Food Companies Reassess the True Cost of Water

Water is essential to food production, but its purchase price rarely reflects its total operational value. Treating, moving, heating, cooling, and discharging water can add hidden costs, while scarcity can threaten production and community relationships.

John Ikeda, chief mission officer at the Water Environment Federation, and Paul Bowen, senior water consultant at GHD, examined those risks during the IFT FIRST Hot Topics Studio session “Water: Is It the New Gold?”

“Gold is optional. You don’t need it to live, right? … Water is the invisible ingredient,” Ikeda said.

How Food Companies Can Measure Water Risk

The first step is understanding where that ingredient is used. Ikeda pointed to the Water Scopes 1-3 framework being developed by the World Resources Institute and partner organizations. Modeled on greenhouse gas accounting, it distinguishes water-related impacts and dependencies in direct operations, purchased inputs, and value chain activities.

For food manufacturers, that means looking beyond water used inside the plant for ingredients, processing, and sanitation. Companies also need to consider water associated with energy and other purchased inputs, as well as the water used to grow agricultural ingredients. The resulting footprint may be far larger than the volume contained in the finished product.

Bowen said companies can begin inside their facilities, where they have the most control. During his time at The Coca-Cola Company, he said, the company reduced its water-use ratio from more than 4 gallons of water per gallon of product to about 1.8 gallons.

Where Water Reuse Can Begin

Water reuse treats a stream to the quality required for another purpose instead of discharging it after one use. Bowen offered the example of water used to rinse empty cans. If a facility captures that relatively clean stream before it reaches the floor, it can filter and return the water to the treatment system, reducing water purchases, treatment needs, and wastewater discharge.

Direct food applications require more scrutiny. Bowen said he is involved in a project with the U.S. Environmental Protection Agency and the U.S. Food and Drug Administration examining what would be required to treat process water, including water used to clean fillers or batch tanks, so it could be safely reused as an ingredient.

How to Calculate the True Cost of Water

Water rates do not capture the full cost of pretreatment, chemicals, energy, and wastewater management. 

Bowen pointed to the Beverage Industry Environmental Roundtable’s True Cost of Water Toolkit, which helps facilities include those additional expenses. The organization estimates that incoming water and sewer bills may represent only 25% to 50% of a manufacturing facility’s true water costs. A fuller accounting can strengthen the business case for efficiency and reuse projects that appear uneconomical when measured only against the purchase price.

Why Utilities Need a Seat at the Table

Plant-level savings can affect the wider water system. Municipal utilities may depend on industrial water revenue, Bowen noted. When large users reduce consumption, some utilities may adjust rates to recover lost revenue. Coordination can help manufacturers and utilities plan for those changes and identify opportunities to share treated water, recovered heat, or other resources.

Food and beverage companies should evaluate water as a continuity, cost, quality, investor, and community risk, Bowen said, rather than treating it only as an environmental metric. Those considerations become more urgent as agriculture, manufacturing, communities, and new development compete for constrained supplies.

“It may not be gold, but it certainly is precious in many cases,” Bowen said. “And I think as scarcity becomes more reality, the price is going to go up.”

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