Starbucks moves Ethos water bottling out of drought-hit California

Reuters News
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Posted: May 08, 2015 1:27 PM

By Lisa Baertlein

LOS ANGELES (Reuters) - Starbucks Corp on Friday said it would stop sourcing water for its Ethos Water brand in California, which is in the fourth year of a serious drought that has prompted the governor to order the state's first-ever mandatory cuts in water use by 25 percent.

Beginning in May and over the next six months, Starbucks said it plans to move production to its Pennsylvania supplier.

The Seattle-based coffee chain also is looking for a new source and supplier for its West Coast Ethos Water distribution.

The announcement comes a week after Mother Jones published a story showing that Starbucks' Ethos Water was sourced in areas deemed to be in "exceptional drought."

Starbucks bought privately held Ethos Brands LLC for $8 million in April 2005. It does not break out sales.

The company donates 5 cents for every bottle of water sold to the Ethos Water Fund, which is part of the Starbucks foundation. Starbucks says that so far, more than $12.3 million has been granted to help support water, sanitation and hygiene education programs in water-stressed countries in Africa, Indonesia and Latin America.

Starbucks also says its California cafes have cut their water use by 26 percent since 2008.

Several other large bottled water sellers also have sourced water from California. They include the Coca-Cola Co's Dasani brand and PepsiCo Inc's Aquafina. Representatives from those brands were not immediately available to comment.

Starbucks shares gained 0.9 percent to close at $49.78 on Friday.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Dan Grebler)