For five years, Cove has been working on what it says is the first biodegradable bottled water. The waters have been choppy: Announced debuts in 2019 and 2020 were ultimately delayed because the bottle wasn’t ready, and it has since faced a continuous chorus of “Is this even possible?”
CEO and founder Alex Totterman told Retail Brew creating the bottle took “a little bit of naivety,” plus a lot of trial and error, to provide an answer, but last week it did. The startup’s 20 oz. water bottle made of polyhydroxyalkanoates (PHA), a type of biodegradable plastic the company says is natural and non-toxic, hit shelves at Los Angeles premium grocer Erewhon on December 1, at $3.69 per bottle (Cove’s MSRP is $2.99).
It’s a small step toward transitioning the beverage industry away from petrochemical materials like plastics. Beverage giants the Coca-Cola Company and PepsiCo were the top plastic polluters for the fourth year in a row in 2021, per Break Free from Plastic’s rankings from last year. While they’ve pledged to cut plastic use and introduced recycling programs, they’ve largely missed their goals.
“This is our goal, really trying to fix this problem, not just create a new brand for the sake of it, or a new water product,” Totterman, who previously worked at a startup focused on water purification, said. “I’m not trying to start a beverage brand here.”
Cove is, technically, a beverage brand, meaning it needs consumer and retailer buy-in to succeed. So with one question answered (it is possible), others around demand, price, and potential for scaling remain.
Break it down
Cove, which operates a 25,000-square-foot facility in Los Angeles, is focused on California to start, where composting partners are widely available and its purified water is sourced from Orange County’s Garden Grove, Totterman said. Erewhon is its only named partner, but it’s “in discussions” with others.
Cove says that its PHA bottles are home-compostable, breaking down in 90 days in a compost bin, according to the company, or ~five years in soil or water. If they do end up in a landfill, especially a capped one (where there’s less oxygen), they’ll still break down “somewhat,” Totterman shared.
- While its bottles can technically be recycled, there are currently no systems at scale to do so economically, per Cove.
Cove’s biggest challenge will be scaling production to potentially service a larger retailer, Totterman shared. Its facility is capable of producing over 20 million bottles annually, but by early next year, it’ll be producing a few hundred thousand. The aim is to hit the millions by next summer, at which time it could support orders from a national retailer.
- Totterman said it’s “basically not feasible” for Cove to act as a packaging supplier to other beverage brands, as doing so would only make financial sense for higher margin items.
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Those tougher margins led to the higher price tag, a notable jump from premium bottled water brands like Fiji and Evian (both sold for $1.99 for 17 oz.) and Essentia ($1.59 for 20 oz.), as well as those making sustainable packaging claims like JUST Water ($1.89 for 17 oz.) and Boxed Water is Better ($2.19 per 17 oz.). Even aluminum-packaged bottled water brand Path Water sells its refillable 25 oz. bottles for $2.79.
Testing the waters: Cove’s pricing could be an obstacle for consumers, according to Randi Kronthal-Sacco, senior scholar of marketing and corporate outreach at the NYU Stern Center for Sustainable Business.
Products marketed as sustainable are often priced at a premium, but they’re typically an average of 30% more expensive than their conventional counterparts, she noted. Cove’s pricing is “really high” in comparison, Kronthal-Sacco said, especially as inflation may impact Gen Z and millennials, who typically over-index on sustainable purchases.
“What we’re finding is that younger consumers, because they don’t have that discretionary income that older Boomers and Gen Xers have, are more sensitive to price,” she shared.
- In a recent survey conducted by The Harris Poll and The Conference Board, 60% of respondents were less inclined to buy sustainable products due to inflation, with 62% of Gen Z and 72% of millennial respondents having waning interest.
Totterman said Cove aims to bring down its price as it scales to make it “as accessible as possible.”
Still, Kronthal-Sacco predicts there will be “high interest” in bottled water that’s biodegradable, though “confusion” around the term means consumer education is needed. “With biodegradable, I think it’s going to be a good marketing claim, but I don’t think consumers will understand exactly what it means,” she said.
Education, plus making the largely unfamiliar process of composting “as easy as possible,” will be a priority for Cove. “That’s where companies have kind of lost their way a little bit,” Totterman said. “It’s on companies to do the hard work.”