Water is both a finite and precious resource and yet is often taken for granted. In fact, within the next two decades, demand for fresh water will surpass supply by 40 percent. For many consumer goods companies, growing and operating their business amidst this backdrop can be challenging. Jill Wyant, executive vice president and president of Global Food and Beverage, introduced the Water Risk Monetizer as a resource to help address these challenges and provided guidance on shaping water strategies that are economically beneficial, environmentally sustainable and socially equitable.

1. CONSUMER DEMAND IN A TIME OF
WATER SCARCITY
JILL WYANT
Executive Vice President & President, ECOLAB Global Food & Beverage
24 June 2015

2. Water Crisis Making Headlines

3. 167Gallons of Water
=
55Gallons
of Water =
39,090Gallons of Water =
450Gallons
of Water =
700Gallons
of Water =
13Gallons
of Water =
Increased Attention on Water Needed to Produce
Everyday Products

4. Macro Trends Influencing Consumer Behavior
AGING
POPULATION
GROWING
MIDDLE CLASS
POPULATION
GROWTH
RISE OF THE
MILLENNIAL
CONSUMER
50% MORE
PEOPLE by 2050,
with most growth in
emerging markets
in EMEA, Japan,
and China will
shift CONSUMER
BEHAVIOR;
Drive HEALTHCARE
More DISPOSABLE
INCOME,
more meals away
from home
Socially-conscious,
less BRAND-LOYAL
$ $$$$$

5. 45% MORE ENERGY 50% MORE FOOD
30% MORE WATER
By 2030 the World Will Need:

6. 2.5%
= FRESH
WATER
glaciers, ice caps
groundwater
lakes, rivers,
ice/snow
1.72%
.75%
.03%
97.5%
= SALT
WATER
vs.
Of the earth’s water supply:
Water Inventory

7. Source: World Water Assessment Programme
20%
Industry
10%
Domestic
70%
Agriculture
Industry is the Second-Largest
Fresh Water Consumer

8. In 2014, the global water crisis rose to a
top-three business risk for impact and likelihood
70% of companies surveyed identify water
as a substantive business risk
US-based Fortune 500 companies:
Global Water Crisis impact upon
80%
60%
affects their decisions on
where to locate facilities
affects business growth and
profitability within five years
face potential
physical challenges
face reputational risks
94%
69%
Business Impact
SOURCES: World Economic Forum
2013 CDP Water Report
Bridging Concern with Action: Are US Companies Prepared for Looming Water Challenges?, Pacific Institute and VOX Global 2014
survey of US-based Fortune 500 companies

9. By 2020, safely return to
communities and nature an
amount of water equal to what is
used in finished beverages and
their production
Committed to “zero-discharge” operations
as a critical part of a long-term target to
build a resource-saving and no-emission
management enterprise
Intends to cut water use per pound of
product by 20% by 2020, compared
to a 2008 baseline
Cut total water intake by 30% by
2020, compared to 2010 baseline
Aims to reduce direct water
withdrawal per ton of product
by 40% by 2015, compared
to 2005 baseline
Goal to reduce water consumption per
guest night by 25% by 2020, 30% in
water-stressed areas
Further reduce water consumption
20 percent per occupied room by
2020 from a 2007 baseline
Water-use-per-vehicle
reduction goal of 30%
from 2009 to 2015
2015 goal to improve
freshwater efficiency by 5%
2020 target to reduce water
intensity by 15% from 2011 levels
20% reduction in fresh water use
by 2015, compared with 2006
15% improvement in water
use by 2015 as compared
to 2011
The Most Forward-Looking Companies Have
Aggressive Water Goals

10. REPUTATIONAL
CONSIDERATIONS
& Consumer Demand
REGULATORY
CHANGES/
INFLUENCES
INNOVATION
Lack of water
leading to new,
effective technology
We’re in 1 Million Customer Locations Across
Industries and Geographies

11. Case Study #1
A range of innovative solutions to help
PepsiCo increase its operational water
use efficiency.
The savings captured by
our solutions add up:
DRYEXXTM
DRY CONVEYOR
LUBRICANT
ADVANTISTM
CLEAN-IN-PLACE
PROGRAM
3D TRASARTM
COOLING WATER
TECHNOLOGY
WATER SAVED WATER USED
saved in conveyor
lubrication annually at
bottling plants
in clean-in-place per year at one
PepsiCo plant.
24
million
gallons
WATER USED
REDUCE
BY
REDUCE
UP TO
MORE
THAN
175
million
gallons
45%
Water Conservation

12. Case Study #2
Ecolab innovation helped dairy achieve
consistent Clean-in-Place performance
— and consistently high quality milk
“The safety and quality of
our products – as well as our
reputation – are at stake.
We always look for ways to
operate more efficiently,
but never at the cost of
safety and quality.”
-- Roger Domask, Operations
Manager, Kemps Rochester plant
REDUCED WATER
CONSUMPTION FOR
CLEANING
REDUCED CLEANING
TIME
PRODUCT QUALITY
IMPROVEMENT
IMPROVED AVERAGE
PASSING
SAVEDCONSERVED
Water Conservation
963,750
gallons
of water
1,295
hours
cleaning
time
1 point
from
2013 to
2014

13. • Water is inexpensive
• Not yet personal
• Lack of demand for
water-saving innovations
Challenges for Change

14. Water is Undervalued:
Prices inverse to risk
Chengdu
$0.33
Amsterdam
$3.42
Barcelona
$3.04
Istanbul
$2.04
Addis Ababa
$0.15
Johannesburg
$0.54
Rio de Janeiro
$1.10
Sao Paulo
$0.89
Chicago
$0.88
Los Angeles
$1.85
Dallas
$0.79
Monterey
$0.88
Mumbai
$0.28
Beijing
$0.59
Seoul
$0.58
Phnom Penh
$0.16
Shanghai
$0.31
Sydney
$2.76
Sources: Aqueduct, WRI, GWI

15. Water Scarcity Puts Most of the World’s Biggest
Economies at Risk
Chicago
Top 10 Largest Populations
Top 10 Fastest Growing Economies
Top 10 Biggest Economies
Cities experiencing
water scarcity or
current drought
Los Angeles
Mexico City
Rio de Janeiro
Sao Paulo
New York
London Paris
Istanbul
Lagos
Cairo
Mumbai
Delhi
Beijing
Seoul
Tokyo
Shanghai
Osaka
Guangzhou
Sources: Aqueduct, WRI, GWI

16. Scarcity Impacts:
Financial Implications to Business
Revenue X
Cost of Goods Sold X
Operating Profit X
Operating Expenses X
Depreciation X
Ebit X
Interest X
Tax X
Profit After Tax X
Water scarcity
increases the cost
of water, which
reduces profit
margins.
Water scarcity
limits availability
of water, leading
to decreased
production and
loss in revenue.

17. 33 corporations
publicly disclosed
to investors that
water scarcity
threatens 1−6%
of their annual
revenue
1.70%
2.49%
5.74%
5.00%
4.10%
1.80%
2.15%
5.88%
0.75% 0.78%
CDP Disclosed Revenue at Risk (2014)
CONSUMER
DISCRETIONARY
CONSUMER
STAPLES
ENERGY
FINANCIALS
HEALTHCARE
INDUSTRIALS
INFORMATION
TECHNOLOGY
MATERIALS
TELECOM
SERVICES
UTILITIES

18. Impacting Revenue & Profits
saw a
in its California-based
carrot division profits
in early 2015 due in part
to drought followed by
intense rains
28% drop
U.S. Based Meals
Company
Global Agriculture Producer
reported a in 2014 Q4
profits as a drought in the U.S.
damaged pastures used to raise beef
12% drop
North American
Food Company
introduced an
on coffee
packs in early 2015 to
offset impact of Brazil
drought
8% price
increaseestimated that
natural disasters linked to a
changing climate cost the company
around $400 million annually
Consumer Packaged Goods
Manufacturer
Australian
Agribusiness
reported a 64% drop in 2014
profits due to a prolonged drought
• cut grain deliveries by 23%
• nearly halved grain exports
on the development of an $81 million
bottling plant in Southern India in April
2015 due to resistance from local
farmers who cited concerns about
strains on local groundwater supplies
decided not to move forward
Fortune 500 Beverage Company
Source: Ceres 2015

19. Introducing a New Way to Factor Water Risks
into Business Decisions
Assess Understand Quantify Calculate
water scarcity
risks at site and/or
enterprise level
the full value of
water to your
business
water risks in
financial terms
that make
business sense
potential revenue
at risk

20. Actionable quantification of water-
related risks in financial terms
Informs efforts to assess and
manage water risk
From Operations at Risk to Risk Mitigation
The Solution
Water required > water share
= potential revenue at risk
Market price +
water risk premium
= risk-adjusted water price
The Challenge
Water price does not
reflect its full value
Water scarcity makes it
harder to access water
necessary to operate
Business Implications
Reduced profit
margins
Decreased production
& loss in revenue
BUSINESS OUTCOME
$

21. Visibility into Operational Risks
Beverage plant water usage = 5,353,591
Water Cost
Risk Adjusted Water Cost
Potential Revenue at Risk
Likelihood of Revenue Loss
$
LOS ANGELES
RIO
MUMBAI
$1.85
$1.11
$.17
$.31
$ $6.33
$ $5.59
$ $4.65
$ $4.79
37%
<1%
96%
17%
BEIJINGLOW
HIGH
MODERATE
MODERATE

22. INCORPORATE a risk-adjusted cost of water
and potential revenue loss into analysis
MAKE THE CASE for proactive water
management strategies
IDENTIFY operations/locations at greatest risk
MONETIZE rate of return
for water management improvement projects
SELECT where and how to increase
production or meet demand in new regions
Use the Water Risk Monetizer to:

23. Inside a Food & Beverage Processing Plant
Turning Information Into Action

24. Water Impacts the Total Plant
REPURPOSE | REUSE | REDUCE
COOLING SYSTEM EFFLUENT
BOILER
WASTEWATER
PLANT PROCESS
SOFTENERFILTRATION
INFLUENT
REVERSE OSMOSIS
Complex Connections Across Operations

25. Original w/6 areas

26. METERING/
MONITORING
Track water and analyze
usage trends. Place water
meters on total plant water,
critical systems and top 10
consumers of water.

27. EQUIPMENT
SHUTOFF
LOST WATER
Water left running while
equipment is not, can
result in a significant
amount of wasted water
Steam Trap Leak
1/8” at 100 psig =
LEAK PREVENTION
55,460
GALLONS
of lost condensate
of STEAM
TRAPS
fail if not
regularly
maintained
15-30%

28. Opportunities to repurpose
water exist throughout the plant:
• once-through systems
• collecting homogenized cooling water
• treated plant effluent water
WATER
REPURPOSING

29. CIP OPTIMIZATION
Clean-in-Place Systems account
for 20-40% of total water usage in
a food or beverage facility.
To optimize CIP systems:
• use burst rinsing
• utilize rinse recovery
• prevent excess rinses

30. Save up to
30%
UTILITY SYSTEM
OPTIMIZATION
Reduction Strategies:
• Increase cooling and
boiler water cycles
• Maximize condensate
return
• Maintain steam traps
Recycle/Reuse Strategies:
• Re-use production water as boiler & cooling
water makeup
• Eliminate once through cooling water
on the air compressors/pump seal water with
recirculating cooling water
• Use case washing and homogenizer water as
cooling water makeup
WATER
with the
3DTRASARTM
Platform

31. INFLUENT
REVERSE OSMOSIS
PLANT PROCESS
BOILER
SOFTENERFILTRATION
COOLING SYSTEM
WASTEWATER
EFFLUENT
Average*
SAVINGS
143,173 m³
226 tons
37,257 GJ
TOTAL
$726,663
Averages based on Total Plant Assessments conducted and implemented at 45 food
and beverage manufacturing and processing facilities.
Water Reduction Strategies Can Uncover Huge
Savings Opportunities

32. What is the
Value of Water
To Your Business?

33. The Business Questions
?
?
What are the most pressing business risks due to water
scarcity?
What strategies are in place to ensure access to the water
needed to operate?
Are global growth projections reasonable given water scarcity?
What actions are being taken to reach water reduction goals?
How can supplier partnerships help in meeting these goals??
?

34. 34
LEARN MORE
• Stop by our I-Zone booth for a demo
• Talk to our water experts
• Visit us at ecolab.com or
WaterRiskMonetizer.com

35. Bringing unlimited resourcefulness to the challenge of limited resources.
For more information, visit www.Ecolab.com.