Chief Executive Officer of Nestlé Waters North America, Kim Jeffery (left) and Poland Spring plant manager Cameron Loraine stand outside the Kingfield plant earlier this month. (David Hart photo)KINGFIELD -- Kim Jeffery is President and Chief Executive Officer of Nestlé Waters North America Inc. based in Greenwich, Conn. He oversees the largest bottled water company in North America with 9,000 employees, 27 plants and more than 100 facilities.

Jeffrey visited the Kingfield Poland Spring plant in July, a subsidiary of NWNA, and met with the employees and local media.

During his visit, he answered questions and talked on a wide array of topics ranging from the company's success to water resource management to questions from opposing viewpoints.

About Kim Jeffery
Jeffery joined the company in 1978 as Central Division Sales Manager. Over the following years, he advanced to lead posts in sales, marketing and operations progressing to Executive Vice President and Chief Operating Officer before assuming the company’s top position in 1992.

Jeffery received a B.A. degree from Hillsdale College in Hillsdale, Mich. He, his wife, Mary, and their four young children live in Greenwich, Conn.

According to a company bio, for 30 years, Jeffery has been at the vanguard of the rapidly growing bottled water industry. When Jeffery joined the company, shortly after its inception, Perrier was the only brand marketed. Since then Nestlé Waters North America has developed into the leading bottled water company in America. With sales of more than $4.2 billion in 2007, the company holds seven of the top 10 U.S. brands. Nestlé Waters N.A. is also the leading bottled water company in Canada.

Maine spring water
“Maine is quite unusual," Jeffery explained. “Glacial till has created this medium of sand as a filter so it emanates from the ground with very low minerals and tastes great. It's our best tasting spring water in the United States. We have over 100 spring sites in the United States and the ones in Maine are by far the best tasting.”

Shortly after Jeffrey joined the company after working for other food and beverage industries, the company purchased Poland Spring.

When they purchased Poland Spring, he said, they were bankrupt doing about $3 million in revenue a year and now it’s a billion dollar business today. Poland Spring is NWNA’s best corporate producer with expected growth ahead, Jeffery said.

 “It's pretty simple really; I’ve been here 32 years. There were 30 people in this company when I joined it in 1978. The first business we bought was Poland Spring. The company has been in business since 1845 and we bought it in 1980 and has been producing spring water continuously. The brand was well known. The idea that it all comes from Maine is part of the history of that company,” Jeffery said. He explained that this might change over time due to the fact that they might not be able to find spring water that is logistically beneficial for them to harvest and bring to the market. “We are pretty far north right now, as a matter of fact.”

In terms of opposition to the water bottling industry, Jeffery said, “I find it somewhat interesting to me today that we have some people who think we should not be doing this, but we’ve been doing this for 150 years. I think we predate lots of businesses in Maine."

Jeffery spoke of good news in the industry and said that his water bottling business is up eight percent this year. “I think it’s by far leading the beverage category in growth this year because soft drinks are still negative, the vitamin water type products are negative, juices are down, the isotonic business is pretty flat,” he said, but tea is up. Tea and water are the only two things growing this year, he said.

Success explained
Jeffery said one of the reasons for the company success was that they saw the need and growth in bottled water industry well before the Cokes and Pepsis and were committed to it. “The other reason is that we purchase great brands. Four of our six regional spring water brands are over 100 years old. Poland Spring is our largest and most famous spring water brand, but we have similar brands of similar age and followings like Arrowhead in California or Ozarka in Texas. We bought brands that people knew that came from specific places. Poland Spring is a brand, but it’s also a town.”

There’s a heritage about these businesses that are known to people, he explained. “We were doing something different. Aquafina is just a name that somebody came up with out of the blue. Poland Spring is a place and we can show you the water that comes from that place. It’s a whole different mindset,” he said.

The third reason for the company success in water bottling is the people who work for them. "We have great, hardworking people who have great values and are good to us. Our people are proud to work here, the quality of our people is better, the commitment of those people is better. At the end of the day when you ask why one company is better or more successful than another, I point to the idea that we’re a human assets company… when other companies are doing the same things as us, I point to the people which makes us more successful."

Poland Spring in Maine
Jeffery said the benefits of a plant in the community are jobs, good wages and the contributions they make in the communities that they work. Jeffery said that they pay $35 million a year in Maine in wages, $5 million in property taxes, $2.5 million in income taxes. Poland Spring employs over 800 people in Maine. “It’s also from what we put back from a volunteer work standpoint or monetary philanthropy.”
He also said they pay over $50 million to trucking companies although they constantly look to mitigate truck traffic, such as creating local waste water systems like in Kingfield.
Jeffrey said they’re not meeting the capacity of the two lines they installed when they opened two years ago. Depending on the markets he said he felt they were a couple of years away from reaching capacity or talking about adding additional lines. The current plant is designed for four bottling lines, but is currently operating with two.

He also explained that they are not using any of their other springs in Dallas or Pierce Pond. “Those two facilities are sitting in reserve for the future,” he said.

Jeffrey said even though the Kingfield plant is far away from the big markets, the plant is very efficient which offsets transportation costs. In the high season, trucking can be a little costly in Maine, because most trucks are leaving the state with product and not arriving for backhauls, he explained.

Water resource
“Water in its macro sense is a very interesting subject because about 70 percent of water usage in America is for agriculture, 20 percent for industry and the other 10 percent gets used by all the rest of us,” Jeffrey explained. That 10 percent is for household usage such as laundry, showers, washing your car and drinking. “Only less than one percent gets ingested by humans. That’s the macro thing.”

Jeffrey said that Maine will never have a problem with water being one of the most water rich states in the nation and least populated. He said they’ll always be plenty of water for agriculture, industry and human consumption with eight inches of rainfall a year.

“Then you look at places like California which are natural deserts and they divert water from other places to create green cities and have water for everybody. Those places are going to be in trouble.”

“Still I would say, if you’re going to attack the issue of water, you have to address this industrial pollution and agricultural use of water. In one hand you have agriculture using whatever water they want in places like deserts in California where people have water rights. They’re growing things such as rice which is one of the more water intensive crops you can grow and you’re growing it in the desert. We don’t have good water resource management techniques in the United States when looking at water in the Macro sense."

Nestlé’s usage
“If I came back to a company like ours we are using 1/100 of one percent of potable water that’s used everyday in America. It’s a really small amount. If you look at the whole beverage industry it's not even one-half of a percent of all the water used. You use four gallons of water to make a gallon of beer, three gallons to make a gallon of soft drink and you use 1.3 gallons to make a gallon of what we do.

"If we want to manage our water better we need to know how much we are using and how much we got and in most of the United States we don’t know either of those things. We’re not measuring and we’re not using wisely so we need better conservation.”

Jeffrey said that Maine has a very good framework of laws to manage water although there’s been a lot of controversy over the Poland Spring usage of water. "We are a very small user and at the end of the day if you went to the DEP they’ll show you a laundry list of restrictions they have on people like us that use water, to make sure the water is used wisely and not disrupting your neighbors. We need those kinds of frameworks for the rest of the country."

Jeffery’s look at the future of water
Jeffrey said that municipal water supply is at a deficit right now and filtration of municipal water and bottled water usage will increase over the next 25 years. He mentioned a $350 billion bill to bring municipal infrastructure inline with 2010 standards for municipal water. “Don’t know if that’s going to happen.”

He said this will create opportunities for industries in the filtration and purification business, but won’t affect Nestlé. "We don’t compete with tap water."

"People who are opposed to us in many cases want to suggest that we compete  against tap water. That’s an argument that they’re trying to make to say tap water is cheaper, it’s better and all that kind of stuff.” Jeffery said he’s not going to say if it is or it isn’t. “I’m just going to say that if I look over the past 15 years, 70 percent of our growth has come from other packaged beverages, mostly soft drinks."

“Globally water is a big problem in the next 40 years. The population is going to double. We don’t have enough crops to feed them, we don’t have enough water to grow new crops, we don’t use our water wisely. So if I look at it globally, water is a big issue. It’s a bigger issue than climate.”

Jeffery was asked if Nestlé was looking to position themselves to create rights to water for supply and profit in the global demand for water. “No, we have no interest in acquiring large water supplies for anything more than what we need to make our products.”

Nestlé owns 14,000 acres of land in America which utilizes over 100 different spring sites for water to make food and beverages. If they need extra water they buy it from the municipality, he said. “All of the water is harvested sustainably and all of that land, like the 300 acres I was just walking earlier (in Kingfield) sits in conservancy and all natural. We are not doing anything on that land to destroy the habitat or the natural ecosystem. We are protecting that water source,” he explained. 

“We have a minimal impact from an environmental standpoint, because every gallon used is replaced.”

Opposition to Nestlé
“I think those arguments are emotional. If you look at the two organizations that are always saying something about us, it’s either Food and Water Watch or Corporate Accountability International –-neither one of those organizations are a solution based NGO (Non Governmental Organization). Meaning they don’t want to walk into my company and help us be a better company environmentally. They want to come and tell us that we should not have a license to operate a business. They are more anti-capitalist campaign people than they are people trying to create solutions from an environmental standpoint." Jeffery also said that if someone truly wanted to offer an environmental solution, they would not start with his usage, they’d start with the big users that are using water without regard to how much is being replenished by the aquifer on the natural hydrologic cycle… and that ends up being agriculture for the most part."

Nestlé’s bottles
Jeffery spoke of the criticism generated by the use of petroleum based PET bottles, and why some say if the company went away or people switched to 100 percent tap water, our landfill demands will lessen.

The CEO explained that their bottles are the thinnest in the industry and represent less then 10 percent of the total PET containers in the beverage industry. "If we were not in business, the 90 percent would still be there in just the beverage industry alone and does not include all of the other plastic packaging used in America for other food and non-food items."

Jeffery said we need to do a better job with recycling in America and we need to get all plastics back for recycling. “People can be in favor of banning our industry, but it’s not going to solve any environmental problems. And from my perspective it’s going to take a healthy beverage off the market that people can drink everyday.”

In some states, such as Maine, redemption practices allow for 90 percent of the plastic to return to markets.

“When we get better at recycling, there’s going to be a big market and we’re all going to feel better about what we are doing from a recycling standpoint. We have to get some of this product back into the goods and services.”

In today’s marketplace, most all captured plastic is sold to China and not recycled to form new PET containers. Jeffery said that the current market conditions forces Nestlé to make its bottles from virgin resin. This petroleum-based virgin resin is turned into a polymer for bottle production. The availability in the marketplace to buy PET flakes to truly make new bottles from recycled content is currently to costly based on availability of recycled content.

Jeffery said his company would like to change that by building a processing facility in the future. The proposed facility will capture all PET bottles, either owned by Nestlé by redemption practices, curbside or municipal recycling and other collection programs. The facility would also take PET from other manufacturers. He explained that by controlling the flow of PET and creating true recycled content, costs could become more appropriate to use recycled product rather that virgin material to make containers.
"We would like to do something now to position ourselves for the future,” Jeffery said.

If successful with this operation and technology, the arguments and complaints about Nestlé’s petroleum intensive bottling making process would go away, he said.