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FIJI Water

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Wajahat Ali

on 13 September 2016

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Transcript of FIJI Water

Products - Bottled Water in sizes
330ml - $1.19
500ml - $1.49
1 ltrs - $2.49
1.5 ltrs - $2.79
Discover Earth's Finest Water™
FIJI Water

"We'd be happy if anyone chose to drink nothing but FIJI water to keep the sea levels down
- Thomas Mooney, FIJI Water Senior VP - Sustainability
Company Overview
First Bottle of FIJI Water is sold
First shipment of FIJI Water to the U.S.
FIJI Water positioned as the premium U.S brand
Roll International purchase FIJI Water
Reaches sales of 1M cases
Carbon negative campaign launched
Obama sips it. Paris Hilton loves it. How did a plastic water bottle, imported from thousands of miles away, become the epitome of cool?
FIJI Water goes green
Water Management - sustainable harvesting
ISO 14001 certification
50% renewable energy (Wind Power)
70% energy efficient lighting
95% locally sourced consumables
95% waste recycling
Fijian Government Relationship
Carbon Negativity & Lawsuit
Bottled Water Industry
Bottled Water Packaging
20% less plastic in bottles
Shape of bottle
100% recyclable cartons packaging
Fuel efficient trucks
Logistic Routing
26% reduction in GHG by with truck reroutes.
55% reduction in GHG emission by re-routing shipping lines
“Earth’s Finest Water”
USA’s No. 1 premium bottled water
Available in leading hotels, fine restaurants, retail locations, as well as by direct delivery across 40 countries
Revenue of USD $150 million
Employes 400 locals
Leading exporter of the Fiji Island
20% of the countries exports
3% of the Fijian GDP
“until you unscrew the cap, FIJI Water never meets the compromised air of the 21st century nor is it touched by another human being"
Competitive Advantage
Exists for over 200 years
Industry size - US $100 billion in 2014
Profit - 2 cent per bottle

Negative Externalities:
Waste - plastic & water
Water & energy usage in production
Green house gas (GHG) emission
FIJI Water Sustainability
- Stems from ambitious carbon-negative campaign
- Marketing misaligned with operational goals of sustainability
- Created negative public image - "greenwashing"

1. Discontinue aggressive carbon-negative “Every drop is green” campaign.
- Attempted to go beyond global best practice with use of controversial carbon forwarding credit schemes.

2. Adopt "Carbon Optimal" approach.
- Unconscionable industry & remote geographical location
- Focus on tangible aspects & social responsibilities

3. Continue developing local sourcing practices through the supply chain.

4. Investigate leveraging of technological advances to further reduce environmental impacts.
Aquifer Water
Bottling plant
Bottled water
Community & environmental initiatives
Negative environmental externalities
Seen as biggest threat to FIJI Waters operations
- Control access to key resource
- Historically corrupt & unpredictable
- Provide barriers to entry & imitation (Coca-Cola Amatil)

1. Counter-offer & monetise current initiatives
FIJI Water foundation, Rotary Pacific & rainforest preservation
- Tourism advertising

2. Establish local advisory committee
- Comprising of key Fijian Ministers & selected Community Chiefs

Drive counter offer, add transparency & rebuild relations

3. Develop a contingency plan for exiting the Fijian market
- Staged amalgamation & re-branding with NZ Water SpringFresh
- Re-condition customers/change expectations & limit loss of market share
Legal & regulatory
Fijian government
Operations Overview
Fiji gov atempt to increase export tax
Bottling companies lobbied against govt
Fiji govt dropped the tax
Export tax increased by govt again
Tax rate Increased 45 fold
FIJI Water only company affected
Low margin, unsustainable operation
Lawsuit in US court for profiting from "Deceptive and misleading claims" related to carbon negative campaign
Dubious method adopted for carbon offset to make claim of being 120% carbon negative.

Key Recommendations
Proposed Government Taxation Increase
Californian Lawsuit
FIJI Water founded by David Gilmour
Signed a 99year lease with Fiji gov
Lawsuit in US for "deceptive and misleading claim" that FIJI Water is 120% cabon negative
Fiji gov tried to increases water export taxes from 0.3cents/ltr to 20cents/ltr
Fiji gov furthre increases water export taxes to 15cents/ltr
"Until you unscrew the cap, FIJI Water never meets the compromised air of the 21st century nor is it touched by any human being"
Conceptually simple transformation process -> Complex operating environment
Mission Statement
FIJI Water, the world’s finest water, is committed to quality and excellence in our product, people, profitability, and strategic partners. We are dedicated to communicating the passion and unique properties of our brand to consumers worldwide and continuing to invest in the future while preserving and cherishing the pristine source.
Operations Overview
Supply Chain
Bottling Facility
Without the rainforest, without a sustainable ecosystem, and without Fiji, FIJI Water wouldn't exist
Physical product
Sustainability achieved through continuous process improvement (six-sigma)
Community projects etc.
Clean water
Philanthropic Activities
Recycling Program
Operation & Consumer Waste
Carbon Negative Program
- Strong industry growth.
- Exclusive access to world class aquifer.
- Well known & established brand, with strong marketing capability.
- Simple transformation process.
- Excellent social & environmental initiatives
- Biggest impact to operations is from external environment - this needs to be proactively managed.
- Focus on carbon optimal & social responsibility messages & action.

Questions ?
Vinaka; Vinaka vaka levu
High Transaction Risk: Forward Crediting of Ex-ante Offsets

The buyer pays the purchase price for a certain number of offsets that have yet to be produced, and the provider delivers a certificate confirming the purchase.
The successful generation of the agreed number of emission reductions is uncertain.
The customer carries the risk that some or all of the purchase price may be lost, given that offsets might not be delivered.
Transparency in such transactions is likely to be limited because providers are unlikely to inform buyers of any shortfall in the number of emissions ultimately achieved.
Can be for projects that are not expected to deliver the emission reductions for several decades, as is the case with certain forestry projects.
Buyers must pay upfront with no guarantee of the fulfillment of delivery, such transactions carry the highest risk for the buyer.
Full transcript