Sustainable strategies: beverage companies take on environmental concerns.(SPECIAL REPORT)

The United States is in the midst of a green movement--not for the first time, but with more pressure, perhaps, on consumer products companies than ever before. In fact, a recent study released by the Grocery Manufacturers Association and Deloitte Consulting said sustainability is "unlike any business issue consumer businesses have encountered in the past."

"While the issues associated with sustainability--such as waste management, commodity shortages and energy usage--are nothing new, the expectations of shareholders, consumers, regulators and other constituencies have changed, pushing sustainability to the top of the agenda for consumer products companies," said Peter Capozucca, one of the study's authors at Deloitte Consulting. "It is unlike any business issue consumer businesses have encountered in the past. The industry's large environmental footprint and unique dependencies on agricultural inputs, water and packaging, make sustainability a critical strategic issue that consumer packaged goods companies must address proactively."

The study found nearly 85 percent of consumer companies have sustainability initiatives, mainly in the form of recycling efforts and energy consumption. It also indicates the companies that implement successful sustainability programs are the ones that include direct involvement from the chief executive officer, and collaborate with suppliers, the scientific community and academics.

Interestingly, some consumer surveys report the public is only moderately concerned with the environment. Yankelovich Inc. found nearly one-third of consumers feel much more concerned with environmental issues than they did a year ago. A little less than a quarter of consumers, however, feel their efforts have no impact when it comes to the environment.

That's not to say companies should do nothing, the study's authors point out. The environment is a "strong concern" for 30 million Americans, representing an important segment of the population. In addition, companies still will be required to meet stricter regulations--often at a high price--and should leverage those changes with consumers, it says.

Singled out

Of all the beverage categories, bottled water has taken the biggest hit regarding environmental concerns. The segment has received a barrage of bad press, and even has been banished from some locations. San Francisco recently banned sales of bottled water at city and county government locations, and a Chicago alderman reportedly has proposed a special tax on bottled water (ironically, the idea is meant to cover a budget shortfall due to declining use of public water, which stands in sharp contrast to those who fear bottled water might actually deplete public sources). Restaurants such as Chez Panisse in Berkeley, Calif., and Poggio in Sausalito, Calif., have stopped selling bottled water in favor of filtered tap water.

Bottled water is being scrutinized by those who compare it to tap water, not other packaged beverages, says Jane Lazgin, director of corporate communications for Nestle Waters North America, Stamford, Conn. "In our on-the-go society, 70 percent of what consumers drink comes from a packaged container. But you can't get soda out of a tap," she says.

The reality is that bottled water is a popular beverage choice these days. Last year, bottled water volume increased 9.5 percent from 2005, making it the second-largest commercial beverage category, according to the International Bottled Water Association (IBWA).

"Bottled water is simple, refreshing and healthful because it has no calories," Lazgin says. "Especially in the small pack, bottled water is an alternative to other bottled beverages. Tap water is not a primary competitor. We think that people recognize the value of water to a healthy lifestyle, regardless of its source."

"We share the environmental …