A few weeks ago, a story about water rippled through the news when PepsiCo Inc. executives revealed that the company's Aquafina water brand was not sourced from spring water, as the snow-capped mountains on the sparkling blue label might have implied, but was in fact simply purified tap water.
The initial firestorm of controversy sparked by such a public admission from such a public corporation raged around the 24-hour news and online networks for a few days. Eventually, however, it was dampened by PepsiCo's forthright response to the crisis, and seemed to ebb away as the same consumer groups who had been flooding PepsiCo's call centers turned up the heat on the other big players in this market -- namely, Coca-Cola and Nestle -- instead.
Such candidness on the part of
PepsiCo, an
IW 50 Best Manufacturer for 2007, illustrates the benefit of coming clean to consumers in a crisis, and is yet another example of how the Purchase, N.Y.-based company is turning itself into a good example of positive positioning where issues of corporate social responsibility are concerned.
The water controversy story flows like this: At the end of July, a nonprofit consumer organization decided to expose what it saw as a "truth in advertising" issue and targeted PepsiCo with an aggressive public relations and phone call campaign to force the company to admit that it was, in effect, selling people a plastic bottle filled with tap water for a few dollars a pop.
From the moment the issue surfaced, it was clear there was no way for PepsiCo to simply ride out the wave of criticism without a response. Its Aquafina brand is currently No. 1 in the United States. And with wholesale sales of bottled water at around $11 billion last year, according to Beverage Marketing Corp., Aquafina's importance to PepsiCo corporate revenues is only likely to increase.
In the end, PepsiCo's public disclosure served to stem the tide of negative publicity, diverting it away from its own operations and contrasting PepsiCo with its competitors. Added to this, the company also changed its labeling practices to make Aquafina's source more clear by spelling out the words "public water source" on its label.
Such a straightforward response is consistent with what seems to be a corporatewide positioning strategy where issues of sustainability are concerned. As was
recently reported on IndustryWeek.com, PepsiCo was the No. 1 purchaser of "green" power for 2006, with more than double the kilowatt hours generated from solar, wind, geothermal, hydro, biomass and biogas sources than its closest competitor. All told, three PepsiCo companies made the EPA Top 25 list, indicating an overall corporate commitment toward developing a sustainable supply chain.
In addition, the
U.S. Green Building Council recently recognized PepsiCo's Blue Ridge Gatorade facility in Wytheville, Va., with its Leadership in Energy and Environmental Design designation at a Gold-level certification, making it the largest food and beverage site in the world to achieve this designation.
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