Stocknews.ch. As cities and communities often rely on water from the water table, which in many places has recently been falling, and also because some nations use more water than is naturally replenished, we wanted to speak to Nestle about their activities aswell as their role in the increasingly important water market a.k.a. 'blue gold'. Stocknews.ch: What are the main statistics on Nestle Waters? Nestle: Nestle Waters is the number 1 in bottled water worldwide and is a 100%-owned Nestle company. It has a 18% market share of bottled water and turnover of CHF 8.8 billion. In 2005 48% of the revenues of this division came from North America, 45% from Europe, 7% from the rest of the world. Nestle Water has 30'000 Employees and bottles water in 36 countries in 103 factories. Stocknews.ch: Which are the main Nestle Waters brands? The most well known? Nestle: You will find the following brands in our portfolio: Acqua Panna, Perrier, S. Pellegrino, Vittel, Nestle Aquarel and Nestle Pure Life. Stocknews.ch: How important is the bottled water market in the beverage market? Nestle: Bottled water has become the second sector in volume on the refreshment beverage market, (which includes notably soft drinks, bottled water, fruit juices, dilutables,...), representing over one third of it. 163 billion litres of bottled water were consumed in 2005 around the world, representing approximately 25 litres per capita. Bottled Water Consumption across the globe:
 Above you can see that North America bottled water consumption per head is 85l, Western Europe 111l, Latin America 45l, Africa 12l, Asia 11l Stocknews.ch: The figures are striking above. The southern Hemisphere (Africa, large parts of Asia such as India) drink much less bottled water. How does demand for consumption differ northern vs southern hemisphere? Nestle: In the Northern Hemisphere, the principal factors are the quest for health, well-being and natural products, as well as practicality for people faced with an increasingly nomadic lifestyle. Whereas in the Southern Hemisphere, the need for a safe water source predominates. Stocknews.ch: How has the demand for water been changing since 2000? Nestle: In the past few years, bottled water sales have seen one of the fastest annual growth rates of the refreshment beverage market, and gain each year an increasing share of the refreshment beverage market. For instance, the average annual growth of the total refreshment beverage market between 2000 and 2005 was of 5%, while the average annual growth of bottled water was of 8%, compared with carbonates (colas, lemonades,...) at 2%. Stocknews.ch: How do you see growth rates for the bottled water business in the near future?
Nestle: In the next coming years, growth is expected to remain high at around 7 to 9% annually.
Stocknews.ch: What can you tell us about the history of the Nestle Waters business?
Nestle: Nestlé Waters is actually a young company, created less than 15 years ago, but resting on over 160 years of history at Nestlé. Henri Nestlé, a young pharmacy assistant at the time, establishes his first lemonade and water bottling factory in 1843, abandoning it several years later to focus, most successfully, on food and nutrition. More than a century later, in 1969, the Nestlé group reappears on the bottled water market, first acquiring a 30% interest in the French company, Société Générale des Eaux Minérales de Vittel, and then majority ownership in 1987.
In 1992, after a successful take-over of Source Perrier S.A., Nestlé becomes the leading player on the world bottled water market. Solidly established in a market with good potential for sustainable growth, bottled water becomes a strategic priority for Nestlé from this point on.
Over the next decade, many local bottled water brands join the group, reinforcing its positions around the world. A new development phase begins in 1998: on the one hand, the acquisition of Italy's leading bottled water producer, known by the name of its prestigious S. Pellegrino brand; on the other hand, the launch of the bottled water under the Nestlé brand, Nestlé PURE LIFE. In 2000, whilst continuing to make acquisitions in the highly promising markets of North America and Western Europe in particular, the company implements the multi-site brand concept in Europe, by launching Nestlé Aquarel, in six countries simultaneously. 2000 is also a year of accelerated development in Home & Office Delivery. Within a few months, thanks to targeted acquisitions, Nestlé Waters becomes leader of this new sector in Europe and the Middle East, thus expanding its North American leadership. Stocknews.ch: Does Nestle just bottle most of the water it sells and not actually have the ownership of sources?
Nestle: The majority of our brands are from our "own" sources, that is, sources we manage directly. In very few cases, when considered appropriate for business reasons, we buy water from water systems that are controlled by a third party, mainly local municipalities. In any case, we have a number of processes in place, depending on the type and original quality of the water. All water brands are strictly controlled to ensure that the safety and taste of the water is responding to our consumer’s expectations.
Stocknews.ch: Do you see a risk that Nestle Water Sources start to dwindle, just as oil wells do? Nestle: Actually not. Unlike oil, water is a renewable resource, the quantity of water available on the planet is constant. It responds to what is commonly referred to as the water cycle. The sun's rays cause the evaporation of water from rivers, lakes, oceans and/or the perspiration of all living beings. This evaporation is then at the origin of the clouds. When precipitation reaches the ground, part of it filters into it to rehydrate it and to renew the ground water reserves. The other part flows towards rivers, lakes and the oceans. Water accumulated by infiltration in part rises again to the surface in the form of springs.
Stocknews.ch: How dou you make sure that the water levels remain at a sustainable level?
Nestle: Once a spring source is approved, an extensive long-term monitoring program provides regular data about conditions of the aquifer, the spring itself, nearby wetlands and streams. Our team of geologists closely monitor the data, in conjunction with local regulators, to ensure that the source is maintained with maximum care and environmental sensitivity. We are below the extraction limits provided by the authorities, and Nestlé Waters regularly monitors and re-evaluate the water resources to determine the amount of water that can safely be withdrawn.The monitoring includes frequent testing of the source water quality and regular monitoring of environmental conditions and parameters, such as water levels, spring flow and precipitation.
Stocknews.ch: How would you explain to someone, that Nestle isn't interested in emptying water sources and making a tidy profit in the process?
Nestle: We have no business interest in emptying a water resource! On the contrary, we have vested business interest in protecting both the quality and quantity of water as a renewable resource : Our company's future depends on good stewardship of water resources. For example, one of our International brands, Vittel, celebrated its 150 anniversary 2 years ago. It would not make sense to make the huge investment necesary for a bottled water factory, if we wouldn't very carefully ensure the sustainability of the water resource. Stocknews..ch: Can you briefly explain the history of the highly successful home and office delivery (HOD) of water in 'large' bottles. Nestle: It is indeed a quite successful activitiy and very appreciated! In fact, it was born in the late 19th century, in the USA :in 1894 in Los Angeles, Arrowhead, a small company delivering ice blocks to private homes decided to expand its business. As owner of a glassworks and a spring, it decided to provide its customers with 5 gallon glass bottles filled with natural spring water. The concept developed quickly thereafter throughout the whole North American continent before spreading to the rest of the world some thirty years ago. This way of delivering water is called commonly "Home and Office Delivery" (HOD). This activity of HOD represented almost 16% of the 2005 Nestlé Waters sales.
Stocknews.ch: Where do you currently have HOD-activities for water?
Nestle: Nestlé Waters' HOD activity is present in the United States (notably with Arrowhead), in Europe, in the Middle East and in Asia. Stocknews.ch: What important things must be considered before supplying water this way to clients? Nestle: As this activity is partly a delivering activity, it needs to have a good and dense client basis, to reduce the transportation. For this reason, we are only present in countries where it was possible for us to reach quickly this level. In Europe, HOD is a quite new , or at least young activity: this is the reason why we are actually present in little more than 10 countries, from Portugal to Russia. Stocknews.ch: How is the market of water divided - still versus carbo? 
Something to keep in mind: Carlo Donati, Executive Vice President of Nestlé SA and CEO of Nestlé Waters: “We need to look beyond ideologies, and focus on where each one of us can make a difference, whether as individuals, industry or the agricultural sector.” 
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