Water Fight With more than $600M in sales at stake, Poland Spring rushes to defend its purity

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POLAND SPRING – The way Thomas Sobol describes it, you’d expect to find Poland Spring is a scummy puddle teeming with mosquito larvae.

The original source of America’s best-selling bottled spring water “is stagnant and no longer flows,” according to court papers filed by Sobol and several other attorneys. Their complaint goes on to argue that the aquifer which once fed the spring, and still provides a significant fraction of Poland Spring bottled water, has been contaminated by sewage and a garbage dump.

The bottom line: “Poland Spring water is not ‘spring water,’ is not from ‘pristine and protected sources’ and is not ‘naturally purified.'”

Yet visitors to Nestle’s Poland Spring Museum and Spring House find no sign of contamination, stagnation or impurity. Emanating from a bedrock crack into a limpid pool lined with flat gray stones, the water is cold and clean and looks like it could slake a Saharan thirst.

The spring house has been restored to its full Victorian splendor, with Italian marble, brass fittings and a mosaic floor bearing the coat of arms of the Ricker family, who founded Poland Spring 158 years ago. Next door in the century-old bottling plant, museum-quality exhibits explain how Maine’s unique geology imbues Poland Spring water with its extraordinary taste and purity.

So what to make of Michelle Savalle and SDB Trucking v. Nestle Waters, the class-action lawsuit that Sobol and his colleagues filed in July? Are these attorneys a band of valiant servants to the public good taking on a cynical corporation? Or are they a bunch of greedy lawyers interested in nothing more than a big payday?

Wherever the truth lies, the suit offers a fascinating glimpse at how the wizards of our consumer Oz have turned ordinary water into a mystical entity subject to debates of almost philosophical depth – and how Nestle and other companies are reaping billions in the process.

“There is no truth to these allegations,” says Kim Jeffrey, president and CEO of Poland Spring.

Sobol and his fellow attorneys are the ones doing the deceiving and misleading, Nestle officials insist. On truthaboutpolandspring.com, a Web site Nestle set up in response to the suit, the company bemoans the proliferation of tort lawyers and class-action claims.

“As a company with a product that is in great demand,” the site complains, “we’ve become a target for lawyers who make their living suing people.”

There is no doubt of the galloping demand for bottled water. A decade ago, Americans consumed about 10 gallons per capita of bottled water a year. Today they drink twice that much.

This year bottled water is expected to surpass coffee, beer and milk to become the second-most-consumed beverage in the United States, behind only soft drinks. If current trends continue, says Michael C. Bellas, chairman and CEO of the Beverage Marketing Corp., bottled water will eclipse even soda by 2020.

“I’ve never seen a beverage phenomenon like bottled water,” he says.

Bellas has followed the bottled water business since Hollywood big shots sporting polyester leisure suits and gold chains quaffed Perrier during power lunches at Le Dome. He was there in 1984 when Evian started selling 1.5-liter bottles in convenience and grocery stores. He watched with interest as a handful of European conglomerates began building U.S. bottling plants.

Then came PET, the type of plastic used to make the water bottles that seem to be everywhere these days. Beginning around 1992, PET spurred 10 percent annual growth rates in bottled water sales that continue to this day.

Once marketers discovered the material’s versatility, they began offering PET bottles in soft drink machines, topping them with resealable “sports” tops and packaging them in six-packs and cases. Beverage giants Coca-Cola and Pepsi soon jumped into the game with their own brands, Dasani and Aquafina.

“Water became pervasively available in all markets,” Bellas says in wonderment.

Now it’s a $7.7 billion a year business. In the next decade, Bellas predicts, the big players will try to distinguish themselves from one another through aggressive branding and marketing campaigns. Coca Cola and Pepsi can be expected to focus on the purity and health benefits of their products, which are technically not spring water but purified water. Meanwhile Nestle will tout the unique taste and wholesomeness of natural spring water.

Places like Poland Spring play an integral role in the water business. With down-home brand names, labels depicting idyllic landscapes and slogans touting purity and harmony with nature, multinational corporations try to evoke images of nature unspoiled.

Though they dispute dozens of other facts, plaintiffs and defendants couldn’t agree more when it comes to the importance of how people receive that message.

“We feel that we have a tremendous strength in consumers being able to identify with the brands,” says Jane Lazgin, director of corporate communications for Nestle Waters North America.

That’s why Nestle goes to the trouble of buying and developing springs from coast to coast and marketing them under different labels. Poland Spring sells mostly in New England and the urban Northeast; Florida gets Zephyrhills. California has Arrowhead; the Midwest, Ice Mountain. Texans and their neighbors know Nestle water as Ozarka. Altogether, Nestle has 75 U.S. bottled water brands.

“The beauty of most of Nestle’s key labels is they can be found on a map,” the trade journal Beverage World remarked in a September article. “Even if consumers have never been to those protected sources, there’s a real identity that means something.”

The company has spent millions to restore the original bottling plant built at Poland Spring in 1904 by Hiram Ricker, whose family had already been bottling Poland Spring water for 50 years.

Nestle capitalizes on the Poland Spring location with the slogan “What it Means to be from Maine.” But what DOES it mean?

Nestle’s promotional materials tout the exceptional quality of Maine’s underground water sources. They explain how the glaciers that once covered the state left a blanket of porous sand and gravel as they melted. Those fine-grained deposits act like a sponge and a filter, holding and purifying enormous quantities of water.

“Most places in Maine where you put in a well you’ll end up with good water quality,” says Maine State Geologist Robert Marvinney.

Poland Spring is one of those places. So are Clear Spring and Evergreen Spring, both about 30 miles away, and Garden Spring, eight miles from Poland Spring. Nestle names all three springs as sources of Poland Spring water.

Whatever source it comes from, Poland Spring water is generally clean and low in the dissolved solids that give mineral waters such as Evian and Calistoga their distinctive tastes. As Nestle expands production of the brand, the company says it puts a great deal of scientific effort into finding water sources that closely match the taste of the existing ones.

“The original spring will dictate the taste profile,” Lazgin says.

So when eager landowners from Massachusetts or New York call Nestle hydrogeologist Tom Brennan about the beautiful springs on their property, he says he has no interest in them as potential new sources of Poland Spring water. Water from those states just wouldn’t taste enough like Poland Spring, Brennan says.

He says the best place to look for Poland Spring water is in eskers, ridges of gravel and sand that were the beds of streams flowing out from underneath melting glaciers. Often, roads are built atop them, giving drivers the impression of traveling along an elevated causeway in an ocean of forest.

Water that has spent a few months or years seeping through an esker is usually very clean, having been filtered by fine sand.

The next step is to find a spring. If you want to put a label on the bottle that says “spring water,” federal regulations specifically require – among other things – that “there shall be a natural force causing the water to flow to the surface through a natural orifice.”

In the days before chlorination and sewage treatment, springs indicated a clean, safe source of drinking water.

Now we have ways to test water for contamination and purify less-than-pristine sources. But springs still indicate high-quality groundwater, Brennan says.

That doesn’t mean they’re pretty. The natural springs associated by Nestle with some of its Maine wells are not the idyllic pools that come to mind when the company talks about “pristine sources.”

Some of them are downright unsightly, stagnant puddles surrounded by boggy ground in areas rife with mosquitoes and deer flies. And as the lawsuit states, some of them are adjacent to parking lots.

Now, the notion that a single drop of Poland Spring comes from these filthy puddles would give the marketing people fits. But no Poland Spring water actually comes from them. No Poland Spring water actually comes from Poland Spring itself, for that matter, or any other spring. Nestle pumps Poland Spring water out of the ground through wells scattered all over southern Maine.

It’s OK to put the Poland Spring label on that water, company officials say. Federal regulations allow a bottler to pump water from wells and label it “spring water” as long as a few conditions are met. The wells must tap the same formation that feeds a spring that is named on the bottle, and the wells must produce water indistinguishable from what comes out of the ground naturally.

Poland Spring meets those requirements, Nestle’s Kristen Tardif says. What’s more, she adds, collecting water through wells rather than piping it from natural springs is better because it reaches down into the earth to capture upwelling water. If you collect water from a surface spring there is a chance it will be contaminated after it flows out of the ground.

Nestle is simply collecting spring water before it gets to the spring, Tardif explains.

Nonsense, counters Bill Miller, president of the National Spring Water Association. Miller formed the organization, whose members are mostly small bottlers, during the 1990s. At the time, the U.S. Food and Drug Administration was developing the regulations that govern the spring water industry today.

“There was a strong push by the industry to allow well water to be called spring water, if the well was adjacent to the spring,” Miller says. “That definition just doesn’t hold water.”

The chances that water pumped out of a well would otherwise have flowed through the ground to emerge from a particular spring nearby are slim, says Miller, who operates a spring in North Carolina. So how can you slap a label that says Poland Spring on a bottle of water that was actually pumped out of the ground more than a mile away?

Miller and other small bottlers are asking that question frequently these days, because it is the crux of their livelihood. A few years ago, a landowner could turn a spring into a nice little business with an investment of a few hundred thousand dollars.

Not any more. A handful of other large corporations are pressuring the little guys with highly efficient bottling plants, massive distribution networks and enormous sales volume.

“The whole competitive landscape has changed tremendously,” says Nestle’s Lazgin.

As it turns out, those economic shifts may have at least as much to do with the class-action suit as the quality of Poland Spring water.

It seems several attorneys representing small New England bottlers recently approached Nestle wanting to discuss trends in the business. The attorneys were trying to find a mutually acceptable way for their clients to coexist with Nestle. Depending on whom you talk to, these attorneys may also have been representing consumers harmed by Nestle’s alleged misrepresentation of Poland Spring’s origins.

The negotiations were going well, says Jan Schlichtmann, one of the attorneys. Schlichtmann achieved brief celebrity a few years back as the subject of the book “A Civil Action” and the film based on it. John Travolta played him in the movie.

Armed with some unpleasant facts suggesting that Poland Spring water might not meet the federal spring water definition, and might be contaminated to boot, Schlichtmann says the attorneys were making progress.

Nestle was willing to concede that it has experienced growing pains as its business has expanded. During the mid-1990s, for example, Poland Spring was afflicted with a spate of customer complaints about funny-smelling water. Tests showed that the water had unusually high levels of bacteria harmless to humans.

The odor problem was caused by a poorly maintained carbon filtration unit in the plant, they say, not contamination of the source. The carbon unit was replaced, and the customer complaints stopped.

The company has also had problems with state regulators in Massachusetts and Rhode Island. But those issues were mostly technical and have been ironed out, Lazgin explains.

“We all understood that nobody had a monopoly on the truth,” Schlichtmann says. “We were working towards some ideas that could resolve these disputes.”

But that resolution never came, Schlichtmann complains, because Sobol and a few of his compatriots decided they could make more money by abandoning the negotiations and filing the class-action lawsuit.

“What their actions show is that greed is a universal human affliction,” says Schlichtmann.

Sobol says Schlichtmann was the one who betrayed his clients. The way Sobol tells it, Schlichtmann was about to reach an agreement with Nestle that benefited only the bottlers, squeezing consumers out of the equation.

“Jan [Schlichtmann] tried to make some money and tried to sell out the consumer class, and we wouldn’t let him,” Sobol says.

Nestle offers yet another variation on the story. At the end of 2002, Lazgin says, the company was approached by attorneys representing “some unnamed competitors.”

“There were two, maybe three, opportunities for us to refute their claims,” she says, and then in July things fell apart.

Lazgin and other Nestle officials claim to be completely mystified by the whole episode, especially the charge that their product does not constitute “natural spring water.” After all, the company sold 220 million gallons of Poland Spring last year worth $621 million.