2017 IBWA Progress Report

2017 PROGRESS REPORT

2018 IBWA BOARD OF DIRECTORS CHAIRMAN Lynn Wachtmann Maumee Valley Bottlers, Inc. Napoleon, OH VICE CHAIRMAN Brian Grant Pure Flo Water Company, Inc. Santee, CA TREASURER Brian Hess Niagara Bottling, LLC Ontario, CA IMMEDIATE PAST CHAIRWOMAN Shayron Barnes-Selby DS Services of America, Inc. Atlanta, GA PRESIDENT AND CEO Joe Doss International Bottled Water Association Alexandria, VA 2018 IBWA BOARD OF DIRECTORS Joe Bell Aqua Filter Fresh, Inc. Pittsburgh, PA Philippe Caradec Danone Waters of America White Plains, NY Tara Carraro Nestlé Waters North America, Inc. Stamford, CT

Andrew Eaton, PhD Eurofins Eaton Analytical, Inc. Monrovia, CA Douglas Hidding Blackhawk Molding Co., Inc. Addison, IL Scott Hoover Roaring Spring Bottling Roaring Spring, PA Dan Kelly Polymer Solutions International, Inc. Medford, NJ Kari Mondt Allied Purchasing Mason City, IA Greg Nemec Premium Waters, Inc. Minneapolis, MN Dennis Rivard Crystal Mountain Products, Inc. Gahanna, OH Bryan Shinn WG America Company Birdsboro, PA Robert Smith Grand Springs Distribution Alton, VA Louis F. Vittorio, Jr. EarthRes Group, Inc. Pipersville, PA Bill Young Absopure Water Co., Inc. Plymouth, MI

2018 IBWA EXECUTIVE COMMITTEE CHAIRMAN Lynn Wachtmann Maumee Valley Bottlers, Inc. Napoleon, OH Shayron Barnes-Selby DS Services of America, Inc. Atlanta, GA Joe Bell Aqua Filter Fresh, Inc. Pittsburgh, PA Philippe Caradec Danone Waters of America White Plains, NY Tara Carraro Nestlé Waters North America, Inc. Stamford, CT Brian Grant Pure Flo Water Company, Inc. Santee, CA C.R. Hall Hall’s Culligan Wichita, KS

Brian Hess Niagara Bottling, LLC Ontario, CA Henry R. Hidell Hidell International Hingham, MA Scott Hoover Roaring Spring Bottling Roaring Spring, PA Dan Kelly Polymer Solutions International, Inc. Medford, NJ Bryan Shinn WG America Company Birdsboro, PA Bill Young Absopure Water Co., Inc. Plymouth, MI

A LETTER FROM THE PRESIDENT Throughout 2017, the International Bottled Water Association (IBWA) has continued to promote and defend the U.S. bottled water industry. As part of that effort, we have been celebrating and trumpeting bottled water’s new position as America’s No.1 packaged beverage (by volume). This important milestone is further evidence that consumers are increasingly focused on healthy hydration. It also demonstrates that, despite the efforts by our critics to discourage people from drinking bottled water, sales and consumption of this safe, healthy, and convenient product continue to grow.

According to preliminary 2017 statistics from Beverage Marketing Corporation (BMC), bottled water sales and consumption continue to grow, and it is still the No.1 beverage product (by volume). U.S. bottled water consumption increased to 13.7 billion gallons in 2017, up 6.6 percent from 2016. Bottled water sales increased by 8.7 percent, now totaling $17.8 billion (wholesale dollars). Per-capita consumption is up 6.6 percent in 2017, with every person in America drinking an average of 41.7 gallons of bottled water.

IBWA’s dedicated team of members, staff, and consultants accomplished a great deal in 2017.

Once again, we concentrated our efforts on highlighting bottled water’s stringent state and federal regulations, our members’ environmental sustainability efforts, the safety of all plastic bottled water containers, and the importance of water, including bottled water, in a healthy diet.

As bottled water grows in popularity, our critics have increased their efforts to prevent us from

doing business. In particular, they are now engaged in a coordinated nationwide attempt to oppose bottled water companies seeking to site, permit, and re-permit their plants. Both groundwater and public water system source waters are being targeted, and all bottled water companies—small, medium, and large—would be negatively impacted. As a result, IBWA increased its activity on this important issue in 2017, and we continued to defend against the many false claims being made about bottled water.

For many years, IBWA worked to overturn a flawed policy that allowed individual parks within the National Park Service (NPS) to ban the sale of bottled water. Our efforts were rewarded on August 16, 2017, when the NPS rescinded that policy. Our industry’s victory here was important because many places (such as zoos, colleges, and cities) were using the NPS policy to support their efforts to ban the sale of bottled water. However, our work on this issue is not finished. At the end of 2017, new legislation was introduced in Congress that would codify into law the NPS bottled water sales ban policy.

Another win for IBWA’s members in 2017 was a Federal Court decision to strike down an Obama-era Department of Labor overtime pay rule. This burdensome regulation would have substantially increased costs for IBWA members by raising, from $24,000 to $47,500, the amount that employees would have to earn before they would be exempt from the overtime pay rules. IBWA was a member of a coalition that worked to oppose and overturn this legally flawed rule.

Adding more pro-water consumption messages to the Dietary Guidelines for Americans (DGAs) when they are updated in 2020 remains a priority for IBWA. The DGAs are important because they serve as the foundation for many nutrition policies and programs in the United States.

Based on previous efforts by IBWA and several public health organizations, the current 2015 DGAs expressly state that calorie-free drinks— especially water—should be the primary beverage consumed. IBWA continues to promote the importance of water as part of a healthy diet, and we are continuing our efforts to have water added to the MyPlate food nutrition graphic, alongside of dairy.

Implementation of, and compliance with, the Food Safety Modernization Act (FSMA) continues to be a very important issue for all IBWA members. IBWA has therefore continued to provide FSMA guidance to members through webinars, in-person seminars, PCQI workshops, Splash e-newsletter and Bottled Water Reporter magazine articles, and special member bulletins.

IBWA also continued efforts to expand our outreach to federal and state legislators. In 2017, IBWA members and staff had meetings with 122 congressional offices, and members hosted nine plant tours at their facilities to help build critical relationships with state government officials. We also monitored more than 800 bills and 400 regulatory proposals concerning bottled water. Recycling, bottle deposit bills, sales ban proposals, bottled water taxes, and the plant siting and permitting issue mentioned earlier

Joe Doss continued to be a major focus in states and towns throughout the United States.

The 2017 IBWA Progress Report summarizes IBWA’s recent accomplishments in maintaining a favorable business, regulatory, and public affairs climate for the bottled water industry, and in protecting and advancing the interests of all IBWA member companies. Our success is the result of a true team effort by members, staff, and consultants. IBWA has made great strides in ensuring the success of the bottled water industry, but there are many challenges looming on the horizon. However, you can remain confident that we will continue to fight hard every day to defend this safe, healthy, convenient product and proactively promote the facts about bottled water to consumers, the media, and government officials.

Joe Doss IBWA President and CEO IBWA 2017 PROGRESS REPORT | 1

BOTTLED WATER IS NOW THE NO.1 PACKAGED BEVERAGE IN THE US It’s official. On March 9, 2017, the International Bottled Water Association (IBWA) and Beverage Marketing Corporation (BMC) announced that bottled water is the No.1 packaged beverage in the United States, by volume, moving ahead of carbonated soft drinks for the first time, according to 2016 statistics.

Bottled water’s steady climb to this prestigious position is a clear and positive sign that our industry is continuing to benefit from consumers’ increased focus on healthy hydration and lifestyle choices. In fact, almost all of bottled water’s gains in volume during the past 15 years have come from the decreased consumption of carbonated soft drinks.

BMC’s statistics also demonstrate that, despite the efforts of our critics to discourage people from drinking bottled water, sales and consumption continue to grow.

Preliminary data from BMC shows that bottled water sales increased by 8.7 percent in 2017 and will total $17.8 billion (wholesale). In 2017, total U.S. bottled water consumption grew by 6.6 percent to 13.7 billion gallons, up from 12.8 billion gallons in 2016. In addition, percapita consumption was up 6.6 percent in 2017, with every

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person in America drinking an average of 41.7 gallons of bottled water. PET volume of bottled water increased by 6.1 percent (9.1 billion gallons), and home and office delivery (HOD) volume grew by 1.3 percent (1.4 billion gallons).

people through IBWA’s social media channels alone. IBWA members also used this toolkit, which helped magnify our audience reach and amplified this good news story about bottled water. (To learn about IBWA’s other 2017 campaigns and social media toolkits, turn to p.11)

To celebrate this achievement and educate consumers, IBWA created a “Bottled Water Is No.1 for a Reason” social media campaign. The campaign’s social media toolkit included posters (see examples above) and posts that reinforced the reasons consumers choose bottled water— because it is healthy, convenient, reliable, and refreshing.

This eight-week campaign reached tens of thousands of

This great industry news demonstrates that consumers are making their voices heard in the marketplace, which is where it counts most. They have made bottled water the No.1 beverage in United States for a reason—because it is a great tasting, safe, healthy, convenient packaged beverage product that is enjoyed at home, in the office, and on the go.

However, there is another very important reason why bottled water is now the No.1 packaged beverage product in the United States: the many years of hard work by IBWA members and staff. Our efforts to communicate the facts about bottled water to the media, consumers, and government officials have been very effective. This milestone event for the bottled water industry is a shared achievement— and it feels great to be able to say, “We’re No.1.”

IBWA EFFORTS TO ASSIST MEMBERS WITH BOTTLED WATER PLANT SITING AND PERMITTING

To meet the consumer demand that BMC predicts for bottled water, industry professionals will have to continue to be innovative in their business strategies and actively advocate at the federal and state levels. The following pages provide a summary of the many activities IBWA members, staff, and consultants undertook to support bottled water in 2017.

In recent years, there have been increased attempts by anti-bottled water groups to prevent bottled water companies from siting, permitting, and re-permitting their plants in the United States. These anti-bottled water groups are becoming more organized, coordinating their efforts, and sharing information with each other. While their actions are often aimed at large bottled water companies, many of their proposals would also impact small and mid-size bottlers.

2017 [P]* Volume Share of Stomach

by U.S. Beverage Segment (Billions of Gallons) Tap/Others

10.9%

CSDs

19.7%

Value-Added Water 1.0% Energy Drinks

1.1%

Wine/Spirits

2.2%

Sports Beverages

2.5%

Fruit Beverages

4.9%

Bottled Water

Tea

21.8%

5.9% Milk

8.8% Beer

10.2%

Coffee

11%

Source: Beverage Marketing Corporation (2017) * [P] = Preliminary

It doesn’t matter if a bottler’s source is groundwater or from a public water system—all are being targeted. Bottled water critics falsely claim that our companies use excessive amounts of water, cause water shortages and droughts, pay less than consumers for municipal water, acquire and sell so-called “public” or “free” water for profits, and cause many other negative environmental and social impacts.

IBWA is moving forward with a coordinated strategy to push back against the bottled water critics and present the facts to the media, government officials, consumers, and other relevant audiences. To date, IBWA has taken the following actions to help members address this issue: • Created a special working group of IBWA members.

• Continued to oppose state and local legislation that would prevent our members from siting, permitting, or re-permitting their plants.

• Developed a social media toolkit to address specific issues raised when communities object to a bottled water plant siting or permitting. That toolkit includes a series of e-posters (containing illustrations such as the one above) and corresponding posts for social media platforms, such as Twitter, Instagram, Facebook, and Pinterest.

• Developed a draft water stewardship code of practice. This document includes operating principles and practices, and a voluntary certification program for IBWA members.

• Began identifying industry allies and third-party organizations who can support our efforts.

IBWA member input has been very helpful as we work to fine-tune an industry strategy to deal with this important issue. We stand ready to help any member that needs assistance in getting their plant sited, permitted, or re-permitted.

IBWA 2017 PROGRESS REPORT | 3

March 16,

2017

The Honorab le Ryan Zin Secretary ke U.S. Departm ent of the Int 1849 C Str erior eet Washington NW , DC 20240

1700 Diago nal Road, Suite 650 Alexandria , VA 22 Ph: 703-647 314 -4605 jdoss@bo Web: www.b ttledwater.org ottledwater .org

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NATIONAL PARK SERVICE RESCINDS BOTTLED WATER SALES BAN POLICY After many years of active member involvement, IBWA was successful in getting the National Park Service (NPS) to rescind its bottled water sales ban policy, which was adopted in 2011. About 22 national parks had banned the sale of bottled water, but they still allowed soft drinks and other sugary beverages, which are also packaged in plastic, to be sold. That made no sense.

4 | INTERNATIONAL BOTTLED WATER ASSOCIATION

Although the NPS policy did not significantly affect the bottom line of many IBWA members—because very few sold bottled water at national parks—it got a lot of unbalanced media coverage. That added to the very negative narrative about bottled water that is promoted by our critics. And, of course, there is always a negative connotation associated with anything that is banned by the federal government. Places such as zoos, colleges, and cities were using the NPS policy to support their efforts to ban the sale of bottled water.

During the past several years, IBWA members made numerous contacts with their senators and representatives to discuss this issue. As a result of those actions, language

recommending that NPS rescind the policy was included in the law passed by Congress to fund the federal government in 2017. In addition, at the request of IBWA members, 22 members of Congress sent a letter to the Department of the Interior (DOI), urging the agency to rescind the policy.

IBWA also personally met with DOI and NPS staff twice in 2017 to discuss the issue.

All of those member efforts paid off last August, when the NPS rescinded the bottled water sales ban policy. This ended years of a misguided policy that prevented the healthiest beverage choice from being available to visitors at some of our nation’s parks. Our success in getting the policy rescinded would not have been possible without critical engagement from IBWA members.

But our work on this matter is not done. At the end of 2017, legislation was introduced in the U.S. House of Representatives that would codify into law the NPS bottled water sales ban policy. Therefore, we must remain vigilant and continue our efforts to educate members of Congress and the DOI about this issue.

FDA GRANTS IBWA REQUEST FOR AN ABBREVIATED NUTRITION FACTS PANEL ON BOTTLED WATER LABELS Under U.S. Food and Drug Administration (FDA) regulations, if a company wants to have a zero-calorie declaration on its bottled water label, it is required to include a Nutrition Facts Panel (NFP) on the label. Of course, that NFP

IBWA’s proposed MyPlate revision, which includes water.

would contain all zeros, which doesn’t provide consumers with any meaningful nutrition information.

In an effort to seek relief from this unnecessary requirement, IBWA petitioned FDA to permit bottled water products that include a zero-calorie declaration on the label to use an abbreviated NFP. We noted that consumers already know that water has no fat, no calories, or no amount of any other items required to be disclosed in the NFP. FDA approved IBWA’s request and will now allow bottled water products to use the following simple statement—“For nutrition information, call [insert telephone number]”— rather than requiring them to use a full NFP on the label.

Important notice: Only those IBWA member companies that signed onto the IBWA petition can use the abbreviated NFP. If you weren’t part of the IBWA petition, you can, however, submit your own separate petition to FDA. If your company is interested in pursuing this matter, please contact IBWA staff and we will give you the necessary information for you to petition FDA successfully.

DIETARY GUIDELINES FOR AMERICANS RECOGNIZE THE IMPORTANCE OF WATER IN A HEALTHY DIET IBWA continues its efforts to ensure that the next edition of the Dietary Guidelines for Americans (DGAs) includes more references to water as a healthy hydration source.

The DGAs are important because they help Americans make healthy food and beverage choices and serve as the foundation for many nutrition policies and programs in the United States.

IBWA worked hard to make sure that the 2015-2020 DGAs supported increased access to water as a healthy beverage choice. They expressly state that calorie-free drinks—especially water—should be the primary beverages consumed. The current DGAs also encourage a shift to

healthier, no-sugar added beverages—such as water—in place of sugar-sweetened beverages. Further recognizing the importance of water, a nutrition guide located on the USDA’s website, MyPlateMyWins, specifically highlights the need to choose water instead of sugary drinks.

While those were all very positive outcomes, IBWA has already begun our efforts to have the 2020-2025 DGAs include more positive messages about water—including bottled water. In 2018, IBWA will continue our efforts to have water added to the MyPlate food nutrition guide, right next to the dairy symbol (see proposed revision above). We are very excited to be a part of the National Drinking Water Alliance (NDWA), which is also seeking to have water added to the MyPlate graphic. Other members of this broad coalition include the Center for Science in the Public Interest, American Heart Association, and American Academy of Pediatrics.

IBWA 2017 PROGRESS REPORT | 5

label would help implement those recommendations and improve consumer health and well-being.

FEDERAL COURT STRIKES DOWN DOL OVERTIME PAY RULE WORKING TO HAVE FDA ALLOW BOTTLED WATER LABELS TO INCLUDE THE WORD “HEALTHY” While hard to believe, current FDA regulations don’t allow bottled water to use the word “healthy” on the product label. In 2017, IBWA submitted written and oral comments to FDA in support of revising the current food regulations so our products can use the word “healthy” on the label. However, because the usual regulatory process could take several years, IBWA also submitted a separate letter to FDA requesting that it use its enforcement discretion to allow “healthy” claims for bottled water.

In our comments, IBWA pointed out that “healthy” claims are intended to reflect prevailing dietary guidance and help consumers adopt more healthy eating practices. We also noted that the 2015-2020 Dietary Guidelines for Americans and other federal dietary recommendations consistently recommend increased water consumption. Allowing bottled water products to include the word “healthy” on the

6 | INTERNATIONAL BOTTLED WATER ASSOCIATION

Another 2017 success for IBWA was the defeat of the Obama-era Department of Labor (DOL) overtime pay rule. The rule would have substantially increased the annual salary threshold that determines whether employees will be exempt from receiving overtime pay. Currently, employees earning more than $24,000 are generally not eligible for overtime pay. Under the DOL rule, an employee would have to earn $47,500 before he or she would be exempt from the overtime pay requirements.

This would have, therefore, substantially increased employee costs for IBWA members.

As a result of a legal challenge by the business community and several state governments, the U.S. District Court in Eastern Texas struck down the rule, stating that the DOL improperly looked at salaries instead of job descriptions when determining whether a worker should be eligible for overtime pay. IBWA was a member of a coalition that submitted comments in opposition to the rule. We also signed onto letters urging Congress to delay or overturn it.

In addition, IBWA prepared a guidance document to help members comply with the rule (in case the legal challenge had been unsuccessful), and we presented an online webinar on this subject. IBWA will continue to track and actively participate in any future actions taken by Congress

Pure Flo Water Co. hosts Howard Ou (left), a district staff member from Rep. Scott Peters’ (D-CA) office, at its Santee, California plant.

(From left) IBWA’s 2017 Chairwoman Shayron Barnes-Selby and Derieth Sutton welcome Rep. Ken Calvert (R-CA) to the IBWA Annual Hill Day Lunch.

or the Trump Administration on this issue, and keep members updated on any new developments.

IBWA ADVOCACY ON CAPITOL HILL—AND IN BOTTLED WATER PLANTS In 2017, IBWA hosted legislative fly-ins almost every month of the year, which resulted in members and staff meeting with 122 congressional offices. Included among

Power Through the IBWA PAC

Nearly 50 IBWA members took to the halls of Congress during the IBWA Annual Hill Day on June 7, 2017, to seek continued support for policies that will promote the growth and consumption of bottled water.

those fly-ins was the annual June Hill Day, which was held during the IBWA June Board and Committee Meetings. Almost 50 IBWA members participated in that event, making more than 54 visits with members of Congress and their staff to talk about issues important to the bottled water industry.

To help IBWA members further establish relationships with their members of Congress, IBWA co-sponsored two industry events on Capitol Hill in 2017: the North American Meat Institute’s Annual Hot Dog Lunch in July and the American Bakers’ Association’s “Bakers’ Dozen Awards” Reception in October. IBWA provided our Bottled Water Matters private label bottled water for both

of those events. Hundreds of congressional staff and many senators and representatives were in attendance, providing IBWA yet another opportunity to educate elected officials about bottled water.

Plant Tours. Hosting a bottled water plant tour for government officials, legislators, and regulators is an easy and incredibly important way for IBWA members to educate them about the issues that are important to our industry and your company. Tours help us build critical relationships with officials who can help IBWA achieve our policy goals and defeat burdensome proposals. IBWA set a goal of having members host two plant tours in 2017—and members successfully hosted nine plant tours with members of Congress.

IBWA’s Political Action Committee (PAC) is a vital tool to help the association educate members of Congress about bottled water and build champions for our industry.

Contributions to the PAC make it possible for IBWA to support political candidates who support the bottled water industry.

Due to the generosity of IBWA members, the IBWA PAC exceeded its 2017 goal of $30,000, raising $42,700. IBWA’s PAC goal for 2018, which is an election year, is $50,000.

To receive information about the IBWA PAC, members must provide IBWA with an Authorization to Solicit form. IBWA can’t contact members about PAC issues unless we have that form. However, submitting an Authorization to Solicit form does not obligate members to make a contribution to the IBWA PAC. It just gives the association permission to keep them informed of PAC activities and events.

To continue our work on the many important issues facing the bottled water industry, IBWA needs a strong and active PAC. For more information about the IBWA PAC, or to request an Authorization to Solicit form, please contact PAC Board Co-chairs Brian Grant or Robert Smith or IBWA staff members Cory Martin or J.P. Toner.

IBWA 2017 PROGRESS REPORT | 7

2017 BY THE NUMBERS In 2017, bottled water was the favorite packaged beverage of Americans.

Bottled water sales increased by 8.7% over 2016 numbers (wholesale dollars).

IBWA was successful in getting the National Park Service to rescind its bottled water sales ban policy.

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Curbside recycling rate of PET, single-serve bottled water containers.

Volume of water produced in United States, up 6.6% over 2016 numbers.

Average amount of bottled water each American consumed in 2017.

IBWA held 122 meetings with members of Congress and their staff—and hosted nine plant tours at bottled water facilities.

IBWA reviewed and monitored more than 800 pieces of state legislation and nearly 400 state regulatory proposals.

The IBWA PAC exceeded its 2017 fundraiser goal of $30,000. (For 2018, $50,000 is the goal!)

More than 1,100 bottled water and coffee professionals attended the IBWA and NAMA conference colocation in Grapevine, Texas, with 151 exhibiting suppliers on the trade show floor.

Number of participants attending IBWA’s 14 Preventive Controls Qualified Individual (PCQI) workshops since 2016.

Bottled water companies delivered millions of liters of water to those in need after 2017 natural disasters, including Hurricanes Harvey, Irma, and Maria.

IBWA 2017 PROGRESS REPORT | 9

BOTTLED WATER

ADVOCATING IN THE STATES With all 50 states in session, 2017 was another very busy year on both the legislative and regulatory front. IBWA monitored nearly 800 pieces of state legislation and nearly 400 state regulations that would have impacted bottled water companies. Recycling, bottle deposit bills, sales ban proposals, bottled water taxes, and the plant siting and permitting issue mentioned earlier continued to be a major focus in states and towns throughout the United States.

Recycling. For IBWA and the bottled water industry, recycling remains a high priority. Some states are looking at bottle deposit programs, updating existing deposit schemes, and exploring new ideas (e.g., extended producer responsibility programs and product stewardship). California, Connecticut, Iowa, Maine, New Jersey, New York, Oregon, Rhode Island, and Virginia were all active on recycling issues that impact bottled water.

Oregon, in particular, was very active in 2017, as the state finalized and implemented an increase to its bottle deposit fee from 5 to 10 cents. IBWA was actively involved in numerous meetings and discussions about the timing of the increase, as well as the new labeling requirements for bottlers. A strong coalition in the state, which included IBWA, successfully worked to ensure that all companies with products subject to the existing deposit program were given ample time to comply with new labeling requirements.

A California law enacted in 2016, requires all beverage manufacturers, including bottled water companies, to provide information to the California Department of Resources Recycling and Recovery (CalRecycle) on the total amount of both virgin and recycled content plastic used to 10 | INTERNATIONAL BOTTLED WATER ASSOCIATION

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IBWA continues to assist our members in complying with the new law, particularly because submitting false information can lead to a criminal charge of perjury. Once this data is collected, it is likely that legislation will be introduced in California to mandate that all plastic containers include a certain percentage of recycled material. The state has already enacted a recycled content law for glass container manufacturers.

Other State Issues. IBWA continues to work on many other state legislative and regulatory issues, including bisphenol A (BPA) restrictions, labeling statements that are different from what FDA requires, and bottled water sales bans.

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IBWA THIRD-PARTY OUTREACH ACTIVITIES IBWA continues to work closely with state government and other industry groups. In 2017, we actively participated in several important meetings, among them the National Conference of State Legislators’ Legislative Summit, and the Council of State Government’s Eastern and Western regional annual meetings. IBWA also works with groups like the State Government Affairs Council and the Council of State Retail Associations to discuss best practices on working in the states. Participating with these forums offer IBWA great opportunities to share the facts about bottled water with key decision makers and allies.

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Having an online presence is vital for effective communication, brand identity, and media awareness. Two strong websites anchor IBWA’s online activities: bottledwater.org and bottledwatermatters.com. Those sites allow visitors to quickly get up-to-date facts, stories, economic data, and other useful information about bottled water.

Nearly 30,000 people each month visit bottledwater.org.

IBWA tracks data and statistics to determine how people use our website, which enables us to refine topics based on user demand. This helps IBWA stay at the top of search engine results, which is important in ensuring that IBWA is the first source for bottled water information on the internet.

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COMMUNICATING OUR HEALTHY HYDRATION MESSAGES

IBWA continuously monitors other websites, news outlets, Facebook, Twitter, and blogs that mention bottled water.

We also actively engage in online conversations with key bloggers and influencers in targeted demographics (environmentalists, parents, college students, educators, etc.) to ensure that they know the facts about bottled water and are not mislead by the abundance of misinformation available on the internet.

Activists and bottled water critics continue to make false and misleading statements about bottled water. To counters those efforts, IBWA aggressively defends and proactively communicates the facts about bottled water.

IBWA comments immediately on online articles critical of bottled water, giving priority to major influencers such as CNN, Huffington Post, New York Times, and the Washington Post. We also send letters to online news outlets requesting corrections on inaccurate information and images used online.

We have a variety of audiences—media, consumers, legislators, regulators, social influencers, and other opinion leaders—and we use a variety of methods to get our messages across, including social media toolkits, traditional newspapers and magazines, internet news websites, and blogs.

The ability to engage with the media, supporters, critics, and consumers in real time is vital and can directly impact the perception of our industry and our products. IBWA continues to be seen as the leading media resource for bottled water information.

More and more people are getting their information from social media, so we’re stepping up our efforts in this area. In addition to our “Bottled Water Is No.1 for a Reason” campaign (see p.2), during the summer of 2017, IBWA ran an additional 10-week campaign—“Bottled Water: Where You Live, Work, and Play”—that emphasized the convenience of bottled water. The web posters (see examples at left) encouraged consumers to drink bottled water on the go, in the house, and at the office. Lastly, IBWA issues monthly social media toolkits that include Facebook posts, Instagram images, Pinterest pins, and Twitter tweets (with URLs to YouTube videos) members can share with their customers, legislators, friends, and family to educate them about bottled water. Those toolkits are distributed to members via email and the Splash e-newsletter.

CORRECTING MISINFORMATION Reaching out to the media is an important part of communications, and IBWA works hard at getting information to reporters in a timely fashion so that our position is included in relevant stories. When it’s not, IBWA sends letters to news outlets seeking corrections and additions to articles that misinform people. In 2017, IBWA posted comments and formal responses to online news articles and blog posts.

We also continued to send formal letters to editors, issue press releases, and prepare detailed position statements on several key issues. Copies of IBWA’s correction letters and media statements can be found at www.bottledwater.org/ newsroom, and members are encouraged to use, share, and reference them, as needed.

It sometimes seems like there is very little good news being reported about bottled water. But, that is not the case.

IBWA 2017 PROGRESS REPORT | 11

instructor certificate from the Food Safety Preventive Controls Alliance, and he continues to offer Preventive Controls Qualified Individual (PCQI) workshops around the nation.

IBWA has issued PCQI certificates to nearly 300 participants at 14 workshops in the past two years. PCQI workshops will continue in 2018, with locations to be announced.

Despite the efforts by activists to ban or restrict bottled water, the sales and consumption of this safe, healthy, and convenient product continue to grow. Bottled water becoming the No.1 beverage in the United States is evidence of that fact. IBWA will continue our efforts to provide the facts about bottled water and make sure that an abundance of positive stories about bottled water are available.

IBWA has prepared a detailed guidance document on the requirements of the FSMA Preventive Controls Rule. That document, combined with the draft audit check sheets, are the best tools available from IBWA to help companies prepare for an FDA inspection. Another guidance document on how to prepare for an FDA inspection was prepared for the association by Hogan Lovells, our legal counsel, and is also available to IBWA members.

HELPING MEMBERS COMPLY WITH FSMA AND PCQI EDUCATION Implementation of the Food Safety Modernization Act (FSMA) continues to be a very important issue for all bottled water companies. IBWA has therefore continued to provide FSMA implementation and compliance guidance to members through webinars, in-person seminars, Splash e-newsletter articles, Bottled Water Reporter magazine articles, and special member bulletins. FSMA education sessions were offered during the 2017 IBWA Annual Business Conference, which was held November 6-9 in Grapevine, Texas, and more will be offered in 2018 through webinars and live seminars.

In 2017, IBWA developed a new award program to recognize ordinary citizens and groups that do an outstanding job at promoting the value of recycling. IBWA announced our first two award winners on America Recycles Day on November 15: Janay Young (above), of Flint, Michigan, who created the Mission Protect Flint Project, and Fairfax County Public Schools (FCPS), of Fairfax County, Virginia, which has established the FCPS Get2Green program to promote student learning and action within their surrounding environment.

The Preventive Controls Rule became effective on September 18, 2017, for small companies (<500 full-time employee equivalents); it had previously become effective on September 19, 2016, for large companies (>500 full-time employee equivalents). The effective dates for very small companies (<$1 million in gross annual sales) will follow in 2018.

tion regulation and the Intentional Adulteration (IA) rule, which addresses the defense of the nationâ&#x20AC;&#x2122;s food supply.

Those rules will impact how bulk water is hauled to bottling facilities from remote sources. The IA rule exempts companies with annual sales under $10 million. However, even though only large companies are required to comply with the FDA IA rule, the IBWA Board of Directed voted to require all member companies, regardless of size, to continue with the food defense program IBWA adopted in 2004.

Two additional final FSMA rules were issued in 2017 that apply to bottled water companies: the safe food transporta-

In January of 2017, IBWA Vice President of Education, Science, and Technical Relations Bob Hirst earned a lead

12 | INTERNATIONAL BOTTLED WATER ASSOCIATION

PROMOTING INDUSTRY ENVIRONMENTAL SUSTAINABILITY EFFORTS IBWA published its Best Practices Framework Guidance document, which was produced by Antea Group (an independent third-party consultant) based on a water stewardship and best practices survey, key points from the Ceres Aqua Gaugeâ&#x201E;˘ framework, and common best practice examples from beverage industry experts. The purpose of the report is to help ensure that bottlers continue their efforts to be good stewards of the environment.

The best practices framework is presented in five topic categories: equipment check and process controls, meter use and water mapping, water recycling and reuse, training and education, and supply monitoring and management. The best practices framework is designed for all IBWA members to use, regardless of production size, location, or development stage of their water stewardship program.

Quantis, another third-party consultant, recently completed its report—Life Cycle Inventory and Environmental Footprint of Bottled Water for the North American Market— for IBWA. That study evaluated the environmental footprint for both small-pack and HOD bottle water production. The aim of the study was to understand the industry’s environmental performance and progress and set strategies for continued advancement. The study looked at CO2 emissions, energy use, and solid waste. It concluded that the bottled water industry has a very small environmental footprint. According to the report, the amount of materials used to make PET and HDPE plastic and glass bottled water containers has been reduced by 42.8 percent between 2007 and 2015.

Code of Practice for Water Stewardship. IBWA’s Environmental Sustainability Committee has prepared a preliminary draft “Code of Practice for Water Stewardship.” A subcommittee continues to develop key operating principles and practices for a voluntary certification program for IBWA members.

Recycling Efforts. Bottled water is now the No.1 beverage, and we need to ensure our consumers continue to do the right thing and recycle their empty containers. Bottled water continues to be the most common item in curbside recycling programs, with a recycling rate of 53.1 percent.

By comparison, soft drinks have a 20.4 percent recycling

IBWA is partnering with Keep America Beautiful, the nation’s iconic community improvement nonprofit, to educate people on how to improve recycling rates. rate in curbside systems. Thus, recycling education remains a critical issue for the bottled water industry.

IBWA continues to support efforts to increase consumer awareness about the importance of recycling. We are proud of our new partnership with Keep America Beautiful (KAB), which will help IBWA promote our pro-recycling messages by participating in a number of KAB’s social media campaigns, reaching millions of consumers. We also continue to be a sponsor of The Recycling Partnership (TRP), a leading national organization promoting curbside and increased local recycling.

TRP utilizes public-private collaborations to help local governments get the most out of their recycling programs by increasing resident participation and tonnage collected.

In addition to TRP, IBWA is a member of the Florida Recycling Partnership, Michigan Recycling Partnership, and the Northeast Recycling Council.

In an effort to promote the benefits of recycling, IBWA is creating a “Put It In The Bin” campaign. Our goal is to connect with third-party groups that share our recycling objectives and combine our social media resources to educate the public about recycling. In addition to a dedicated PutItInTheBin.org website, IBWA will share social media posters and posts with members and our third-party partners, which will expand our reach.

MEETING WITH FDA AND STATE REGULATORS Each year, IBWA meets with officials from FDA’s Center for Food Safety and Applied Nutrition (CFSAN), which provides an excellent opportunity to discuss our key issues with the officials who regulate the bottled water industry. During the meeting in 2017, IBWA and CFSAN staff discussed improvements industry would like to see to the FDA Ground Water Rule. In particular, IBWA is urging FDA to harmonize treatment options with some state regulations.

During the meeting with CFSAN, we also discussed needed updates to FDA’s good manufacturing practices (GMP) sanitization requirements for bottled water facilities. IBWA mentioned our support of ongoing research and validation studies on the effectiveness of ozone as a disinfectant at various concentrations and times of exposure. This would broaden the allowable use of ozone in FDA’s GMP rules.

California Proposition 65 BPA Issues. IBWA continues to work with a coalition in California that is seeking relief from the onerous requirements for BPA under Proposition 65, a law intended to help Californians make informed decisions about protecting themselves IBWA 2017 PROGRESS REPORT | 13

An IBWA member and a retail store have been sued under Proposition 65 for failing to provide a BPA warning for a bottled water product in a polycarbonate container sold at the store. In addition, another bottled water company was sued for selling bottled water sold in a polycarbonate container at homes and offices. IBWA is working with a coalition of bottled water and other food companies to assist our members with any Proposition 65 litigation.

We are also working with a California coalition to establish a reasonable Maximum Allowable Dosage Level (MADL) for BPA. The coalition has recommended an MADL of 157 micrograms per day for ingested BPA, which could be met by all food products, including bottled water. Our suggestion is still being considered by California officials.

A lot of misinformation about BPA continues to be reported in the press, and in legislative and regulatory bodies throughout the United States. As a result, IBWA will continue to strongly defend the safety of BPA and proactively educate legislators, regulators, and the media about the safety of this substance.

14 | INTERNATIONAL BOTTLED WATER ASSOCIATION

PJF Military Collection / Alamy Stock Photo

from chemicals known to cause cancer, birth defects, or other reproductive harm. However, California officials at the Office of Environmental Health Hazard Assessment (OEHHA) continue to ignore the sound science that clearly demonstrates the safety of BPA, which is used to make 3- and 5-gallon polycarbonate plastic bottled water containers. In fact, the agency that implements Proposition 65 has also stated it would not revisit its listing of BPA after FDA releases its BPA study report in December 2017. We expect that report will support the safety of BPA in food products.

FDA REVISED LABELING RULES FDA recently revised its nutrition labeling rules, which will mean several changes for bottled water labels. Customary serving sizes will increase from 8 to 12 ounces. If the container is less than 24 ounces, the label may have to show amounts per serving and per container. There may also eventually be impacts on sodium claims due to the increased customary serving size.

FDA also made changes to the fluoride labeling rules that could require listing this substance in milligrams per serving, as with other nutrients. Labels for bottled water with added fluoride currently list the fluoride content in milligrams per liter, in accordance with Center for Disease Control and Prevention (CDC) and American Dental Association (ADA) recommendations. At

IBWAâ&#x20AC;&#x2122;s request, FDA will exercise regulatory discretion for both sodium and fluoride labeling until such time as the rule can be revised to accommodate current labeling practices for bottled water.

PROVIDING EMERGENCY/ DISASTER RELIEF As always, IBWA members responded impressively to overwhelming needs for bottled water after Hurricanes Harvey, Irma, and Maria in 2017. Recovery efforts continued late into the year, especially in Puerto Rico, where the power grid disabled all water and wastewater treatment facilities for a substantial time.

IBWA participated in daily briefings with the U.S. Federal Emergency Management Agency (FEMA), and other federal, state, and territorial authorities and private sector

organizations, to identify areas of need. We then disseminated critical information to our members, who responded to those needs.

The bottled water industry delivered millions of liters of water to those most in need after these three disasters. As always, bottled water was there when it was needed most.

GROWING IBWA’S MEMBERSHIP IBWA’s continued success depends upon retaining current, and recruiting new, members—so we are committed to providing our members with excellent customer service and benefits that will help make their companies more successful.

In 2017, IBWA met its goal of recruiting 25 new members. In addition, the membership renewal rate for bottlers, distributors, and suppliers was 98 percent, which indicates a high level of satisfaction with the benefits of belonging to IBWA. For information on how you can join IBWA, contact IBWA’s Membership Department: cbass@bottledwater.org or 703.647.4615.

NETWORKING AND EDUCATING On November 6-9, 2017, the IBWA Annual Business Conference was held in Grapevine, Texas, in conjunction with NAMA’s CoffeeTea&Water show. The event brought together more than 1,100 bottled water and coffee professionals for a week of business networking and education.

The 2017 trade show was particularly successful—with 151 bottled water and coffee suppliers and vendors exhibiting on the trade show floor.

The IBWA/NAMA educational program offered 25 education sessions that covered business and technical topics relating to bottled water, as well as coffee and tea. Continuing education credits totaling 18.25 were available to certified plant operators (CPOs) seeking to keep their certification current. In addition, Curt Steinhorst, founder and CEO of Focuswise, presented a keynote address during the General Session on “Reaching the Distracted Customer.”

FUTURE GROWTH OPPORTUNITIES AND CHALLENGES While IBWA accomplished a great deal in 2017, there is still plenty more for us to do. Now that bottled water is the No.1 packaged beverage product, we are a more visible target for our detractors. But the future is exciting for the bottled water industry—and IBWA. We have a lot to be proud of. IBWA members make a great tasting, safe, healthy, and convenient product that consumers enjoy and depend on.

There will be many opportunities for us in the next several years, but there are also many challenges looming on the horizon. But IBWA members can remain confident that their association will continue to fight hard to defend their businesses every day. IBWA’s primary goal will, as always, be to serve the interests of its members. And with our talented team of members, consultants, and staff, IBWA will be able to ensure the continued success and growth of our member companies, the bottled water industry, and this association.

IBWA’s 2018 Chairman Lynn Wachtmann accepts the gavel from Immediate Past Chairwoman Shayron Barnes-Selby.

Attendees of the 2017 IBWA Annual Business Conference enjoy catching up during the Welcome Reception.

IBWA 2017 PROGRESS REPORT | 15

IBWA’S SOCIAL MEDIA

BY THE NUMBERS

WEB TRAFFIC: UNIQUE VISITORS bottledwater.org

LIKES Bottled Water Matters | 7,270 Hydration.Health.Happiness. | 202

284,285 268,299

FOLLOWERS @BottledWaterOrg | 1,645 @BottledH2OBabe | 3,376 @BWMatters | 670

2016

12,711

2017

The “Put It In The Bin” campaign will connect with third-party groups that share IBWA’s recycling objectives and combine social media resources to educate the public about recycling.

16 | INTERNATIONAL BOTTLED WATER ASSOCIATION

2016

14,957

2017

BOTTLED WATER REPORTER: DIGITAL EDITION (LIFETIME STATISTICS)

FOLLOWERS Bottled Water Matters | 227 FOLLOWERS Bottled Water Matters | 56

bottledwatermatters.org

Views 589,951 | 1,018 Subscribers 2017’S MOST POPULAR IBWA VIDEOS

1 2 3 4 5 6

34,687 Reads | 278,308 Impressions 75 Followers | 286 Shares

Recycling Empty Plastic Bottles (190,565 lifetime views) Inner Workings of a Bottled Water Plant (80,039) Recycled Holiday Wreath (66,878) Bottled Water Always There When You Need It (9,528) Bottled Water: Small Water User, Big Health Benefits (20,612) The Water Song (8,849)

IBWA’s Bottled Water Reporter magazine received an APEX 2017 Award for Publication Excellence.

FUTURE IBWA

EVENTS February 6-8, 2018

IBWA Winter Teleconference Board of Directors and Committee Meetings Meetings will be conducted via teleconference and begin at 11:00 a.m. on Tuesday, February 6; end 4:00 p.m.

Thursday, February 8

June 4-7, 2018

IBWA June Board of Directors and Committee Meetings Meetings will be held at the Hilton Alexandria Old Town in Alexandria, Virginia, and begin at 3:00 p.m. on Monday, June 4; end at 10:30 a.m. on Thursday, June 7

IBWA MISSION STATEMENT “To serve the members and the public, by championing bottled water as an important choice for healthy hydration and lifestyle, and promoting an environmentally responsible and sustainable industry.”

November 12-15, 2018

IBWA Annual Business Conference and Co-Location With NAMA CoffeeTea&Water Show Meetings will be held at the Hyatt Regency in New Orleans, Louisiana, and begin at 10:00 a.m. on Monday, November 12; end at 10:30 a.m. on Thursday, November 15

June 3-6, 2019

IBWA June Board of Directors and Committee Meetings Meetings will be held at the Hilton Alexandria Old Town in Alexandria, Virginia, and begin at 3:00 p.m. on Monday, June 3; end at 10:30 a.m. on Thursday, June 6 For more information, visit www.bottledwater.org/events.

The International Bottled Water Association (IBWA) is the authoritative source of information about all types of bottled waters. Founded in 1958, IBWA’s membership includes U.S. and international bottlers, distributors, and suppliers. IBWA is committed to working with the U.S. Food and Drug Administration (FDA), which regulates bottled water products. To achieve its goals and best represent its members and the bottled water industry, IBWA utilizes a system of committees to establish objectives and execute successful programs. IBWA committees include Communications, Education, Environmental Sustainability, Government Relations, Membership, State and Regional Associations, Supplier and Convention, and Technical.

IBWA | 1700 DIAGONAL ROAD | SUITE 650 | ALEXANDRIA, VA 22314 | 703.683.5213 | FAX: 703.683.4074 | WWW.BOTTLEDWATER.ORG