to virtually 10 million units sold per day. And with an average pack size of ten on typical supermarket shelves, 3.5 billion plastic bottles equate to 350 million pieces of multi-pack plastic wrap sold per year, or 1 million per day. Virtually none of this plastic wrap is currently recycled in the UK.

Laid end to end, the 3.5 billion PET bottles of bottled water sold annually in the UK would stretch around the world at the equator ten times.

Figure 3: UK bottled water sales, values (£m) and volumes (litres millions)

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Source: British Soft Drinks Association

Case Study: Whale and Dolphin Conservation

Whale and Dolphin Conservation (WDC) is the leading charity dedicated to the protection of whales and dolphins. Through their extensive involvement in international bodies, consultations, and support for legislative measures, WDC is committed to reducing the impact of plastic pollution on the marine environment, striving to create a world where every whale and dolphin is safe and free.

One significant organisation WDC collaborates with is the International Whaling Commission (IWC). As the forum where the governments of the world make decisions about the conservation and welfare of whales and dolphins, the IWC has a key role to play in understanding and addressing the impacts of plastic pollution on marine life.

In addition to its involvement with organisations such as the IWC, WDC also actively engages with national consultations regarding plastic reduction measures, with the aim of influencing policy changes that promote sustainable practices. An example of this is WDC’s contribution to the plastic bag charge consultation. Launched by the then UK government on 27 December 2018, the consultation proposed an extension of the charge to all retailers, and an increase of the charge to 10p per bag. The outcome of the consultation, published on 31 August 2020, confirmed that, starting from 1 April 2021, the charge would be extended to all businesses of any size supplying goods, with the fee raised from 5p to 10p per bag.

Furthermore, in January 2023, the UK Government announced a forthcoming ban as a result of a consultation on commonly littered plastic items. Set to take effect in October 2023, the ban – which includes items such as plastic plates, trays, bowls, cutlery, balloon sticks, and specific types of polystyrene cups and food containers - is an important step towards reducing plastic pollution and, therefore, creating a safer environment for marine life.

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Section four: Consumption trends in bottled water

Within the UK beverage market, bottled water has emerged as a focal point where consumer preferences clash with environmental concerns. This focus is set against a backdrop of ever more sophisticated advertising techniques leveraging deep psychology and technology.

Our research includes results from a comprehensive study of over 2,000 nationally representative households, which provide a detailed examination of underlying behavioural trends. This dataset is rich with information about purchasing habits, preferences, and demographics, and is invaluable for capturing nuances within the market.

Bottled water consumption is widespread across the UK. Our research found that over half of consumers (51%) say that they consume bottled water about once a week or more.

The frequency of consumption was highest amongst millennials (25-44 years old), with weekly figures rising to 61% for this group, compared with just a third for consumers aged 65+. Most notable is the drop-off in consumption in older age cohorts, which is likely a function of both disposable income (more time spent at home), and that the bottled water market was still dormant when todays 65+ age cohort were in their 20s and 30s. In other words, younger adults today can be expected to consume more bottled water in their later life, all things being equal.

Figure 5: Bottled water consumption per capita and by age

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Source: Retail Economics

Other factors analysed in this section include:

Consumption location
Motivations for bottled water consumption
Advertising's effect on consumption
Environmental concerns impact on consumption
Who should be primarily responsible for reducing the environmental footprint for bottled water?
Package sizes and associated multi-pack plastic wrap
The UK bottled water market in a global context
What are the medium-term prospects for UK bottled water today?

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Download: An Economic and Environmental Case for Acting Against Bottled Water Packaging, Labelling and Marketing in the UK report

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Case Study: Refill

Refill is an award-winning behaviour change campaign to help people live with less waste. By providing a framework and platform for communities, businesses and consumers to take action, the campaign supports the transition towards reuse systems and tackles the global issue of plastic pollution by reducing waste, whilst empowering individuals, community groups, local authorities, and governments to drive lasting change in their communities by reducing single-use plastic. With the support of local volunteers, Refill Schemes, and International Delivery Partners, the campaign facilitates action at a grassroots level.

Across the United Kingdom, over 400 community and council-led schemes are committed to waste reduction in their local areas. Among these, 88 Refill Schemes are led by councils, demonstrating the campaign’s widespread impact and involvement. An astounding 89% of Refill Schemes report that their “involvement with Refill has helped deliver a positive environmental impact” within their communities.

The Refill campaign formed an integral part of the Turning the Tide project in Bournemouth, Christchurch and Poole. This partnership with the local council helped to transform 14 miles of coastline into a low-impact tourist destination by reducing single-use plastic on its beaches, and saw Refill working with MIW Water Cooler Experts to install new fountains to help residents and visitors stay hydrated and prevent plastic pollution caused by the millions of bottles of water bought every year. Free drinking water is now provided at over 150 locations, including 18 seafront kiosks, more than 130 existing beachfront taps, and 15 newly introduced “Hydration Stations”, with brightly coloured, fun and engaging signage directing people to refill at them.

All 150 water Refill Stations across the Bournemouth, Christchurch, and Poole (BCP) seafront have been added to the Refill app, bringing the total amount of Refill Stations in the BCP area to over 400. Encouraging visitors at the beach to remember their reusable bottles and refill at one of the now easy-to-find Refill Stations means less bottles of water are sold – and less empty bottles end up on the beaches, streets and in the sea. This partnership helped to stop 19,000 single use plastic bottles in July 2022 alone!

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Section five: Calibrating the impact of advertising on UK bottle water sales today

As we have already highlighted in Section 2 of this report, promotional activity was pivotal to the establishment of bottled water as a distinct product category within Food and Drink. Today, the advertising activities of the major brands seem – at least on the surface – to be much more passive, protecting the category in the face of environmental headwinds as much as growing it further. Partly, the big brands themselves are at least somewhat conflicted in terms of bottled water growth since it might impinge on their higher-margin sales in other neighbouring categories (this is most obviously true with respect to CocaCola and Pepsi, but also applicable to Danone and Nestlé at least to a degree).

We examined recent weekly trends with respect to bottled water advertising and product sales using a Bayesian Marketing Mix Model (MMM) over the period March 2020 to December 2022 – almost three years. This model is a flexible statistical regression model which accounts for the historical relationship between marketing spend and sales; it then uses this information to estimate the contribution of each marketing channel to overall sales of bottled water. The regression analysis considers the spending levels of different advertising channels (e.g. TV, radio, digital), external factors such as seasonality (e.g. effect of holidays and time of year), as well as macroeconomic factors (e.g. COVID restrictions).

Initial research highlights a strong correlation between advertising and sales (Fig. 13), with the industry doing the majority of its advertising in the summer months as sales pick up with rising temperatures.

Figure 13: Indexed water sales against standardised ad spend

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Source: Nielsen, Nielsen IQ

Advertising is likely to contribute to sales over 413 million bottles of branded water in just five years.

Including our forecast period and applying this from 2022 to 2026 (5-year period), advertising is likely to contribute to sales of over 413 million bottles of branded water in just five years.

Despite the plastic waste, bottle water still seems to position itself as ‘good for the environment’

Promotional activity around consumer products comprise various product claims and suggestions, which for bottled water are predominantly environmental in nature, including those on the face of the bottles themselves. To better understand these claims we looked more carefully at the messaging on bottle packaging designs from eight popular UK brands.

Despite the fact that these eight brands belong to just five parent companies, we failed to find a single, standardised point of similarity between them (other than the word ‘water’) in terms of how they are described – even the units used to describe bottle size. As such, there is practically no way for consumers to quickly and accurately assess the various product claims, never mind rank them in any meaningful way. And this remains true even when consumers are prepared to invest the time to research the brands further online.

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Section 7: What is the solution?

In recent years, the UK Government has taken a range of policy measures to address perceived harms associated with specific products. Some initiatives have focused on safeguarding individuals from self-harm (e.g. smoking, drinking and gambling), while others have broadened their scope to encompass wider societal issues (e.g. financial strain on the NHS from obesity, child abuse resulting from alcohol misuse). In the past fifteen years, UK policymakers have increasingly ‘nudged’ consumers to take actions deemed beneficial, either for their own well-being or for the greater public interest.

It’s vital to acknowledge that in all these instances, consumer laws have been enacted to protect consumer rights and interests. These laws serve as a protective framework in a marketplace where the companies that individuals interact in, wield significantly more power. Furthermore, efforts have been made to enhance information disclosure during important transactions, ensuring greater transparency for all parties involved.

Examples of policy measures:

The traditional domains - tobacco and alcohol
Measures to help consumer awareness of their carbon footprint
Investment in refill stations
Present-day action - Calories, Carrier bags and Cotton buds

(These policies are explained in greater detail in the paper)

New guidance on environmental claims -

The Advertising Standards Authority and the Competition & Markets Authority have both recently promulgated new guidance regarding environmental claims that companies make about their product and services, explicit and implicit. Of particular concern to us are the following principles and advice:

‘Claims must not omit or hide important relevant information’ (CMA Guidance 2021)
‘Claims must consider the full life cycle of the product or service’ (CMA Guidance 2021)
‘Avoid using unqualified ‘carbon neutral’, ‘net zero’ or similar claims’ (CAP Guidance 2023)

What kind of policy strategy works? -

As we previously outlined in Section 1, there are significant and rising doubts regarding the ability of any single policy measure (tax-related or otherwise) to act as a ‘magic bullet’, allowing countries to hit their net-zero commitments. Instead, action is necessary on multiple fronts, with urgency being critical.

Evidence suggests that consumers alter their spending habits in response to clearer product labelling, partly because they otherwise seem to underestimate emissions associated with food and drink (Camilleri et. al., 2019). Traffic-light style environmental labelling successfully triggered more environmental product choices in a virtual reality setting at least (Arrazat et. al., 2023). Consumers also support labelling changes that allow them to make more informed buying choices according to our data.

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Section eight: Key Policy Recommendations

We hereby set out our proposals for bottled water grouped under four broad headings:

Packaging Restrictions
Labelling Restrictions
Promotional Restrictions
Accelerate existing committments

Packaging Restrictions -

With 90% of the bottled water on our supermarket shelves being encased in plastic wrap (flexible, largely nonrecyclable, multi-pack associated), it is time to see this plastic wrap for what it really is – a carrier bag (some SKUs even come with handles).

As such, multi-pack plastic wrap should be taxed (at 10p per item) under suitable amendments to the Single Use Carrier Bags Charges Order 2015, or it should be banned under amendments to Environmental Protection (Plastic Straws, Cotton Buds & Stirrers) Regulations 2020. Of course, when it comes to carrier bags, consumers pay the tax when they purchase one, whereas with bottled water the item is automatically attached and non-removable prior to sale. Perhaps, like the Soft Drinks Industry Levy, the government might propose to tax the consumer at the point of sale unless the industry has reformulated the product (packaging in this case, rather than ingredients per the Soft Drinks Industry Levy) prior to the introduction of the levy

We also suggest that the industry be challenged to reduce the proportion of its sales accounted for by single-use bottles, especially with respect to non-sparkling water. Currently, we see no reason why the industry should be selling more than one-third of its product in 500 ml bottles in less than three years from now, especially considering what consumers indicated regarding their bottled water drinking habits when surveyed (mostly at home or at work).

Labelling Restrictions -

In his recent ‘Mission Zero’ Report, Chris Skidmore MP set out among his 129 recommendations, a goal for industrial product ecolabelling starting by 2025 (e.g. paper, glass), and that “government should continue to work with the industry” with respect to food ecolabelling. These are commendable and important goals, although the historical reality of food labelling systems (e.g. so-called trafficlight systems) suggests the road to final implementation will be long and arduous, certainly far beyond 2025 based on historical evidence.

Our own research also found that over two-thirds of consumers thought that there should be a label on single-use plastic bottled water to inform them of the environmental impact.

We see four main areas in which labelling will help support environmental objectives:

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Environmental Awareness

Informed Consumer Choice

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Encouraging Industry Accountability

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Driving Market Transformation

(These four areas are explored in more detal in the paper)

Promotional Restrictions -

We propose that the Advertising Standards Authority (ASA) and Competition & Markets Authority undertake an immediate review of the explicit and implicit environmental claims and credentials proffered by bottled water manufacturers. This is in context of the negative environmental impact of their industry on society, and also in light of existing ASA rules in place regarding environment claims in particular.

After all, the whole of the bottled water industry is estimated to produce 4.0 billion bottles in 2022, with the majority either ending up in land fill or the incinerator. In addition, our research shows that advertising contributes directly to further the growth of the industry which causes further negative externalities.

The bottled water industry produced an estimated 4.0 billion bottles in 2022, with the majority ending up in land fill or the incinerator.

Accelerate Exisiting Commitments -

We strongly suggest that the UK government should accelerate the existing commitments to the Resources & Waste Strategy, Deposit Return & Extended producer responsibility schemes. In light of a series of delays, these commitments should be prioritised and legislation implemented as a matter of urgency to reflect the environmental cost of the industry on society.

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About this report

This policy paper: "An Economic and Environmental Case for Acting Against Bottled Water Packaging, Labelling and Marketing in the UK" is published by Retail Economics in partnership with Brita.

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