Ferrarelle’s green transformation: at the forefront of sustainable mineral water production

Leonardo Corbo, Ludovica Leone October 9, 2023 5 min read

It was 2013 when Michele Pontecorvo Ricciardi, Vice Chairman of Ferrarelle, a well-known Italian mineral water company that was founded in 1893, read in the New York Times about Mayor Bloomberg’s ambitious recycling initiative. The article was an inspiration to him, not only because he was beginning to feel public pressure over the environmental impact of plastic, but also because he had long since begun to envision a sustainable future for Ferrarelle. The path that led to an impressive initiative along these lines is the subject of a case study prepared for the University of Bologna and Bologna Business School.

In 2015, Ferrarelle began laying the groundwork for a new industrial plant in Presenzano, Italy, for the production of R-PET (recycled polyethylene terephthalate), investing €34.1 million, of which €25.5 million was provided by Invitalia, the Italian agency for investment and economic development. This investment represented a significant change in Ferrarelle’s production process: instead of buying preformed bottles to be molded into the final product, the company began creating its own from recycled materials. In 2019, the plant became fully operational, and in 2020, the company’s first R-PET bottle hit the shelves, marking a milestone in the company’s sustainability journey. As the new General Manager, Marco Pesaresi, a former Coca-Cola and Unilever executive, explains, sustainability at Ferrarelle has become something that goes far beyond corporate social responsibility: it is an integral part of the company’s strategy, a value to be preserved and publicized. That is why the company’s sustainability efforts have not been limited to reducing the environmental impact of its business. Ferrarelle has redefined its role by beginning to communicate how mineral water companies are not simply distributors of a consumer product, but rather custodians of a common heritage and guarantors of the sustainability of water sources for future generations. 

Adopting R-PET, an infinitely recyclable material, is a significant step toward circular economy principles in the food and beverage industry. According to Michele Pontecorvo Ricciardi, Ferrarelle has done almost everything to become more sustainable. However, the end-of-life aspect of the products continued to require the utmost attention, hence the investment in the R-PET plant, which made Ferrarelle the only Italian mineral water bottler to internally transform used PET into R-PET. Despite challenges and legislative hurdles, the company has steadily increased the percentage of R-PET in its bottles and aims to reach 100 percent by 2025, in the context of a decidedly growing market.

The global R-PET market, in fact, has been estimated to be $9.13 billion in 2021 and is expected to grow at a compound annual rate (CAGR) of 6.7 percent from 2021 to 2028. This growth will be driven mainly by consumers’ shift to more sustainable practices, as well as by the will of lawmakers, who are committed to pursuing the “triple R policy”: reduce, recycle, and reuse. Italy allows food companies to use 100 percent recycled materials from 2019. In the same year, the European Parliament issued a directive to ban the adoption of “single-use plastics such as plates, cutlery, straws and cotton swabs, all products that are not designed to be economically reused or recycled.” Yet only 6 percent of food packaging in Italy is fully recyclable. Part of Ferrarelle’s commitment is shared with other companies in the industry, which are organized in a consortium (CORIPET) that supports life cycle management of PET packaging and provides compactors that issue vouchers or rebates in exchange for waste to promote a more sustainable consumption and recycling model.

The joint effort of private companies, together with awareness on the part of consumers, is indeed one of the key elements for any initiative to reduce the corporate impact of consumer products. While Ferrarelle’s push for sustainability has opened up new business opportunities, setting it apart from its competitors, it is also true that few are focusing on these issues in communications, preferring to focus on purchase drivers that are as traditional as they are effective, such as product features or price. Part of this inertia at the industry level is due to the difficulty of achieving financial gains despite the potential positive reputational returns.

The decision to focus on more sustainable materials confirms the Vice Chairman’s -and the entire company’s- vision of focusing on sustainability as a complex and integrated project, which starts with a business model capable of bringing together marketing and sales strategies with social responsibility. This commitment has led Ferrarelle to become a certified B-Corporation, thus an instrument of positive social and environmental change. That is why future goals include the desire to eliminate more plastic than is produced for, “a -1 impact world,” which has also become the slogan underlying the brand’s philosophy. 

As Ferrarelle looks to the future, the challenge in the present is to change consumers’ mindsets. Although sustainability has become an increasingly popular topic, many continue to base their purchasing decisions on promotions rather than the environmental impact of the product. The real victory will come when consumers begin to consider sustainability as a crucial factor in their purchasing behavior, ensuring a truly sustainable future for the mineral water industry and beyond. 

This article is based on
From sustaining the competitive Advantage to sustaining the environmental Challenge
Leonardo Corbo, Ludovica Leone