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For evidence of bottled water's sudden need for an image makeover, look no further than Aberfoyle. Last year, 6,000 residents of Ontario's Wellington County reared up and slapped the Swiss food giant Nestlé, which wanted to renew the water-taking licence of its bottling plant in Aberfoyle and to apply for a rezoning to expand an adjacent warehouse. Yet when Nestlé's licence had last come up for renewal two years earlier, only two people objected—even though Nestlé had more than tripled the amount of water it was taking.

For years, Nestlé Waters has been selling spring water drawn from an aquifer that feeds both the Grand River and the local water table. By the time the 2007 licence renewal came due, farmers and other residents were worried about the plant's effect on the local watershed. According to a hydrologist hired by the activist group Wellington Water Watchers, the facility was using 7% of the local water, and was beginning to deplete a creek.

Beyond the ecological issue, residents wondered why Nestlé was allowed to source its primary ingredient at virtually no cost. They pointed out that if the average citizen drew an equivalent amount of water from municipal sources, it would cost him or her $2,700 per day, whereas Nestlé will ante up not much more than that—$3,000—to tap the Aberfoyle spring for five years. (Thereafter, of course, comes commercial alchemy: A bottle of freely sourced water ends up costing more than a litre of gas.)
The push-back put Nestlé—whose Canadian water sales are about $279 million (U.S.) a year—on notice. The company invested $2.5 million to reduce the amount of waste water produced by the Aberfoyle plant. Now the expansion is proceeding. Gail Cosman, president of Nestlé Waters Canada, says the plant's process is not actually wasteful. Consider, she says, that it takes almost four litres of water to produce one litre of pop—all the excess goes toward cleaning the bottling equipment—whereas a litre of bottled spring water requires only 1.6 litres of water to produce. "We've reduced our plastic and we've reduced our cardboard, but we need to do more to help the environment," Cosman says.

The battle of Aberfoyle—and others like it—reflects the mounting public skepticism about a product that rapidly rose to extraordinary popularity and that, until recently, was seen as benign and even hip. Where a few decades ago there was nothing, Canada now has a $731-million bottled water industry, which, like the global one ($50 billion U.S. worldwide), is dominated by four firms: Nestlé, Coke, Pepsi and Danone. Beyond that quartet in Canada is a handful of smaller players, like Canadian Springs, a Danone spinoff that focuses on the water cooler market.

The opposition is comprised of environmentalists and anti-corporate activists such as Council of Canadians chair Maude Barlow. The water critics accuse the big bottlers of siphoning off natural resources, as at Aberfoyle. But the rap sheet also includes the various ways that bottled water turns the natural into the unnatural, adding packaging waste (about half of all sales are in single-serving bottles); greenhouse gas emissions (for instance, from shipping millions of bottles of "natural artesian" water from Fiji to the United States); and health risks. In 2004, bottles of Coke's Dasani were pulled from British supermarket shelves in response to concerns about contamination. (Perrier experienced a similar recall in 1990, prior to its acquisition by Nestlé.)

In some quarters, the cachet enjoyed by bottled water is now running in the other direction. "There's a huge backlash on campuses and in some restaurants," claims Barlow. "The 'in' thing now is not to serve bottled water."

Cosman says the anti-water campaigns "have not affected sales, yet." But the bottled water sector as a whole, which accounts for a small fraction of all commercial and industrial water use, seems vaguely confounded by its newfound status as the Hummer of the beverage industry.

The marketing of mineral water has been around for more than a century, since it emerged in Europe as a curative. Brands like Evian and Perrier arrived in North America in the late 1970s as a niche product aimed at cosmopolitan consumers with sophisticated palates. "These brands introduced people to the concept of water as a replacement beverage," says Gary Hemphill, managing director of Beverage Marketing Corp., a New York City market research and consulting firm. As with everything from cellphones to free-range chicken, high-end eventually became commonplace—a transformation that was greatly accelerated after the late 1990s, when Nestlé popularized the single-serving bottle as an alternative to the cumbersome two-litre jug. Using an inevitable metaphor, Hemphill calls this "the watershed moment" because it made water into a portable convenience product. PepsiCo and Coke quickly launched their respective bottled water brands (Aquafina and Dasani) in an attempt to keep up with the Swiss-based food and beverage giant.

You don't have to be a connoisseur to detect the taste difference between fizzy mineral brands such as Perrier (bitter) and another Nestlé brand, San Pellegrino (salty). At the high end of the market, elegant bottles bear double-digit price tags. But even the most discerning gullet can't really distinguish between one regularly priced still brand and another, notwithstanding the bottlers' claims to the contrary. So the original value proposition behind bottled water has been eroded: It's become a mass-produced commodity whose sales are determined mainly by marketing gimmicks.

Aquafina and Dasani, in fact, are simply repackaged municipal tap water, sold for an impressive premium from conventional pop machine dispensers ($2 a bottle). In the U.S., consumers do support regional brands—for example, Maine's Poland Springs (Nestlé)—out of loyalty, but there's no equivalent in Canada, where consumers are mainly interested in cost. "Canadians want a fair price, but they also want a brand they trust," says Cosman.

Bottlers must look for other ways to distinguish themselves. Hemphill notes that packaging is "hugely important" because so many consumers buy one bottle at a time. Thus the emphasis on what he calls the "functionality" of water bottles, which now sport push-pull sports caps, flip-top caps, moulded grips, stackable bottoms—and even "child-safe caps," which has got to be a solution in search of a problem.

But the bigger trend is enhanced water. Developed by a small New York firm called Glacéau, which added vitamins to its water in the mid-1990s, the segment has ridden a wave of popularity as consumers seek something between the flavour hit of pop and the healthful austerity of water. "They're drawing consumers who wanted to reduce calories but didn't want to go all the way to bottled water," says Cosman. The sector has witnessed double-digit growth for much of this decade, with numerous variations on the theme, some aimed at children, who are under pressure from parents and teachers to wean themselves off their high-calorie pop habits. To develop that segment, bottlers use collectible bottles and promotional partnerships with cartoon series such as Bratz, says Barlow. "They make it cool." The other major growth area in the enhanced segment is flavoured water, which, together with enriched water, now accounts for 16% of U.S. sales. There is, for example, a tea-flavoured water that bears an unfortunate resemblance to a urine sample. "So many products are coming into the market that have the attributes of multiple categories," says Hemphill. "Is it water or is it a soft drink?"

That's a key question, as it turns out, for bottlers trying to find a hedge against the trend in pop sales. Growth rates for pop sales in Canada fell by 2% to 3% for each of the past three years as consumers—women and teens in particular—turned to healthier alternatives. Late last year, in a bid to staunch the bleeding in pop sales, beverage giant Cott launched "Emerge Nutrient Infused Water," marking the company's foray into this market. Emerge is aimed squarely at the Lululemon set. It comes in five new-age flavours (green tea with berry, pomegranate acai, etc.), is "infused" with a bevy of avowedly health-promoting nutrients (antioxidants, a calming ingredient called Essentra, etc.), and comes packaged in colourfully opaque bottles whose design is an unabashed knock-off of vitamin waters from Glacéau, a brand now owned by none other than Coca-Cola.

The variations are endless. Cott is also launching a water that has been enhanced with zinc, calcium and spearmint—the latter to fight your bad breath. If you're a dog.

Maude Barlow's comrade-in-arms Tony Clarke, of the Polaris Institute in Ottawa, tells the story of how Nestlé, trying to build a massive plant in Wisconsin, was hounded out of the state when anglers rose up in defence of a spawning ground threatened by the presence of a plant bent on filling 720,000 bottles a day.

Not surprisingly, many of the water firms, both large and small, are now pushing back against water activists by touting their own environmental bona fides.

Earth Water International, an Edmonton firm that claims to draw some of its water from glacial runoff, seeks to differentiate itself by diverting its net profits to funding water projects in the developing world. Last summer, the company also started selling water in Europe in octagon-shaped Tetra Paks. They can be recycled and produce less greenhouse gas through the product life cycle, says president and CEO Kori Chilibeck. The initial consumer reaction was tepid, but that's begun to change. "No one, so far, is moving to different packaging" in North America, he says. "We're setting the trend."

Coke's Dasani, for its part, is putting money toward the conversion of abandoned rail lines into bike paths, and is donating bikes for use on these new trails. Fiji Water kicks back some of its profits to building schools and water treatment facilities in, naturally, Fiji. And as part of its corporate social responsibility effort, Nestlé, the global market leader, touts its contribution to developing-world water projects as well as ongoing reductions in the amount of packaging and waste water generated in its bottling facilities.

But the activists and environmentalists aren't buying it. "To counter this backlash and the anti-bottled water movement, they're trying to buy their way into sustainability," says Barlow. She doesn't think such efforts will be effective in the face of safety concerns, such as the long-term risk of chemicals leaching out of the plastic in bottles. "What people care about is what they're putting in their mouths." The industry, after insinuating for years that municipal water is suspect, insists that both its water and the containers are safe.

Yet, quite apart from all the sniping, water bottlers know that Canadians remain a bit of a hard sell when it comes to buying something they can get for free. Europeans, for all their environmental consciousness, remain the largest per capita consumers. On this side of the pond, Mexico has become a huge market, which shouldn't come as a surprise given the country's notorious record for contaminated tap water. (Even Barlow confesses she's "no hero" and drinks bottled when she's in Mexico.) In the U.S., bottled water is now the second-largest beverage category. Up here, water remains fourth, well behind pop, milk and coffee. Indeed, in 2005, the average Canadian consumed just 63 litres of bottled water, compared with nearly 100 litres south of the border. "Over all, we consume less beverages than Americans do," says Cosman, who thinks the difference may have to do with cost-conscious Canadians still trusting their local municipal treatment facilities. "I think we're drinking more tap than anything else." Fancy that.