Preparing for the rising cost of fresh water
September 13, 2011
It is estimated by the United Nations that the world’s urban population will double between the years 2000 and 2030. In that time, while cities and populations around the world grow, the amount of fresh water available for consumption as well as domestic and industrial use will not expand. It is further predicted that, if little is done to alter this situation, global demand for fresh water may outstrip supply by as much as 40% by 2030, putting food security at risk. Such a prospect makes fresh water availability one of the most pressing issues facing the world.
Availability and the likely future cost of water were frequent topics of discussion during the Grocery Manufacturers Assoc-iation’s Executive Conference, which was
held in late August at The Broadmoor hotel in Colorado Springs, Colo. The Executive Conference is an annual, invitation-only event that draws leaders of the major consumer packaged goods companies. It is an event where the topics of discussion, both formal and informal, tend to be on the horizon, because those in attendance are charged with developing the long-term strategies guiding their companies.
Noted several times during the conference was the drought that is taking its toll in Oklahoma and Texas. The current catastrophe provides a stark example of the issues that municipalities, consumers and businesses face at times when fresh water resources are low and mandatory conservation programs are considered.
The challenges the water availability issue presents to business leaders are two-fold. First, they must work together to lobby political leadership, both local and national, to take the issue of fresh water availability seriously, avoiding the urge to do what is common these days and “kick the can down the road.” Second, executives must lead by example through the development of water saving and conservation programs within their companies.
In its Infrastructure Report Card, which is published every other year and last issued in 2009, the American Society of Civil Engineers gave the U.S. drinking water system a grade of “D-.” The group noted that U.S. drinking water systems, both urban and rural, face “staggering” needs over the next 20 years, and that its analysis did not account for any growth in the demand for drinking water in the next 20 years.
The current focus on austerity in Washington, D.C. holds little hope that major infrastructure issues, even those as critical as fresh water availability, will be addressed in the near future. And given the fiscal situation of many states and local municipalities, it is difficult to imagine many being able to undertake any significant projects without some form of federal support.
Where the food and beverage industry provides exemplary leadership is in the area of reduced usage and conservation. The increasing focus by companies on sustainability has allowed many to lower water usage while improving operating efficiencies. One leader in this area is Nestle, which was given the Stockholm Industry Water Award last month during World Water Week. The company earned the honor for its global focus on water management issues.
In his acceptance speech, Peter Brabeck-Letmathe, the chairman of Nestle, said that a significant problem surrounding water usage and conservation is its value. He noted that every other raw material, from oil to corn, has a value that is based on demand versus available supply. “Why are we not willing to give the slightest value to most of the water being used by our different commercial activities?” he asked.
As the issue of fresh water availability becomes daunting increasingly urgent, the cost of water will surely rise. Prudent companies, like those represented at the G.M.A. Executive Conference, will prepare for that day by putting efficiency programs in place that will hopefully compensate for water’s eventual rise in value.