October 2003: Volume 45, Number 10
Q&A -- Dialed in with IBWA`s Joe Doss
by Carlos David Mogollon, WC&P Executive Editor
The following is an interview with Joe Doss, president of the International Bottled Water Association, which hosts its 45th Annual Convention & Trade Show for the first time as part of the Worldwide Food Expo later this month at Chicago's McCormick Place. He lays out the issues over the past year and the outlook for the future of the association and its affiliates under the International Council of Bottled Water Organizations:
WC&P: I’m working on a couple different subjects for my Viewpoint this month. One of them is the new movie, “Matchstick Men,” which takes a swipe at water treatment dealers by portraying them as scam artists.
Doss: Oh, so that would be Pete Censky with the point-of-use people.
WC&P: Yes, it doesn’t slam them directly. The movie is basically about two con-men selling water treatment filters at inflated prices with the caveat that buyers will be entered into a sweepstakes with a chance to win big prizes. Indirectly, at least, we’re going to have to comment on it.
Doss: Well, I wanted to see the movie and now I have even more reason to because some of our members make and sell point-of-use equipment as well.
WC&P: Exactly. Another topic was that I wanted to use it somewhat as a preview for the IBWA show. We’ve got three—or more—events going on at once with it being coupled with the Worldwide Food Expo and WQA choosing to host it’s Mid-Year Leadership Conference at the same time in Chicago. Thus, I wanted to check with you to see what you might want to say about what are likely to be the big topics under discussion. To prepare, I went back and took a look at some of the news items over the past few months. The ones that caught my eye were: 1) efforts in Maine with respect to aquifer withdrawals and labeling laws; 2) efforts in Michigan, California and Mexico with respect to waste hauling, landfills and recycling; 3) the furor in India over Pepsi and Coke, pesticide levels in bottled water and whether national standards there should be upgraded to match EU norms; and 4) the reformation of the Latin American chapter.
Doss: Well, those are all issues that have been on our radar screen for sure. If you’re asking me what the big issues are or have been, I would say you’ve touched on the issue areas that we are very active on. One is what I call the “groundwater resource management” issue, which is how do all water users—not just bottled water producers—come together to help craft very equitable groundwater resource management legislation. I think the bottled water industry has been very unfairly picked on in the past by certain states just because our water product is rather ubiquitous and visible. But the truth of the matter is—and we’ve discussed this—bottled water only makes up, according to U.S. Geological Survey and industry volume data, only 0.0003 percent of all groundwater withdrawals in the United States. That’s of all groundwater withdrawals.
Doss: So, what you’ve got is this on a nationwide basis. You look at agriculture, for instance, or utilities—and the vast amounts of water they use just dwarf bottled water and all the other withdrawals.
WC&P: What would that percentage be on a local basis where aquifer withdrawals have been made an issue?
Doss: I can’t say that it would be that same percentage everywhere, and it varies from place to place.
WC&P: The reason I ask is that relates to the situation in California, where a point was raised on the percentage of market penetration and brine discharge issues. They found the areas where there was the most conflict were those where there was a very high market saturation of water treatment equipment. This was part of the rationale for the compromise there five years ago with respect to SB1006 and improved softener salt-use efficiencies in exchange for granting communities the right to restrict equipment if they did a survey of all brine contributors, they’d pursued alternate means to reduce it across the board and they showed there were no alternatives. Today, it’s more of an internal issue in terms of strategy over where the industry needs to give a little, where it needs to push and where it needs to hold its own.
Doss: You raise a good point. I mean, obviously, these percentages may change from place to place. But I think you’ll find anywhere one goes that bottled water, no matter what the situation, is not a very large withdrawer of water from the aquifers. And the point that we like to always make is that we’re willing to work with any state government and groups to come up with an equitable solution that treats all users equally. That’s really what we’re asking. We ask that any legislation or regulation be scientifically based, i.e., based on hard science, and not just, “Oh, well, we see water being used and, therefore, we’re going after it.” And it should be multi-jurisdictional and apply equally to all users.
WC&P: Is this the biggest issue in the U.S. for the bottled water industry?
Doss: Well, obviously, it’s a big issue. It’s not the biggest issue. But it’s a big one. For those member companies that produce bottled water that is sourced from groundwater, from aquifers, it is a big issue. We find ourselves almost—in many, many states—being targeted, when in fact, if seen and looked at, they will clearly find that we are just a small portion of this. There’s some work being done right now by the Drinking Water Research Foundation and, hopefully, it will shed some light on this in the future.
WC&P: What are they doing?
Doss: Quantifying just how much of water withdrawals are attributable to the bottled water industry as compared to other industries, and it will also look at aquifer recharge.
WC&P: Tell me this. To be honest, the reason why I went back and did a survey of news items to see what the big issues were of late with bottled water was I got a sample copy of E Magazine, which I assume got sent to a lot of people because I’ve seen it pop up on a few editorial pages—comments on it, excerpts or synopses of it. The thing in my mind was: Here is an industry that’s providing clean water—and, when you look at it on a worldwide basis—in many areas where the drinking water is atrocious and/or may be hazardous to people’s health. Yet, over the last few years, we’ve seen a trend to attack this industry. I was kind of curious about your perspective on this overall pattern, whether it’s the NRDC report, the World Wildlife Fund campaign or any other number of other variations on a theme. Where do you think this comes from? Do you have an overall spin that you would like to put on this that people should bear in mind, because it doesn’t look as if it’s going away but instead is becoming more frequent.
Doss: Well, I think there are a couple of things going on here. Clearly, the NRDC report did start it all. That report was soundly refuted. There is a rebuttal to that report that was issued by the Drinking Water Research Foundation, pointing out its many flaws and inaccuracies.
WC&P: Yes, but still, when you look up bottled water on Google, the NRDC report still pops up in the top five. It’s right there.
Doss: Oh, yeah, we’re trying to do some things to make sure that when you go onto the Internet to research this issue that the DWRF (pronounced "dwarf")—Drinking Water Research Foundation—Report also comes up.
WC&P: What’s DWRF?
Doss: Drinking Water Research Foundation, I’m sorry. The acronym is DWRF. It is a non-profit educational research organization that is separate from IBWA.
WC&P: That’s funny because right now, it’s getting dwarfed online.
Doss: Yes, well, I think, from our perspective, we continue to try and keep telling our positive story and not be drawn into some of these negative stories. We don’t consider ourselves to be primarily a tap water alternative. Bottled water products are not competing with tap water. So many times, people sort of confuse this. They want to draw consumers into this tap water vs. bottled water argument. And that’s not where we want to be. We’re not competing with tap water.
WC&P: Not in the United States.
Doss: No, we’re competing with other beverage products, whether they be bottled water, soft drinks, juices or milk.
WC&P: And have been somewhat winning that war if one wants to look at it in terms of percentages, because didn’t bottled water just jump to No. 2?
Doss: It depends on which numbers you look at. I think we are going to be or have made it to the No. 2 spot behind carbonated soft drinks.
WC&P: Who was No. 2 before?
Doss: According to Beverage Marketing Corporation, beer is the No. 2 beverage product and bottled water could soon overtake it. But, I have also heard of other groups who have statistics showing that bottled water is already the No. 2 beverage.
WC&P: Who’s among the "others"?
Doss: I think IRI does some research of this type, but they do it differently than Beverage Marketing, which could explain the slight difference in product positions. They do it on a more retail basis and Beverage Marketing Corporation focuses on wholesale sales.
WC&P: Let’s talk about the other big issue that comes up aside from groundwater, which is the environmental impact of the bottles. You at IBWA have done some things with respect to recycling promotion, correct?
Doss: We continue to work on recycling issues and we continue to work with others in the food/beverage industry, municipalities, and recycling advocacy organizations such as NAPCOR , which is a group that is involved with the PET plastic recycling. And we've always encouraged curbside recycling. We think that is a more effective method based on what we've learned over the years with over 7,000 communities nationwide with curbside recycling programs, compared with only 10 states that require bottle deposits, and only two of those cover bottled water.
WC&P: We recycle all of ours here. Tucson has a pretty good curbside recycling program, though.
Doss: Right. We do in Fairfax County (Virginia) as well. That's clearly an issue. We have the bottle bills that come up constantly. Those continue to be on our radar screen. You know, I think that one of the issues you touched on, which is I think fundamentally one of our biggest issues if you were to ask throughout (the industry), is labeling bills. Right now, one that is of particular concern to us is in California. That is California Assembly Bill (AB) 83. That would require two things: 1) It would shift responsibility from the California Food and Drug (Branch in the Department of Health Services) out there and move it over to the Drinking Water Environmental Division that regulates tap water (i.e., as a public water utility); likewise, 2) this same bill would require labeling that would be different from what's required by FDA. I think the number of these types of proposals are increasing these days. Each state wants to try and enact—and sometimes it's specific to bottled water, sometimes it's all beverages or food products -- legislation that is in addition to or different from what's required by FDA. And that could, as you can imagine, cause just an enormous patchwork quilt of laws throughout the United States. In one state, it could say you have to have type this size and it has to be in red ink. In another state, they could say you have to have a larger or smaller size type and it has to be in blue ink. The possibilities are endless for confusion among consumers, not to mention the chaos in distributing these products in interstate commerce and making it difficult for manufacturers to be sure that product labeled for one state doesn't get distributed in another state.
WC&P: What are some of the things they want to have included in the labeling?
Doss: For instance, in California, they're seeking to have bottled water labels include the same information that is contained in the Consumer Confidence Reports that are issued annually by all public water systems. Each year, you probably get one in your mail.
WC&P: Yes, I'm familiar with them. CCRs or Water Quality Reports.
Doss: They want all that similar information to be published to the minutest degree…
WC&P: On the bottle?
Doss: On the label.
WC&P: They couldn't just provide a website where that information is available?
Doss: No, the bill sponsors want a label. How could a company even get all that information onto a bottled water label? It would have to be an accordion label that would stretch across the room. But, you know, even requiring some mention of a website on the bottle —such as a label that would say "for information on what's in your bottled water, go to this company's website"—well, all companies don't have websites. And a similar problem is that the labeling information required by one state could be very different from what the next state might require. Another state could say, "Well, we're going to require you to have a website plus a phone number plus a fax number on your label… " It just gets to the point where it's so important for the efficiency of interstate commerce of the United States to have one national set of uniform regulations. And there is a mechanism at the FDA, if any state decides that this is needed, to have a petition submitted to the FDA and request that FDA change its laws to require whatever it is in the states that they're looking at. And, therefore, it would be done after a very comprehensive analysis of the situation and done on a uniform national basis.
WC&P: That's different actually from the Maine case. The Main legislation was actually looking to identify the bottled water's source, which I understand the Grocery Manufacturers of America contested.
Doss: Right, exactly. And that is something that IBWA may or may not get more involved with in terms of filing an amicus brief with the court. It just depends on where it goes. If GMA is successful, we probably won't. But, if they are not successful in getting the preliminary injunction and it goes to a trial on the merits, then we may submit a friend of the court brief. That Maine law being challenged required the water source to be disclosed but that's just another example of a labeling bill that would require something different than FDA regulations. There could be bills that require a source to be labeled, there could be bills that could require all the ingredients to be labeled, and there could be bills that might require other things. The point is that all of these state labeling bills would require something different from what is currently required by the federal law. And our point is that none of this is warranted. Particularly in the case of the Maine legislation, that is an issue where clearly the federal government law already preempts, in our opinion, that state law. Because there is in the Standard of Identity regulation at FDA—strong preemptory language there. So, I think it's pretty clear in that regard. Still, it is just another example of what I'm saying. These labeling bills are the ones that seem to be more prevalent and we are finding ourselves spending a good deal of time dealing with them. So far, other than in Maine, we've been fairly successful in doing so.
WC&P: There are other issues, since we're touching on the variety of topics. I would point out also that in Mexico, there was a very large dollar amount committed by the bottled water industry there toward recycling efforts as it relates to the landfill issue and the environmental impact of discarded bottles themselves. The waste hauling and landfill issues in the United States are ones you also are dealing with in California and Michigan. What's going on with those?
Doss: Both of these states have bottle deposit laws that are very different. California's legislature is considering revising its law. And Michigan's State Senate has had a task force looking at their bottle bill deposit law. IBWA has testified at various public hearings and participated with others in the beverage industry to address the recycling rates.
WC&P: The other thing I guess is if you could talk to me about the Pepsi/Coke situation in India. I've seen so much press on that online at least—most of it coming from newspapers there. Google now allows direct links to overseas publications. They've had a lot on the case there and how it arose over an issue of pesticides being found in bottled water. They then found that these were not over the national levels, but did exceed EU standards, which at the time India does not require be met.
Doss: I will say that we have just not been following that. It's an issue that some of our foreign counterparts would be dealing with and handling on a local basis. Probably, in that case, it would be the Asia Bottled Water Association (see: www.ibwasia.org/) that is headquartered in Jakarta (Indonesia).
WC&P: Do they request assistance from you on issues such as that?
Doss: We have not been in contact with them, no, on this issue. I'm confident that they're handling it. Like I say, they're quite capable in dealing with this. It's just something that we, while we're the International Bottled Water Association, primarily, our focus is on domestic issues representing U.S. and international brands. On most of those types of issues we let the local associations handle them. And they do quite well.
WC&P: There's been some evolution in the different chapters. I mean the European Bottled Watercooler Association (see: www.ebwa.org) has gotten very prominent. The Asian one has stepped up a bit. Both are good for the industry, I would think.
Doss: Oh, absolutely. And, in fact, we are all now members of what is known as the International Council of Bottled Water Associations (see: www.icbwa.org/). Whereas all of these groups formerly were chapters of IBWA, they are now their own independent organizations. Other than those already mentioned, there's the Australasian Bottled Water Association (see: www.bottledwater.org.au), the Canadian Bottled Water Association (see: www.cbwa-bottledwater.org) and I think you already made mention of a reorganization in Latin America. I think they're now calling themselves the Latin American Bottled Water Association (see: www.labwa.org).
Doss: Right, formerly known as ALEA.
WC&P: We have something in our Spanish language magazine, Agua Latinoamérica, on that very thing.
Doss: I actually wondered what the news was down there. We are obviously members with them in ICBWA. I just didn't know what the current status was. They're just telling you about the reorganization?
WC&P: Pretty much. I think their website isn't quite complete yet.
Doss: Right. Well, all of them used to be chapters of IBWA and, now, they're all independent organizations that are, now, all part of the larger International Council of Bottled Water Associations. We work very closely with all of them.
WC&P: How does that reflect transitions in the industry?
Doss: You mean forming independent organizations as opposed to chapters?
Doss: I think it just spoke to the fact that these groups, after a certain number of years as being our chapters, were able to stand on their own. They evolved, if you will. They've become stronger and more independent and, therefore, were looking for their own independent status. That was certainly fine with us. I think the important thing was that we all continue to come together on global issues. And we do that, for instance, through our continued work at the ICBWA.
WC&P: How long has that been in existence?
Doss: It's been in existence about two years now.
WC&P: I remembered seeing tell of it first a couple of years ago and then met briefly with them at their booth at the last IBWA show in Phoenix last October…
Doss: Yes, it's been about two years that it's fully formed. We tend to focus a lot on WHO - World Health Organization issues and Codex Alimentarius issues where they have issued a Codex standard for bottled water on which ICBWA commented as a global industry.
WC&P: Is there anything related included in the new WHO Drinking Water Guidelines that are coming out later this year?
Doss: Yes - the proposed third edition of WHO's drinking water guidelines is available online at WHO's Website. The proposed regulations are not intended to serve as bottled water standards; rather, they are quidelines established for general drinking waters. The Codex Alimentarius Commission, which consists of WHO and the Food and Agriculture organization of the United Nations, incorporated the WHO guidelines by reference into the 2001 Codex Code of Hygienic Practice for Bottled/Packaged Drinking Waters (Other than natural mineral waters).
WC&P: People can go see those at the WHO website where they talk about the new WHO guidelines?
Doss: Yes. As we discussed, the proposed third edition of the WHO guidelines is now available.
WC&P: The WHO guidelines are currently up online for additional comment.
Doss: Yes. I was going to say that one other thing we are very interested in and is on our plate, if you're interested, are the bioterrorism regulations at the federal level and all the plant registration requirements which we're trying to stay on top of.
WC&P: Be proactive…
Doss: Yes, and as you know on Oct. 10, the final regulations will be published by FDA . We have commented on the definition of food facilities, etc. As we understand it now, Oct. 10 is when they plan on having the final regulations out and then all food plants, distribution centers and some suppliers have to be registered by Dec. 12. That's a very short timeframe for them to do that. We are actually going to have FDA as an exhibitor at our Bottled Water Pavilion at the Worldwide Food Expo in October to be there and be available to answer questions on that as well as other issues. But it's particularly important because of the recent activity in this area and the fact that the deadline is going to be fast approaching. We're also doing a lot of educational seminars. I think we've got six or so scheduled throughout the country to help educate our members about these new requirements.
WC&P: And the precautions that need to be taken in the post-9/11 world.
WC&P: It makes perfect sense. Is there anything you wanted to say with respect to overall market shifts and what you may have seen among the membership. I know that there was a recent agreement between Suntory and Danone. Then, there's been a lot of consolidation in the office water cooler market in Europe as I understand it too. Pepsi and Coca-Cola both still seem to be sprinting ahead after only being in the water treatment industry for a few years…
Doss: The water treatment industry?
WC&P: Excuse me. I should say the bottled water industry.
Doss: Well, I think certainly we have seen and continue to see that there's a lot of consolidation in the bottled water industry. There's no question about that. The major players continue to acquire other smaller companies. I think clearly that trend is going to continue, but I think also there will always be room for the small, independent bottler. I think that's particularly so on the home and office side. The small PET side seems to be dominated, as you know, by several large companies. But, you know, even our smaller companies are in the PET business…
WC&P: How will the Homeland Security issues affect that? I'm wondering if that could create some hurdles for the smaller independents out there, in addition to them feeling pressure from consolidation led by the major corporations that have entered the market.
Doss: I don't expect that the regulations are going to be so onerous as to cause them to go out of business. I think, obviously, we're trying to work with FDA as other food industries are to make these regulations the least burdensome but to make sure that the information that the government needs is readily available. So, I don't sense that this particular regulation is going to be something that causes an unfair or competitive disadvantage for smaller companies any more so than any other regulatory provisions that have come down the pipe.
WC&P: And, lastly, you might want to comment on this being the first big experiment of IBWA merging its show in with another event to somewhat take advantage of critical mass. What are your anticipations?
Doss: I'm very excited about it. I really am. I've been very optimistic from the start and that's why we went down this road to begin with. We saw this as a great opportunity to bring, if you will, synergy to our show. And I think that the future is very bright because what is envisioned and what will continue to happen is, for instance, this show, which is the Worldwide Food Expo in '03 is going to be a 600,000-square-foot show roughly with between 20,000-30,000 attendees. That's significantly more than our previous show which was about maybe 40,000 square feet and maybe 2,500 people. So, it's a great opportunity for our suppliers to broaden the reach of people who are seeing them—other dairy and other areas who might also want to take advantage of their products and their services. And also, for our bottler members, it's an opportunity to see perhaps a lot of other products out there that may not have seen just at our show. So, we're very excited about the growth of the show. And I think for the future of the show, it bodes well as well. What we are doing with part of this—and I'm not sure if you're aware of all of it—is that in '04, there are certain players within the Worldwide Food Expo who, because they've previously only had a show every other year, now, they've decided that in what would be their normal off-year, they're going to be part of our show.
WC&P: And the event will be renamed BevExpo?
Doss: It's BevExpo in 2004, right. Beverage Marketing Corp. is a sponsor of it as is the International Dairy Foods Association. Those members of the Dairy Foods Association that wanted an every-year show will be joining our show. The bottled water segment is going to be a big part of it, but the important thing is we're trying to expand that beyond water to include all beverages. It's meant to include soft drinks, all juices, milks, etc. So, I'm not only excited about '03, but also carried over to '04 and sort of getting more fully into the whole beverage area.
WC&P: There's also the additional benefit this year in that being in Chicago, the WQA decided to go ahead and delay its Mid-Year Leadership Conference to coincide with this event as well.
Doss: Right. They approached us about it and we, obviously, have crossover members. We have offered to have them join us and we provided them space at the McCormick Center to meet. We're excited about that as well—having our members who are in that industry being given the opportunity to take advantage of some of the educational programming that they're going to offer and having their members who also are in the bottled water industry to have the opportunity to attend our show and take advantage of our educational track. So, I think it's a win-win situation for both sides. And I think it's a very good idea.
WC&P: Has there been any discussion over continued cooperation like this in the future.
Doss: Oh, absolutely. I think we'll obviously look to continue when we can and when it makes the most sense.