Tap water's popularity forces Pepsi to cut jobs (IHT)

By Andrew Martin
Wednesday, October 15, 2008
Tap water is making a comeback. That's bad news for PepsiCo's profits.
The company, which makes Pepsi, Doritos and Quaker Oats cereal, announced on Tuesday that its quarterly earnings were down 10 percent in part because of declines in sales of soda and bottled water in the United States.
In response, the company is planning to eliminate 3,300 jobs and close as many as six plants to cut costs and to refocus its efforts on stabilizing its domestic beverage business.
"Revitalizing this business is a huge priority for us," said PepsiCo's chief executive, Indra Nooyi.
Pepsi reported net income of $1.58 billion for the third quarter, compared with $1.74 billion a year earlier. Excluding losses related to commodity hedges, the company's earnings were $1.06 per share. Analysts surveyed by Thomson Reuters were expecting $1.08 per share.
The company's stock price dropped $7.37 to close at $54.40 on Tuesday. The stock has fallen 28 percent since the beginning of the year, most of that in the last two weeks. PepsiCo's stock on Oct. 1 was $71.64.
Sales of carbonated soft drinks have been declining in the United States for several years, as consumers turn to a growing number of new beverages like enhanced waters, sports drinks and energy drinks. But the problems have accelerated in a volatile economy, with consumers eating at restaurants less and buying fewer grab-and-go beverages.
In addition, consumers are increasingly choosing tap water over other beverages at restaurants and at home to help save money and the environment, according to PepsiCo and industry analysts. Research by William Pecoriello, an analyst at Morgan Stanley, found that 34 percent of consumers say they are reusing plastic bottles more often and 23 percent say they are cutting back on bottled beverages in favor of tap water or beverages in containers that create less waste.
Information Resources, a research firm, found that sales of water filters increased 16 percent in the first half of the year.
PepsiCo said volume for beverages in North America declined by 4 percent in the third quarter, which ended in Sept. 6.
In recent years, noncarbonated beverages were an engine of growth as soda sales slipped, but no longer. Volume for noncarbonated beverage sales dropped 5 percent in the quarter, led by double-digit declines in Aquafina and Propel, a flavored and vitamin-enhanced water drink.
Carbonated soft drink volume in North America declined by 3 percent in the quarter.
In response, PepsiCo is creating new packaging and logos for many beverages, and plans to introduce new products in the coming year.
"Because of the economy, there is some movement, probably temporarily, back to tap water," said John Sicher, publisher of Beverage Digest, an industry publication. He predicted that both PepsiCo and Coca-Cola would ratchet up their efforts to improve beverage sales in 2009.
"Unless both Pepsi and Coke do something quickly, they could lose a generation of carbonated soft drink consumers," Sicher said.
To increase sales in the United States, Nooyi said, would take a "breakthrough" product. Both Pepsi and Coke are hoping for a breakthrough when they introduce beverages that use a natural, low-calorie sweetener derived from the stevia plant.
Despite the lackluster beverage sales in North America, Nooyi said international growth remained robust, particularly in the Middle East, India and China. Revenue for PepsiCo's food businesses in the North America grew by 12 percent in the quarter, and profit increased by 9 percent.

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California farmers know 'witch' way leads to water (IHT)

Phil Stine walked a grid pattern with Frank Assazi in search of water with the aid of a Y-shaped willow stick on Mr. Assazi's land in Merced, Calif. (Peter DaSilva for The New York Times)

California farmers know 'witch' way leads to water

By Jesse McKinley
Thursday, October 9, 2008
WATERFORD, California: Phil Stine is not crazy, or possessed, or even that special, he says. He has no idea how he does what he does. From most accounts, he does it very well.
"Phil finds the water," said Frank Assali, an almond farmer and convert. "No doubt about it."
Stine is a "water witch," one of a small band of believers for whom the ancient art of dowsing is alive and well.
Emphasis, of course, on well. Using nothing more than a Y-shaped willow stick, Stine has as his primary function determining where farmers should drill to slake their crops' thirst, adding an element of the mystical to a business in which the day-to-day can often be painfully plain.
Asked how he does it, Stine has a standard retort. "I just tell people," Stine said, "it's the amount of lead" in your haunches.
Scientists pooh-pooh dowsers like Stine, saying their abilities are roughly on par with a roll of the dice. But water witches have been much in demand of late in rural California, the nation's biggest agricultural engine, struggling through its second year of drought.
The dry period has resulted in farm layoffs, restrictions on residential and agricultural water use, and hard times for all manner of ancillary businesses, like tractor dealerships and roadside diners.
"There is a domino effect to the point that a little clothing store goes out of business in a town, because the people living there move on," said Doug Mosebar, the president of the California Farm Bureau.
The state estimates nearly $260 million in crop damages through August. The drought has been particularly hard on areas like the Central Valley - the state's farming basin, some 400 miles, or 640 kilometers, long - and in Southern California, where some avocado farmers have taken to stumping their trees, cutting them back to the base rather than watering them.
Statewide, farmers have left nearly 80,000 acres, or 32,374 hectares, fallow rather than struggle - and pay - to keep them irrigated.
The dry times have meant good business for people like Blake Hennings, a well driller in the Central Valley city of Turlock, who says he has a lengthy waiting list and a yard full of worn-down drill bits. At a recent job he dug five test holes, all of which had been identified by a water witch like Stine.
"We only had one bad one," said Hennings, whose brother Curtis also dabbles with the dowser. "How they do it is beyond me."
How many rural witches are still around is an open question. Water witches have no trade unions - or covens. Few advertise, or dowse full time.
Stine, for example, offers his services without charge, though he says he does accept thanks of another sort. "I got a bunch of gift certificates," he said.
Dowsers have been part of lore for millenniums, and many on the farm today have no doubt that they have special abilities. Richard Cotta, the chief executive of California Dairies, a Central Valley cooperative, said he vividly remembered the first time he saw a witch.
"I was 6 years old," Cotta recalled. "A neighbor's well had gone dry, and this old fellow came out and he witched it, quite a ways away from the other well. Doggone it, I'll be darned if they didn't get water. That made a believer out of me." So much of a believer that Cotta recently walked away from a land deal because Stine said there was no water.
"He said he couldn't find enough water to do what we wanted," Cotta said.
Thomas Harter, a hydrologist at the University of California, Davis, who runs workshops with farmers looking to drill wells, says there is no scientific evidence that dowsers have special talent at finding water. They are, however, usually much cheaper than the various scientific tools, like electromagnetic imaging or seismic studies, that can help find aquifers.
"It's worth a bottle of whiskey to have a guy come out," Harter said.
But Harter also says men like Stine, who worked in the irrigation business for nearly half a century, could have an intuitive sense of where water is, simply by dint of knowing the territory.
In the Central Valley, which was once the bottom of a giant inland lake that water soaked into for eons, finding groundwater for domestic use is pretty easy, Harter says. But Stine's efforts are reserved for agricultural wells, which need to produce much more water and sometimes can run 1,000 feet, or 305 meters, deep.
Stine is 77 and retired from a successful irrigation business here in Waterford, a town of about 7,000 on the banks of a slender section of the Tuolumne River, the same river from which he now cuts his willow branches.
What does he look for in a good dowsing rod? "It's got to have leaves on it, and it can't really be bigger than your finger," Stine said. "And you got to find one with a fork in it."
He says he was taught his dark arts many years back by a fellow irrigator who used a metal coat hanger and a hard hat to dowse.
"He used a metal rod and wore a metal hat, and that thing would hit his head," Stine said. "So he always wore that hat."
The American Society of Dowsers, an organization based in Vermont, claims more than 3,000 members who use various tools - pendulums, L-shaped rods, bobbers - on all manner of mystery, finding minerals and lost objects, and even attaining "ancient wisdom," according to the group's Web site.
"Dowsing is a system that uses tools," said George Weller, the society's national president. "And the tools give you an answer."
Stine, a plainspoken Baptist, claims no connection with a higher power or otherworldly sensations when dowsing, merely a strong tugging in the hands.
"You can feel it twist," he said. "You can't hang on to it. It will actually break in your hand."
On an afternoon not long ago, Stine was summoned to a parched patch of earth outside Merced, California, owned by Assali and Cotta.
Stine's process is simple: walk the eastern edge of the property with the willow held straight up. When it bends toward him, he marks the spot with a flag and keeps walking. If he gets two or three in quick succession, he is convinced there is a stream underfoot.
On Assali's and Cotta's land, Stine worked fast, practically speed-walking. And then, after about 150 feet, the willow bowed suddenly - inexplicably - toward Stine's chest.
"There it goes," he said, his hands straining against the stick.
And so it went, again and again as Stine moved along the property's perimeter, planting perhaps 20 flags. Assali said he would start drilling on Stine's recommendation as soon as he could.

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Water Crisis: Another inconvenient truth (IHT)

OPINION

By Peter Brabeck-Letmathe
Sunday, October 5, 2008

At last, many of the world's political leaders have begun to realize that diverting land and food crops to produce biofuels leads to higher food prices. But an equally important consequence of this policy folly is being largely ignored in the public and political debate: Producing biofuels will further deplete the world's already overtaxed water supply.
This is emblematic of a larger and increasingly dangerous disregard for the world's most valuable, irreplaceable and finite natural resource: fresh water.
Seventy percent of all water withdrawal is already used in agriculture, and while all such activity requires water, growing enough soy or corn to create biofuels is especially water-intensive. For example, to produce just one gallon of diesel fuel up to 9,000 gallons of water are required. Up to 4,000 gallons are needed to produce enough corn for the same amount of ethanol. By way of contrast, producing enough food to meet the caloric needs of one person for one day in, for example, Tunisia or Egypt requires about 666 gallons of water, and twice as much in California (caloric needs and intakes vary widely from region to region due to dietary customs).
If all of the biofuel targets and timelines set by governments across the world are met, we can expect water withdrawals for agriculture to increase by up to one-third. Making a dent in the world's energy problems with biofuels will require much more water than the world can afford to give up. There simply isn't enough; water tables are falling throughout the world. While there are substitutes for oil, there are none for water.
The world is facing a water crisis and, consequently, a food crisis that in terms of severity and potential impact far supersedes the current food crisis or the exhaustion of fossil fuels. Either it never occurred to biofuel advocates to ask about the amount of water needed for biofuel production, or they simply chose to ignore this particular inconvenient truth.
According to a report by the International Water Management Institute, by 2025, about one third of the world's population, perhaps as many as 3 billion people, will face water shortages. From an agricultural standpoint, we may be looking at losses equivalent to the entire grain crops of India and the United States by then. According to some estimates, even without biofuels, we will very likely reach the upper limit of available fresh water for worldwide consumption, more than 2.9 billion cubic miles, by 2050. A growing reliance on biofuels would exacerbate an already difficult challenge.
There was a remarkable lack of careful planning in the drive to convert food to fuel. In Europe and the United States, a developer trying to open a shopping center is subjected to an extensive environmental impact assessment. But when politicians decided to promote biofuels, the decisions were not preceded with a comparably thorough analysis of environmental sustainability.
Regardless of how it happened, policy makers neglected the dwindling supply of a resource essential to life in order to replace fossil fuels and fight global warming. This was not a sensible trade-off. There is no question that we have to reduce our consumption of fossil fuels. But biofuels derived from food crops planted exclusively for that use are clearly the wrong solution. While there are substitutes for oil, there aren't any for water.
This scandal is instructive because it was caused, in part, by the general attitude toward water in both the developed and developing world. Water is still treated as a limitless resource in too many communities, and one reason is that it is has no price. States heavily subsidize water usage so that it is sometimes even free for both farmers and consumers. Because it is not assigned a value in the marketplace, there is no incentive for using it efficiently. If water were not free or heavily subsidized, would biofuels still be produced? I doubt it!
The water problem can be solved. It requires much more careful stewardship of water supplies by local and national governments. I, for one, also believe reasonable pricing policies would help by encouraging the use and development of water efficient crops and smart irrigation systems. But even those who disagree with that prescription should be deeply disturbed by the lack of attention paid to water by those who rushed headlong to biofuels as the answer to the world's energy problems. As the international community grapples with how to fight global warming and build a sustainable future, it must stop ignoring a priority that is even more pressing.
Failure to address the water problem will result in food scarcity. Water scarcity is no longer an environmental issue. It is a national and international security issue that can not be ignored.

Peter Brabeck-Letmathe is the chairman and former chief executive of Nestlé.

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Mideast facing choice between crops and water

CAIRO: Global food shortages have placed the Middle East and North Africa in a quandary, as they are forced to choose between growing more crops to feed an expanding population or preserving their already scant supply of water.
For decades nations in this region have drained aquifers, sucked the salt from seawater and diverted the mighty Nile to make the deserts bloom. But those projects were so costly and used so much water that it remained far more practical to import food than to produce it. Today, some countries import 90 percent or more of their staples.
Now, the worldwide food crisis is making many countries in this politically volatile region rethink that math.
The population of the region has more than quadrupled since 1950, to 364 million, and is expected to reach nearly 600 million by 2050. By that time, the amount of fresh water available for each person, already scarce, will be cut in half, and declining resources could inflame political tensions further.
"The countries of the region are caught between the hammer of rising food prices and the anvil of steadily declining water availability per capita," Alan Richards, a professor of economics and environmental studies at the University of California, Santa Cruz, said via e-mail. "There is no simple solution."
http://www.iht.com/articles/2008/07/21/business/21arabfood.php




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Mariann Fischer Boel Speech: Climate change and water challenges for farmers

Member of the European Commission responsible of Agriculture and Rural Development
Climate change and water challenges for farmers
Expo Zaragoza 2008 on Water and Sustainable Development Zaragoza, Spain, 11 July 2008 http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/08/388&format=HTML&aged=0&language=EN&guiLanguage=en



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Worst seen over for U.S. Midwest floods

EAST ST. LOUIS, Illinois: The worst Midwest flooding in 15 years eased on Saturday after the swollen Mississippi River crested in St. Louis, but the toll was still rising as billions of dollars in damage to crops, communities and infrastructure were assessed.
Emergency workers at river levees and floodwalls feared more rain could swell river levels again and complicate recovery efforts. But the skies remained mostly clear and thousands of relief workers could finally exhale.
"It really is looking positive. The weather has cooperated and that's made a difference," said Maggie Carson, a spokeswoman for Illinois Emergency Management in Alton, Illinois, a few miles north of St. Louis.
Thunderstorms seen for the northern Midwest in the next few days were expected to be scattered and pose no new threat.
The flooding and storms blamed for 24 deaths since late May have caused billions of dollars in damage to the heart of the U.S. grain belt, pushing corn and other food commodity prices to record highs and feeding fears of higher world food prices.
http://www.iht.com/articles/reuters/2008/06/21/america/OUKWD-UK-USA-FLOODING.php








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World Bank says fishing will return to the Aral Sea

ALMATY, Kazakhstan: The people of the Aral Sea region, site of one the world's worst ecological disasters, may soon see their economy revitalized and large-scale fishing and farming return, World Bank President Robert Zoellick said Thursday.After decades of shrinking, the northern section of the Aral Sea in Kazakhstan has started to fill up and fish stocks have soared as a result of a dam-building project, giving hope of revival in the region.
"As poor people around the world struggle to keep food on their tables in the face of rising prices, it is gratifying to see that Kazakhstan has found a way to give back fishermen and their families their way of life on the Northern Aral Sea," Zoellick said.

Growing populations and income levels coupled with poor coordination of water management among Central Asian states have strained water supplies. Almost all countries in the region have been severely affected this year by water shortages, which have ruined vast areas of crops and forced up prices of staple foods.Zoellick said the renewed health of the Aral Sea suggested Kazakhstan may be saved from the threat of shortages in the next few years.
"The return of the Northern Aral Sea shows that man-made disasters can be at least partly reversed, and that food production depends on the sound management of scarce water resources and the environment," he said.
http://www.iht.com/articles/ap/2008/06/19/asia/AS-GEN-Kazakhstan-Aral-Sea.php








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