Bottled Life: Nestle's Business with Water

The boost to our EBIT margin

from 9.8 percent to 14 percent of sales.

We eliminated more than 10 percent

of all stock-keeping units.

Nine billion Swiss Francs, or almost nine billion dollars.

From 6.2 billion Swiss Francs to 15 billion Swiss Francs,

an average gross of 10 percent per year.

Food and beverage amounts and surpassed, also,

the 100th billion order.

Our internal volume gross amounts

to 3.7 percent on average.

With three percent,

this has reached a level amongst the highest

attained in my 12 years as chief executive.

Lake Geneva.

It's into this lake that melt water flows

from the mountains of Switzerland.

Located on the shoreline is the headquarters

of a company which deals in water.

It's the headquarters of Nestlé,

the most powerful food and beverage company in the world.

Without water there is no sustainability for our company

and for our shareholders.

This has to be our chief priority.

The continued availability of water is key

to our continued ability to grow and to serve

the consumers' needs all over the world.

At Nestlé, we believe that to have a long-term

business success, you must simultaneously create value

for the shareholders and for the public.

And we call this creating shared value

and it is a fundamental principle behind the way

we conduct business at Nestlé.

Our corporate social responsibility report

is as thick as our financial report, so I think

it's a good balance again, which is reflected.

When it comes to water, Peter Brabeck

is a global ambassador.

He travels the world, preaching cautious and careful

use of this most precious commodity.

He's a captain of big business, committed to making money,

but also a man who speaks of social responsibility,

so I want to know more about that.

My first destination is the east of Ethiopia,

where Nestlé is helping the United Nations to provide

a U.N. refugee camp with drinking water.

It's one of their humanitarian projects, which the company

finances as part of its corporate social

responsibility program.

It's the lack of drinking water, the global water problem,

which is also of paramount priority for the U.N.

The water crisis is perhaps the most urgent ecological

and human threat of our time and more children die

every year in our world of water than HIV/AIDS,

traffic accidents, and war combined.

In their recent World Water Development Report,

twenty-four agencies of the United Nations

confirmed that the global water crisis

is getting worse and threatening millions of people every day.

We can benefit the people of Ethiopia

in a way that is impossible for either the United Nations

or Nestlé to do it by itself.

Clean drinking water is a life or death issue.

By combining the know-how of our Nestlé water

company geologists with the field expertise of UNHCR,

be able to ensure access to pure water for tens

of thousands of people.

This is true, not only for today,

but for many years to come.

This is the camp to which Peter Brabeck is referring

in his Nestlé video.

It's home to some 20,000 refugees from neighboring

war-torn Somalia.

Many of them have been here for more than 20 years,

waiting for the killing in their country to stop.

In 2004 the situation got better.

Due to the pipeline.

But I get only two to three jerrycans a day.

That has to satisfy ten people

for drinking, cooking, and washing.

Sometimes we are two to three days without water.

Due to borehole problems, may be lack of electricity.

Then we have to wait for the specialist to repair the system.

It's exhausting.

We have to share with the neighbours

and economize even more.

I've been expecting something of a showcase project,

but instead, refugees tell me there's a shortage of water.

The camp is supplied by an underground water pipeline,

the water being pumped from the valley,

some 20 kilometers away.

Nestlé co-financed the water supply system,

and according to Peter Brabeck, is committed

to its long-term operation.

The groundwater is high in ion content

and requires special treatment.

This is the water pipe which leads up

to the Kebribeyah refugee camp.

Because of the strong corrosion, the water pumps

down in the valley are often out of operation,

and when that happens, 20,000 people

at the other end of the pipe are left without water.

This is the station where we keep three service pumps,

to pump water from here to the booster station.

We are... in the last three or four years,

we have a lot of work to maintain this

because after time, the pumps get older

and they have to be replaced,

and this system is now running, partially as a result

of the funding we got from (unintelligible).

This means that Nestlé is no longer

supporting this system?

No, not now, these new pumps are changed in 2007

and then 2008.

Until 2004, they supported and since then

they are not anymore following up this project.

We have to continue to ensure the provision of water

to our people and we have refugees in Kebribeyah.

We have refugees in Aw Barre and in Shedder.

About 75,000 refugees alone are depending

on the provision of UNHCR... UNHCR support,

so we really need supporters, organizations, donors.

Nestlé's commitment to the camp is finished,

but according to the company website, it's still continuing.

...are closer to reality than ever before.

Our aim is to make sure that the water system

can keep functioning over the long-term,

so that the people of the region and their children

will have access to clean water for many years into the future.

Nestlé has not been here since 2005... end of 2005.

Is Brabeck intentionally playing up Nestlé's commitment?

Or is the companies PR perhaps getting

just a little too enthusiastic?

The water companies are in this for one reason

and that is profit and sometimes they connect up to a project

like this for their marketing tools because we,

all over the world, are criticizing them

and they are trying to renew their image in the world.

They don't stick with something unless it's profitable.

They are a big, transnational, competitive corporation.

They will never stay with something

for humanitarian reasons.

They don't get into it for humanitarian reasons

and they won't stay with it for humanitarian reasons.

$2,920...

Maude Barlow, from Canada, is an ambassador for water,

just like Peter Brabeck.

...and it's gonna have rivers that run so fast...

Except that she's a consumer activist,

a winner of the Alternative Nobel Prize,

and a strong critic of Nestlé.

...to love mother nature.

Nestlé and water, we've asked the company for an interview

and we're still waiting for a reply.

For the time being, we can film only these pictures,

on the fringes of a media event.

Nestlé is one of the most profitable companies ever.

Annual turnover exceeds $100 billion.

It's the world's largest food and beverage multinational,

adored by investors big and small.

More than a quarter of a million staff,

and the chairman of the board is a man with a mission.

I have often wondered what is

the most important single factor

that could ensure a company continuing

for another 140 years.

And I have come to the same conclusion - water.

Water has been important for Nestlé ever since

Henri Nestlé founded the company nearly 150 years ago.

He was producing mineral water as early as the 19th Century.

He lived high above Lake Geneva, privately acquiring

local water rights, so that he could provide his home

and garden with fresh water.

To the village, he donated this fountain,

with its excess of residual water from his home.

When it comes to bottled water, Nestlé is the undisputed

world leader.

The company has bought up many of its competitors

and now owns more than 70 different brands.

Annual turnover totals more than $9 billion.

With the takeover of Perrier in 1992,

brands such as Poland Spring joined the product portfolio,

ensuring access to the lucrative beverage market

of the U.S.A.

We also look, of course, which is also very important,

which is, "What is the image of our company?"

So we are checking all over the world, constantly,

what are people thinking about Nestlé's compliance,

about Nestlé's responsibility as a corporate citizen?

In Bern, Switzerland, I have an appointment

with a senior Nestlé manager.

He chose the restaurant.

Will Nestlé give us information about its water business?

And an interview with Peter Brabeck?

The answer is "no."

According to the Nestlé man, it would be the wrong film

at the wrong time.

Then he offers to commission from us a film about

the global use of water in every culture.

Above and beyond that, the doors of Nestlé will be closed to us,