Why the bottled water brand is using less recycled plastic

Gerolstein They look like a test tube with a screw thread. The PET bottle blanks are inflated with compressed air and heat in a matter of seconds, cooled down and shortly afterwards filled with mineral water. 800 million bottles are filled every year here in Gerolstein in the Vulkaneifel – one third each in non-returnable PET, returnable PET and returnable glass bottles.

A one-way bottle used to consist of 75 percent recycled PET. “Unfortunately, at the beginning of the year we had to reduce the recycling share to 30 percent,” explains Roel Annega, CEO of Germany’s leading mineral water brand in terms of sales, Gerolsteiner. “There is not enough recycled PET on the market, the prices have become unbearable for us,” says the manager about the step backwards in terms of sustainability.

The problem is also confirmed by Isabell Schmidt, Managing Director of the Plastics Packaging Industry Association. “A lot of competition for the secondary raw material has long since broken out,” she says. For example, PET recycled from beverage bottles has been more expensive than new material for many years.

“In the meantime, the prices were twice as high as for new plastic, they are currently about 40 percent higher,” says the Gerolsteiner boss. He therefore demands: “We beverage manufacturers need a legal right of first refusal for recycled PET from our bottles.” This is the only way the industry can become climate-neutral. From 2040, PET in the EU must contain at least 65 percent recycled material.

The Society for Packaging Market Research has determined that only just under 45 percent of all PET bottles are turned into bottles again. Many industries use the plastic in films, fabrics or dashboards to improve their carbon footprint. “You can never make a bottle out of a bag again,” says Annega.

Gerolsteiner boss demands own cycle for PET bottles

The manager believes that the legislature made a historic mistake in taking back disposable bottles in 2003. “As soon as a non-returnable PET bottle leaves our farm, it no longer belongs to us – unlike returnable bottles and crates.” In Germany, these are almost completely recycled in a closed cycle. Disposable PET bottles, on the other hand, are sold to the highest bidder by recycling centers.

Gerolsteiner is not the only one in the industry who is demanding a right of first refusal. “We beverage manufacturers finally need a right of first access to PET from the deposit system in order to be able to make bottles out of bottles again,” said John Galvin, Germany head of bottler Coca-Cola Europacific Partners, recently to the Handelsblatt. This is the only way the industry can achieve its sustainability goals.

>> Read here: Lidl opposes the introduction of a returnable obligation for beverage bottles

Gerolsteiner, for example, has committed to reducing its 2016 CO2 emissions by around 60 percent by 2030. A large part of the emissions are due to packaging and transport. “We could transport 60 percent of our production by rail. That would save a lot of CO2,” says Annega. But that was not possible until now because the diesel locomotives in the Eifel could not pull heavy freight wagons.

The single-track line to Cologne was largely destroyed by the flood disaster in July 2021. “The track is now being electrified, which is very good. But we need two tracks for transport,” the Gerolsteiner boss appealed to politicians. “As a mineral well, we cannot relocate our production to regions with better transport connections.”

Gerolsteiner was directly affected by the flood. The Kyll river had flooded the company’s two water centers by two metres. The water from the 26 active springs comes together there and is pumped to the bottling plant via underground pipelines. “Everything was covered in mud, we couldn’t produce for about a week,” says Annega. “Hygiene is extremely important for our natural product.”

“We need water for eternity”

The magma in the Vulkaneifel provides natural carbonic acid and a high mineral content. Gerolsteiner is allowed to use 20 percent of the deep water formed every year at a depth of up to 250 meters. “We only take ten percent, because we need water for eternity,” says Annega.

He is concerned about the high level of nitrate pollution in the groundwater in some regions of Germany. According to the Federal Environment Agency, limit values ​​were exceeded at 27 percent of the measuring points in 2020. “Unfortunately, there are still regions in Germany where the import and use of Dutch liquid manure is part of the farmers’ business case,” says Annega.

If the nitrate seeps through deep soil layers after decades, mineral wells would also have a problem. The 59-year-old Dutchman has been managing Gerolsteiner for four years. The business economist previously worked in eight European countries. from Ireland to Greece, and worked at Coca-Cola and Nestlé, among others.

For geological reasons, his native Netherlands does not have a single mineral well. In Germany, on the other hand, there are almost 160 bottlers, many of whom have been owner-managed for generations. Gerolsteiner was founded in 1888 by mine director Wilhelm Castendyck, who discovered a mineral spring while drilling for carbonic acid. Today the company is 51 percent owned by the Bitburger Group and 32 percent by the specialty gases supplier Buse KSW. The rest are held by private individuals.

The mineral water industry, which sells 13 billion liters a year, is in the process of consolidating. Nestlé withdrew its Vittel 2022 water brand from the German market in 2022. Retail groups such as Aldi Nord and Edeka are buying up wells. The French Alma Group swallowed Rhönsprudel.

The consumption of mineral and medicinal water has been falling for years – from almost 140 liters per capita in 2019 to less than 130 liters in 2022, according to the Association of German Mineral Springs. More and more Germans are switching to tap water – for environmental and cost reasons.

The Gerolsteiner brand asserts itself

Gerolsteiner has recently developed better than the industry. In 2022, revenues increased by eleven percent to 318 million euros. Sales are above the pre-Corona level, even if the catering business has not yet fully recovered. Contrary to the trend, Gerolsteiner held its ground against private labels, which increased significantly due to inflation.

The company deliberately kept its prices stable in 2022. “A company has to suffer a bit too – and not pass on all the additional costs to consumers,” says Annega. Only in February did Gerolsteiner raise the prices – “with a sense of proportion”, as the boss emphasizes.

Gerolsteiner is hoping for more sales from soft drinks. “We are number one for mineral water, but just in the top ten for apple spritzer. There’s still a lot of room for improvement,” explains Annega. With products such as fruity water without sugar and sweeteners, cold brew tea and lemonades in flavors such as “Grilled Watermelon Mint”, the traditional brand wants to appeal to the tastes of younger customers.

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