Starbucks patrons are being assured that they can now help disadvantaged children “get clean water” with the simple purchase of a $2.35 bottle of Ethos-brand water.
Yet some are questioning the altruistic motivations of the brand.
Offered in Starbucks coffee shops across North America, including in Whitehorse, Ethos Water claims to “help children around the world get clean water” by donating 10 cents (5 cents in the US) from every bottle sold to humanitarian water programs in Africa, Asia and Latin America.
Started in California in 2003, Ethos Water was acquired in 2005 by Starbucks Coffee, which soon entered into a joint venture with PepsiCo to give the beverage wider retail distribution.
The company aims to raise more than $10 million for water relief projects by the year 2010.
To date, Ethos has already raised $6.2 million, which it estimates has already helped 420,000 people worldwide.
“I don’t like to talk bad about a company that’s at least trying to do something good, because the reality is at least they are giving something back,” said Kori Chilibeck, CEO of Earth Water, an Edmonton-based bottled-water company that donates 100 per cent of its profits to UN-run water programs.
However, Chilibeck criticized the imbalance between Ethos Water’s charitable donations and its incoming revenue.
With every bottle sold in Canada generating a 10-cent donation, and every bottle sold in the United States generating a 5-cent donation, Ethos will have to sell between 100 million and 200 million bottles to meet its stated charitable goal of $10 million by 2010.
These sales will mean between $225 million and $350 million gross revenue for Ethos Water.
“They’re really taking a cause, and using it to market for huge profits,” said Chilibeck, who estimated that it costs Ethos Water roughly 14 cents to produce a single bottle of its product.
And in today’s marketplace, there’s no smarter business move than taking up a cause.
“We’ve run tests: You put our bottle next to Dasani, Evian or whatever, with a poster describing what (Earth Water) is doing, and we’ll outsell them every time — sometimes nine to one,” said Chilibeck.
In an essay by the Polaris Institute, a Canadian think-tank, bottled-water companies were accused of exploiting consumer conscience to recapture consistently falling bottled-water sales.
Others question the wisdom of the global water crisis being addressed by bottled water manufacturers — the very industry perceived as a root contributor to water access deficiencies worldwide.
“Bottled water is the most obvious example of the commodification of water,” said Meera Karunananthan, water campaigner for the Council of Canadians, an Ottawa-based advocacy group.
Water privatization by beverage companies in many Third World towns has led to locals losing public control of their water resources, said Karunananthan.
“The bottled-water industry may not be perfect, but if you can take a sliver of the industry and turn it towards something positive, that’s a good thing,” said Ethos Water founder Peter Thum in an interview with Business Week.
“The most important thing is to start a dialogue and to get people in the US to start thinking about the world water crisis, not just as something that affects people far away but as a problem that we will face soon as well,” he said.
“It seems great that they’re trying to help, but sometimes we feel that it muddies the waterfront a little bit,” said Chilibeck. “People say, ‘Hey, Ethos is helping,’ but (Earth Water) is able to do so much more,”
“If we could just get some momentum, and become a bit more successful, we can do 10 times more than Ethos could ever do — and you’re not feeding the pockets of Starbucks shareholders more than you’re feeding the people of the world.”