If only you could bottle the stuff…
Nestlé's proposed water-bottling plant has a town divided
There’s something magical about an ice-cold, half-liter bottle of pure spring water. It’s not just the liquid inside—it’s something else, something that hints at the awesome organizational power of the human race. Harnessing the administrative and mechanical power it takes to fill a bottle of water from a snow-capped peak and deliver it thousands of miles to a consumer’s thirsty lips is truly a mind-boggling enterprise.
Even the package is beautiful to behold. While tiny beads of condensation drip slowly down the icy mountain depicted on the label of Nestlé's Arrowhead brand of spring water, words of absurd encouragement entertain the water drinker. “Live like a rock star,” “Feel like a movie star,” the bottle reads. And it’s true—celebrities do seem to love bottled water. You always see them sipping it in those promotional documentaries they make to push their latest offerings.
But then, who doesn’t drink bottled water nowadays? Gyms and parks still have water fountains, but does anyone use them anymore? In corporate boardrooms, they used to keep a pitcher and glasses on the table for thirsty capitalists—now everyone sits there with his or her own hygienic, factory-sealed bottle.
In fact, the individual-sized water bottle may be ultimate symbol of modern consumerist society. It is convenient, portable, disposable and even a bit fetishistic—a perfect triumph of the power of marketing. Somehow, the companies that package (in petroleum-based plastic) and sell this stuff have been able to convince us to buy something that falls from the sky for free. What’s more, we’re willing to pay more for it than what we pay to put gasoline in our cars.
Bottled water is now so popular it has become a $35 billion a year business. Industry experts predict that with sales growth approaching 15 percent per year, bottled water may soon be the world’s most preferred packaged beverage. But how often do we think about where that water is coming from?
In McCloud, a quaint village of about 1,300 people on the eastern slope of Mt. Shasta, residents are thinking a lot about bottled water.
That’s because Nestlé Waters North America, a subsidiary of the Swiss multinational food giant Nestlé—the largest food company in the world—wants to build an enormous water-bottling plant at the site of an abandoned lumber mill just a few blocks from McCloud’s cute-as-a-button downtown. It is a prospect that thrills some in the town—many of whom who are still reeling from the loss of the mill and the employment it provided. But it is also a prospect that frightens other residents, who fear that Nestlé will draw down the local water table, wreak havoc on the peace and quiet the town now enjoys and drive away potential tourists, who are currently the town’s main source of revenue.
“I think this issue has divided the town big-time,” Sid Johnson, a ranch caretaker, nine-year McCloud resident and project opponent, said. “I don’t know if it’s 50-50 or 60-40 for or against. We just don’t know. I try to stay friends with people who are for it, so I don’t try to get into anyone’s face and get angry. I just try to appeal to their good sense on the thing.”
The issue breaks along jagged and unreliable lines of class, ideology and age. While some old-timers say it’s the well-off, part-time vacationers and new arrivals who don’t want the plant, just as many long-time (and full-time) residents seem to have misgivings as well. Each side accuses the other of spreading misinformation about the project.
“People need to wake up and see that the contract [with Nestlé] doesn’t give them anything,” Johnson said. “We’ve got … a foreign corporation coming in to buy our water supply for peanuts.”
The town’s complicated deal with Nestlé is contained in a 43-page contract between Nestlé and the McCloud Community Services District (MCSD), which happens to be the only form of elected governance operating in McCloud. With no mayor or town council, ultimate approval of the plant will fall to the Siskiyou County Board of Supervisors, which is now overseeing an environmental review of the proposed plant, due sometime this fall.
The contract, however, has been a hugely divisive issue, so much so that it is currently the subject of a lawsuit brought by a group called Concerned McCloud Citizens, which sued the district in Siskiyou County Superior Court, alleging that the contract was foisted onto the community without public participation and that the services district overreached its authority in approving the plant. A judge ruled that the district could not legally seal the deal until an environmental review was completed, which threw the contract into legal limbo. A formal ruling is due July 21, the day this article is set to come out. Nestlé has already vowed to appeal the ruling.
Opponents of the project point out that the contract allows the town to sell an almost unfathomable amount of spring water—some 1,600 acre-feet per year—for a somewhat unimpressive sum of around $350,000 a year. Not a bad price for some 521 million gallons of water. Nestlé will also be able to pump an unlimited amount of groundwater to use as it sees fit, a proposition that many project opponents fear will suck the water right out of their own wells.
“You know, there’s no inflationary clause, and they’re taking a huge amount of water for that [$350,000],” Johnson said. “They pollute with their plastic containers. I just hate to see it come about with people not knowing the facts”
A pint of bottled water currently sells (as an individual unit) for about a dollar. That works out to about $8 a gallon, retail. Nestlé's deal allows it to buy that water for less than $.0008 per gallon. What’s more, it locks in the deal for 50 years, with an automatic 50-year extension. If fresh spring water, already a scarce resource in most parts of the world, can already fetch $8 a gallon, imagine what it will be worth in the year 2105.
Nestlé and its proponents in town say those numbers don’t tell the whole story, pointing out that the plant’s real economic impact on the town will come in the form of as many as 300 direct and “secondary” jobs. A study commissioned by Nestlé and completed by UC Davis business professor Robert Smiley found that, once the plant is in full production mode, it would throw $25.5 million into the local economy, pay $1 million in property taxes and would “generate $367 million in total economic output in the county.” In a county where unemployment hovers around 10 percent and the per capita income is $24,063, a stimulus of that size is hard to say no to.
Dawn Snure, who has lived in McCloud for five years and in Siskiyou County most of her life, said the plant is much needed.
“This could revitalize the town, make it a healthy community,” Snure said. “Those of us who live here and work here need jobs to stay here. The water industry is a lot more environmental than the timber industry. I feel it’s a good compromise.”
Snure, however, may already have tasted the benefits of Nestlé's presence in McCloud. She was interviewed where she works, at an office on the town’s one-horse main drag, at a place called the McCloud Community Resource Center. It looks like the kind of place a tourist might stumble into to ask where a night’s lodging or a good sandwich could be found. But the center is actually a nonprofit community space that offers Internet, after-school tutoring and other services to town residents.
It also happens to be the headquarters of Nestlé's community outreach project in McCloud. Last year, Nestlé donated $6,500 to the center so it could publish a community newsletter. It also rents office space to Dave Palais, a Nestlé public-relations man who serves as the public face of the corporation in its dealings with McCloud.
Palais’ office in the center is small and unassuming, equipped with little more than a sagging couch for guests and a small desk and chair for Palais. The walls are wood-paneled and covered with children’s drawings. Palais himself, when I met him by accident at the center, was dressed in a gray T-shirt, long gym shorts and a pair of beige loafers that had seen better days. Either Palais is a master of disguise—deliberately avoiding the pitfall of being labeled a “city slicker” by any potentially suspicious townsfolk—or he’s a bit of a slob.
His first gesture in our interview was to offer me an ice cold bottle of Arrowhead water. Naturally, Palais is in favor of the plant.
“We’re just trying to become a customer of the district,” he said. “We’re not buying [the town’s] water rights. I’m not going to deny our overall goal is business, but I’m proud of this company, and I believe we’re here to do the right thing.”
Palais has been accused by some residents of hoodwinking the service district board into signing the contract. Many project opponents say the board (whom one critic derided as “two loggers and two housewives") had little experience in big-business negotiations and sprang the Nestlé deal on the town in 2003 without any warning at all.
Diane Lowe, who helped form the McCloud Watershed Council and who splits her time between McCloud and Chico, said she was astonished when, at the only public meeting held about the plant, the board abruptly approved the plant.
“We had no inkling the board would just say, ‘Sounds good to me,'” she said. “The community went into shock.”
But as Palais points out, the board had been actively pursuing a water-bottling plant since 1998. The district met with four other companies during that time, including Dannon, which wanted a controlling interest in the town’s water rights. Failing to get it, Dannon set up shop a few miles over the hill from McCloud in nearby Mt. Shasta.
“They [MCSD] had contacted us back then, and at that time we had no plans to come this far north,” Palais said. After deals with other companies fell through, he said, Nestlé and McCloud decided to give each other another chance.
“We’re still here and we’re still working on it. We’re not going anywhere” he said, lamenting that the company had already put around $1.5 million into the deal and was still years away from bottling any water. “It could be a long battle. I suppose if it turns into such a battle … [and] if we found another community that welcomed us with open arms, we could potentially decide it isn’t worth it. The business will decide that.”
Palais also was quick to point out that, if it wanted to, Nestlé probably could just as well have built its plant without going through the trouble of negotiating a contract with McCloud.
“The contract is just a water supply contract,” he said. “It has nothing to do with the facility. We’re buying a piece of private property. As long as we go through CEQA [the California Environmental Quality Act], we can drill a well and try to pump water from it. Or we can find another source. That’s the irony … if the there’s no contract, the guarantees [for the town] disappear.”
Lowe clearly wishes Nestlé and its contract would disappear.
“Mining of water—I call it mining because that’s what it is—it’s not exciting,” she said. “To me there is no pride in this business compared to the pride of what was here before. People worked hard, and they made a product and were proud of it. They didn’t leave—their families stayed here for generations. The momentum here in town to try and figure out how this happened and how on earth it can be overturned is just enormous.”
Part of what makes McCloud special, and what has made the story of Nestlé's moving in so intriguing, is that town was once under the complete ownership of a private corporation. McCloud was born a company town—planned, managed and completely controlled by the McCloud River Lumber Company, which became known to residents as “Mother McCloud.”
Although the company transferred many of its assets and, most important, its water rights, to the townspeople in 1963, the specter of Mother McCloud still haunts the town—its streets are laid out in a grid that seems just a little too orderly, and many of its houses, if one can look past the extra rooms and added porches, are all strangely similar to each other.
The mill, once a bustle of activity, with buzz saws screaming from dawn to dusk and a steady stream of trucks rumbling in and out, now sits silently on the edge of town. Huge, wooden warehouses await deconstruction. Rusting cargo containers bearing the logos of long-extinct logging firms sit on disconnected train tracks amid fields of weeds and wildflowers. There had been a plan to rehabilitate the mill site and use it for a micro-enterprise zone, where woodworkers, log-cabin builders and possibly a community college might breathe some life back into the site. But the Nestlé deal effectively squelches that idea.
A series of companies carried on limited operations at the mill until it was permanently shut down in 2002. But a sense of longing for the stability and order that Mother McCloud provided still lives on. The caretaker of the town museum, a former schoolteacher who has lived in McCloud since the 1940s (and who insisted she not be quoted directly for this article), said life in a company town was carefree and warm. There was free steam heat and electricity, a company doctor, a company store and company picnics for the kids. If you needed food or blankets or a shovel, you signed your name on a receipt and the company took it out of your pay. Legend has it the company would even send a man out to change burned-out light bulbs in employee homes.
Back in those days, the local high school boasted a championship basketball team. This year, the tiny high-school class contained no graduating seniors. For many residents, watching the town wither has been like keeping a deathwatch on a bed-ridden friend.
“This town has had a tough life, but even with the closing of the mill it has survived,” said local business owner and plant supporter Penny Heil. “A lot of people have had to move away, and so many of those who didn’t are working two or three jobs just to live here because they love it so much.”
Mike Stacher, who recently became the general manager of the McCloud Community Services District, has inherited the controversy left to him by the previous board of directors. He is a self-described optimist, a lifelong resident of the area and a man who seems unaccustomed to sitting on the hot seat. His support of the project, he said, comes from the realization that McCloud doesn’t have many other options.
“As far as I’m concerned, any money we get is more than we were getting yesterday. … I’ve heard people talk and I’ve heard them say ‘environmental.’ And in the end of their dissertations, they say, ‘Has Nestlé given up enough money?’ The greed is not a factor to me. Is Nestlé going to make billions and we’re only going to make hundreds of thousands? You know, it’s not a factor to me. We made the best deal that we thought we could at the time, and I still think it’s a good deal.”
Stacher said he has heard the environmental arguments—that there is not enough water to go around, or that drilling a borehole into the spring will rupture the lava tube it may be flowing through and cause the water to be lost. He doesn’t buy either. For one thing, he said, McCloud captures four times as much water as it actually uses. And scientists he’s talked to tell him that the real danger of putting in boreholes lies in liberating more water than can be controlled, he said.
To Stacher, the Nestlé deal is a chance for McCloud to get back on its feet.
“I would have been happy for just the jobs,” he said. “We are deficit spending all the time—we budget in the deficit for necessary services. In a place that has no business, about the only way to make new revenue is to get into the customer’s pockets, and the customers are tired of us getting into their pockets.”
For many in McCloud, the issue is strictly economic. But others are beginning to wonder about the whole nature of the bottled-water business. Water is, after all, the most important ingredient for life on earth. Is it right, they ask, to turn it into a commodity?
“Now that I know more about the bottled-water industry, and I know how precious water’s becoming to us everywhere, I’m not even for any kind of bottled water anywhere,’ Sid Johnson said. “I think we’re right on the cusp of learning how important our fresh water in McCloud is. To have it controlled by a foreign corporation, frankly, scares me.
“Water should be for the people, and it shouldn’t be for making a profit. If you think about the kind of attitude we’re creating, we’re selling our private water supplies off all across the country. I’ve gone out and bought bottled water and never thought a thing about it. Now I’m thinking about it, and it’s just the most ridiculous thing I can think of.”