There are very strong brands that are completely dependent on water to maintain their commercial activity and, therefore, make its scarcity one of the most material elements of their Sustainability strategy. And this ends up affecting its entire value chain, generating new sales opportunities in other sectors.
You can't prepare Starbucks coffee without water, but the company can introduce more efficient jet dishwashers into its processes. In other words, the sustainability policy of the hospitality sector creates a new, very competitive market for the household appliances sector and both benefit from greater social awareness of the problem of water scarcity among final consumers.
At first we can think that a real commitment to the problem of water scarcity should be something more typical of beverage brands, since it is water that we consume when we drink. But the relevance of this topic is also very high for the long-term success of other sectors: tourism, due to its direct relationship with the conservation of ecosystems; the textile sector, due to the large amount of water needed to grow cotton or the need to wash clothes after use; all health activities, from the chemical industry for the manufacture of drugs to hospital care for patients... Almost all brands can have something to say about their responsibility with water and support it with real data and auditable for direct and indirect consumption.
In other words, to understand the set of threats and opportunities that water scarcity can have on a brand's image, we need to understand what it affects its entire value chain. In other words, it influences all the work that a company does to make a product available to its customer -both internally and with its suppliers- and for which the consumer holds the company fully responsible. The consumer does not know who the manufacturer of the bottle containing the purchased Coca Cola is, for him or her it is always the “of” Coca Cola bottle. The brand cannot evade its responsibility in its supply chain and, therefore, the sectors involved in the image of a brand are many more than we apparently believe.
There is no doubt about the engagement effect that a brand can achieve with its most aware audiences when it announces its responsibility with the use of water in its production processes. But, in addition, let's not forget that we are talking about a scarce resource with a market price (approximately 1.78 euros per cubic meter in Spain, and 2.82 euros in the EU average), so more efficient use has an impact on the final price of production in a cost environment that is very likely to rise. In the midst of the development of collaborative economies, wouldn't it be interesting to bring savings to the final price of the product, so that the consumer can also participate in the economic advantage? Can a beverage brand announce a price drop to its customers, however minimal, as a result of its commitment to responsible management of a scarce commodity so necessary for humanity, such as water? Engagement and shared profitability can go together.
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Emilio Vera Martín
Sigma Rocket senior consultant
