The Prius of Bottled Water

Peter Thum: We think of water being available, as being free, as being a human right.  And yet at the same time, we abuse the availability of water. 

I think it’s going to become a significantly greater problem than most of the other problems that we have. And the levels at which we consume water and the levels at which we consume energy aren’t sustainable.  If you stretch American behavior over the entire global population, and so we will collectively have to change.

I was working for McKenzie in 2000. And I got an assignment to go work on a post-merger project in South Africa and I saw lots of different problems and met people both from other countries doing development work there as well as people from South Africa. 

There was a time when I was driving down a road in South Africa where I distinctly remember driving past this woman on a dusty road and she was carrying a large pot of water on her head.  And it was clear to me that she was very far away from wherever she had come from and from wherever she was going.  And I think that was the moment where I thought something has to change so that people’s lives aren’t like this anymore. 

And not long after I got back from Africa, I was assigned to a project to work for a company that produced soda, bottled water.  And I was looking specifically at a few product categories and I was looking at bottled water and I realized that much of the consumption of bottled water and the use of brands was about people looking for emotional benefits.  And so I thought, there might be a way to create a brand that effectively would be a funding and communications platform. And that became Ethos, which ultimately was bought by Starbucks. 

After we were acquired by Starbucks, when we went from giving away hundreds and thousands and tens of thousands of dollars to scaling the business and giving away a million dollars. And now, probably something like 100 million people in the U.S. and Canada have bought Ethos and it’s generated several million dollars worth of funding to give water to about half a million people around the world.

In creating Ethos, the whole premise was we’ll use consumer behavior to tackle a social issue.  At the same time, the people who you would think would naturally be excited about the mission that we were pursuing, providing water to people around the world are also very concerned about the environment. 

I think the number one concern that people have and the thing that people harp on about Ethos Water is that it participates in an industry that is ultimately not necessary and in which creates a lot of waste materials. 

But I think a bigger issue is our reliance on plastics, which are ultimately derived from petroleum.  And it’s in everything that we use.  It’s part of almost everything that we produce, every industry that we operate. So I think we aren’t the only people who face these kinds of dichotomies, and in fact, most industries will have to reconsider not only how they are gong to make money, but how are they going to make money in a world where things like newspapers and bottled water are going away.

I think a good analogy for Ethos Water is the Prius, which basically doesn’t solve any problems, but it takes advantage of an imperfect technology and it takes a step in the right direction.  It’s economically viable at scale, and it moves people emotionally and intellectually in a direction where the competition then sees an opportunity to beat the Prius, whether it’s the Volt of some other product.  And then you have an entirely new market even though the first step, whether it’s Ethos or the Prius arguably are not perfect.  And so you see these early adopters, people who… a small percentage of the population who start buying things because they make a decision, because they tend the be the kinds of people who make decisions internally, that they want to have that thing because it makes sense to them.  And then other people follow and then the competition follows and then you have a new market.

Directed / Produced by
Jonathan Fowler & Elizabeth Rodd

1 billion people in the world lack clean drinking water and over 2.6 billion lack adequate sanitation services. Peter Thum came up with the idea for Ethos Water in 2001 while working for McKinsey & Company on a project in South Africa where he saw water issues firsthand. Thum led Ethos as President through its acquisition by Starbucks in 2005.

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