MELBOURNE -- Bottled water is one of the most paradoxical products of our time. It's a booming industry made out of a commodity that is free in many places and has nothing added -- well, except for some clever marketing that calls it an on-the-go, healthy alternative to sugary drinks. Today the Australasian Bottled Water Institute (ABWI) estimates the current market value of bottled water at approximately AUD$500 (USD$426) million annually. With such lucrative stakes, it's not surprising that companies peddling the plastic wares have no incentive to give it up. Yet two nascent startup groups in Melbourne believe their disruptive business models could turn the trend.
Appealing to a generation that grew up on bottled water, Melbourne student entrepreneurs Alex Chen, Caleb Ha, Hwi So and William Yau, say the solution is not to kill off bottled water but to create more of it. If that fact alone didn't make their proposition controversial enough -- they also want to give it away for free.
They believe the problems with bottled water are the environmental impact and the cost to consumers. They say bottled water, at AUD$3-$4 (USD$2.50-$3.50), is more expensive per liter than gasoline.
"It's not that we don't want to get rid of bottled water -- we are just being realistic about it," Hwi So says. "It's going to take time -- we'll eventually get there and until then, we'll continue to innovate our model."
Last year, the friends started their company, Free Is Better (previously Sirene Water), to offer a hybrid solution to the environmental and consumer issues associated with bottled water. The four claim they are the first in the Australian market to use fast breakdown oxo-biodegradable packaging that is made from 50 percent recycled materials, is slightly more expensive (one cent more per unit) than PET, and takes 10 years to degrade (compared with PET which takes 1,000 years).
The startup combines environmental innovation and corporate responsibility to distribute free bottled water to the public at festivals, special events and selected venues. Businesses pay to advertise on the bottles' labels and the money is used to cover production costs and eventually make revenue on par with other bottled water companies.
It's still too early to say whether the model will work, but Hwi says the intention is to be kind to the environment, give consumers what they want, while making a profit -- "the dream." Currently the team are in the process of educating consumers and potential advertisers on their business model.
Gretha Oost, who runs the water design consultancy Half A Teaspoon, remains skeptical of what she calls Free Is Better’s half-measured solution. “I can understand the reasoning of seeing it as a business opportunity, but to me it’s the easy way out,” says the 41-year-old communications and design professional.
And while many have attempted, and failed, to tackle this manufactured problem, Oost believes she has the answer: Project 0.
Project 0 is a social movement born from the theory of Systems Thinking. Translated -- it’s a three-pronged approach that combines a product, called the “Eau” (a sleekly designed filtered water bottle); behavioral messaging (a key ring token to remind people to bring their Eau); and aesthetic, art fountains, designed in collaboration with local artists. "If fountains were more visually appealing in design, people would be more compelled to use them," Oost says.
Oost has also created a tool kit, including templates and information, to help Melburnians engage their local community, business and government to collectively create their own Project 0 art fountain. So far, the global advertising agency M&C Saatchi and several Melbourne councils have come on board as collaborators.
Neither Free Is Better nor Project 0 have proven to fully address the issue of why we drink bottled water at all, given the ubiquitous availability of tap water for a fraction of the cost. However, behavior-focused marketing over the past 10 years is slowly helping consumers to drink and buy less plastic bottled water.
And while you wouldn’t usually associate water utilities with savvy marketing, last year Yarra Valley Water (YVW) attracted a lot of positive public attention for their ‘Choose Tap’ campaign, launched November 2011, which centered on Dupé -- a fictional brand. Dupé sells a variety of unusual products such as 'February Moonlight', 'Good Vibrations' and their signature product, 'Organic Fresh Air', all at incredibly high prices, raising the question of why we choose to pay so much more for another product that is available relatively cheaply. To date, the Choose Tap app has over 6,000 downloads, and in only two months, the Dupé video had over 97,000 views on YouTube alone.
Tony Kelly, YVW director, says it simply doesn’t make sense to drink bottled water when the tap alternative is so much more appealing. “More than a billion people around the world do not have access to safe drinking water. Melbourne is fortunate to have high-quality drinking water, with the majority drawn from large protected mountain catchments, where no agricultural or human activity is allowed,” Kelly says.
While it makes sense for a water utility to promote its own product, YVW media representative Cheryl West says, “If customers completely stopped buying bottled water, [our] revenue from water would increase by less than one percent.”
Oost makes no secret of the business side of things. "If Project 0 wants to achieve its mission and have a global reach, there needs to be a sustainable organization behind it," she says.
She remains optimistic about the future, believing that as bottled water is only a recent phenomenon, it is possible to change people’s attitudes.
"Behavioral change is extremely complex and difficult to achieve," Oost says. "But it is possible if we break it down in small steps, make it easy and inspire people. We didn’t consume the current half a billion dollars worth of bottled water overnight, so it will take time to reverse it. One step at the time."
Photo: Free Is Better (main), Half A Teaspoon.
This post was originally published on Smartplanet.com