Nestle said plans to lightweight one of it PET bottles by almost a quarter will realise huge cost and environmental savings as it reconfirmed its belief in the long-term profitability of bottled water.

Kim Jeffrey, Nestle Waters North America CEO, revealed the move to introduce the lighter Eco-Shape bottle in 2009 or 2010 after company research found bottles account for more than half of its carbon footprint.

"We are the industry leader in lightweighting packaging as evidenced by the launch of our Eco bottle in 2007," he told analyst Andrew Wood. "By 2009 we will have saved almost 200m lbs (90m kg) of resin, the equivalent of taking 78,000 cars off the road."

He added that significant technical breakthroughs made over the last two years meant its lightweighting initiative would have a "substantial environmental impact". After mapping its carbon footprint, NWNA found 55 per cent of its entire carbon footprint came from bottles.

"Lightweighting our bottle is the single biggest impact we can have from an environmental standpoint on our carbon footprint," said Jeffrey.

"We are going to launch the next generation of Eco shape this year that is going to be a-24-per-cent reduction compared to the bottle today. It is going to save a lot of resin and reduce our greenhouse gas emissions on an absolute basis by 10 per cent."

The new bottle will be reduced from 12.5g to 9.5g, meaning a 24 pack half-litre case of will contain only 8oz of plastic, he said. The lighter container will slash Nestle's volume purchase of PET resin by 95m lbs a year, delivering an annual saving of $62m based on market rates in July.

"That is real supply chain savings for a company of our size," he said. "We believe we can continue to improve our supply chain economics."

He said the company planned to add to the 26 plants it currently had in the US as part of a bid to bring its facilities closer to their markets and reduce its supply chain.

The company could continue to reduce costs and "generate acceptable levels of profitability" over the next decade, he said as consumers turned increasingly to filtration and bottled water.

The Nestle chief's comments came as the bottle water sector has been under severe pressure in the last two years, following years of sustained growth. He acknowledged that the growth of private labels was something the company was eager to address.

Andrew Wood said: "Given its standing as the world's largest bottled water business, it is not surprising that Nestle has been impacted by the trends in the market - especially as Nestle is heavily exposed to the developed world in bottled water.

"After achieving bottled water organic growth of 7 per cent per annum over the five-year period from 2003-2007, Nestle has slipped into negative growth territory over the last six quarters, averaging -2 per cent per quarter over this time, with significantly weaker growth in the developed markets."

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