by Ola
Jamal Qureshi a Norwegian entrepreneur and owner of Svalbardi, is selling 0,75 liters of water from Svalbard for 619 kr. The water is extracted from floating blocks of ice surrounding Svalbard, before its bottled and shipped all around the world. So far the reactions from the marked has been mixed. The enthusiastic entrepreneur on the other hand, is very optimistic.
The strategy of Svalbardi is to target two market segments. One of them is the luxury marked. The other segment is people how are looking for an unusual gift or just an extravagant bottle for a special occasion.
Today, the water can be bought online or at special stores in Svalbard. Svalbardi offers worldwide delivery and in February they started selling water in London as the only physical location outside Svalbard. The entrepreneur said he got the idea when he was visiting Svalbard a few years ago. He says:
“A lot of people look at it as just a bottle of water, however it is much more than that. People are willing to pay the same amount of money for any other souvenir from Svalbard. Why not pay for a bottle of water where you can keep the bottle as a unique and useful memory “.
Question of sustainability
Svalbardi has met a lot of criticism lately by environmental activist who claim that the business model is both morally condemnable and concerning regarding sustainability. Their worries can be summarized by three points:
First, they claim that bottled water is a major contributor to pollution. The non-profit organisation The Water Project states that only one in 5 water bottles are recycled. Second, activist claim that it is morally wrong to sell such goods, due to the vulnerable and untouched origin of the product. Furthermore, one could argue that it is not right to sell such an expensive product when millions of people are living without access to clean water. Third, Greenpeace claims that Svalbardis production impacts the environment in a negative way. They say that Svalbardi is creating positive new business opportunities in Svalbard, drawing business away from the coal industry which is the traditional industry in Svalbard. However, water production in a remote place like Svalbard far away from other markets, will create pollution from extensive transportation.
Svalbardi has responded to these criticisms by starting a campaign to enlighten the world about the effects of climate change. In addition, they have also become certified by Carbon Neutral as a zero-emission business.
In addition, the owner claim that Svalbardi is working very hard to run a sustainable business. He argues that their production is transparent and he also highlights their external involvement in projects such as wind energy in China and providing clean water to people in Uganda. Furthermore, Svalbardi is spreading information and educating people on the consequences of global warming. “Our production is small scale and our impact is marginal.” Jamal Qureshi.
Would you be willing to purchase a bottle of water for over 600 kroner, even if it was a gift? Do you think this business model is sustainable or do you it is morally wrong considering emissions from transportation and production in a vulnerable environment such as Svalbard. Are the actions that Svalbardi is taking justifying their externalities or is it just a façade?
BUS446 
From my point of view, it is difficult to talk about sustainability when it comes to products of such types. Such products is very “trend sensitive” and even if founder will solve all the problems with environmental activists nobody will garantee that fashion on this product will still exist.
For me it is like “Air from Everest” or “Hair from George Clooney’s head” – there will always be a people ready to buy this, but building sustainable business based on this … I’m not sure.
LikeLike
As the comment above states, the product of it’s own is very “trend sensitive”. The founder take it a step further from the well known premium brands in the same category, Voss, Fiji-water. But the insane price premium they are demanding, will cause it to be a luxury product and not a consumer good. Relying on the fashion of the product, I think it would be challenging to build a sustainable business.
LikeLike
I agree with the comments above that this is a “trend sensitive” product, and it looks like the production has many negativ externalities. The bottles, boats on fossil fuels used for gathering of the ice, emissins in relation to transport the water etc. I think that it would be hard to build a sustainable business on this fashion product.
LikeLike
I would not buy that product for various reasons. The main one is that by doing so, we encourage a non-sustainable way of bottling water. There are plenty of other more sustainable way of doing so, especially in Norway which is full of natural resources and fresh water. I know this company prime the uniqueness of its product, but having to use transportation from such a remote area makes no moral sense to me.
Moreover, with its water, Svalbardi joined the trend of the luxury products. I personally do not encourage luxury brand as it is often an industry not traditionally associated with concerns about environmental impacts, human rights, and wellness. But on a more positive note, those luxurious industries seem to slowly be moving towards an environmentally friendly and corporate social responsibility path.
LikeLike
As said earlier in the comments, I wouldn’t be willing to purchase such bottles of water. You can buy so many things more memorable from Svalbard at 600 kroner. What is the limit of business? Next we will buy a breath of air for 500 kroner?
The concept of buying a bottle of water from a specific area can be a good idea. However, with such cost of tranportation and production, it is painful for the environment and for the traveler’s wallet.
LikeLike
How does this business model cast light at all? The most sustainable water is the water “produced” locally.
LikeLike
Personally, I would never buy a bottle of water for 600 kr and would honestly be quite disappointed if someone decided to spend 600 on a gift to me and it turned out to be water. Of course, I am not in the target segment for this product and I would not be surprised if it actually became successful. After all, the market for luxury water has proven to be profitable in the past.
LikeLike
I wouldn’t be willing to purchase such bottles of water. I agree with Max when he said earlier that the most sustainable water is the water “produced” locally.
“In addition, they have also become certified by Carbon Neutral as a zero-emission business.”
I would really like to know how a company like Svalbardi can be carbon neutral certified. It is known that it takes huge amounts of fossil fuels to make plastic or glass water bottles, and to transport them around the world.
LikeLike
Even though I’m not in the target segment, I think the idea itself is pretty cool, how is this any different than buying a ridiculously expensive bottle of wine of newer vintage? And I wouldn’t be surprised if this idea actually ends up being highly profitable.
The negative externalities are something to not take lightly though. Even though the owner claims their impact is marginal, their mere presence at Svalbard might lead to other parties to look for similar opportunities there, and thereby increasing the negative impacts of these kinds of activities.
And by the way, “Our production is small scale and our impact is marginal.” is never a good argument. If everyone was to think like this, we would never be able to improve our efforts in regards to becoming environmentally sustainable.
LikeLike
Even though i personally wouldn’t like or buy a gift like this, the idea is brilliant. You sell something that is relatively cheap to produce, as a luxury product. This is like Voss Water, which is a luxury drink in the States, but is tap water in Aust-Agder. And though i would never be a customer for products like this, they will be profitable as long as there is a market for these kind of products. So even though the effects may be negative for Svalbard over time, i do admire the idea. But I am, as several others, having a hard time picturing this as a sustainable business model. This seems more like a short term profit gain from a trend product.
LikeLike
Personalet I would not buy a bottle of water for 600 kr, but I don’t think that I’m in the target segment for this company. As a luxury good I do think that this has potential, given the somewhat trend to drink water tapped in exotic places (see for example the water restaurants in New York). But for most people I think there’s a mental barrier in buying expensive water, since most people that could afford it have access to clean water in their homes.
LikeLike
For me, it’s all about what the bottle represents. Sure, 600 KR for a bottle of water is ridiculous. Also, drinking water from icebergs on Svalbard is clearly not sustainable. However, as it is stated in the post, the company is carbon neutral. Also, I do not think anyone will make a serious habit of only drinking water from Svalbard. It seems to me, that the product aims at being more of a once in a blue moon extravaganza. If this extravaganza does indeed channel significant funds into environmental awareness campaigns and clean water projects for those lacking access, could it not be a good thing? Making the light bigger than the shadow? As the end product is so expensive, there should be room for this to happen, even if the company itself aims for a rather hansom profit.
LikeLike
I think it is ridiculous to spend 600 KR on a bottle of water. I also strongly agree with the criticism regarding the fact that millions of people are living without access to clean water. Instead of using time and money on developing a luxurious product for rich people who already have access to clean water, the people behind the company should spend their time and money on helping out people who do not even have access to clean water.
LikeLike
I find this trend with luxury arctic water and ice crazy. Another example of this extravagance, is the “Svaice” project; cutting up blocks from Svartisen glacier, transporting it with helicopter and selling it at luxury bars across the world.
https://www.nrk.no/nordland/wwf_-_-dette-fjerner-ikke-galskapen-i-prosjektet-1.13012199
However, I find Svalbardi almost like a PR-stunt. The focus on environmental impact, donations to water programs etc. from every sold bottle and focus on dealing with externalities. “Let people squander – and let us take care of the world”, may be a fitting slogan.
LikeLike
Though most start-ups fail, this is again an example that the market willingly supplies anything there is a demand for. It is hard to argue against the fact that certain needs, such as the needs of people without access to clean water, should be served first. However, under the current rules of the economic system it is even harder to find a valid argument for why it should be the people serving Svaldbard water that are best suited to serve those needs.
LikeLike
I must admit that a bottle of water with a pricetag of 600 kr far extends my willingness to pay
LikeLike
Paying 600 kr for a bottle of water? That is not something I would even consider. If someone were to spend 600 kr on a gift for me I hope they dont use it on something like this..
LikeLike
The only reason I buy waterbottles is whenever I need a new drinking bottle – and 619kr for a drinking bottle sounds ridiculous. And a waterbottle also seems like a weird souvenir. I would rather appreciate a snowflake, like the one given to Penny from Leonard in bigbangtheory. Which hopefully would also be much more sustainable than what these waterbottles seems to be.
LikeLike
I would not spend 600 kroner on a bottle of water since I think the price they’re charging sounds ridicules. I understand that this may be appealing to tourist who have paid Svalbard a visit and want a Svalbardi bottle as a souvenir, but I also think that it’s morally irresponsible of the producers to export this product as regular drinking water.
LikeLike
Even though I’m a compulsive water drinker, I would still never buy such an expensive bottle of water. For me it’s not a matter of sustainability – luxury products usually don’t contribute to the world’s sustainability problems that much, because they are produced at much lower scale.
Maybe, if the brand ever gets more known and becomes a symbol of wealth an luxury, I would consider buying it as a gift for someone. Until then it will remain just an overpriced bottle of water.
LikeLike
619 kr for a bottle of water!? What a waste of money…
LikeLike
I think this could be a good business, and others like it are doing good. For instance they are selling ice from glaciers in Norway for insane amounts of money. Besides that I don´t think this is a good sustainable business model. As Sindre pointed out “Our production is small scale and our impact is marginal” is never a good argument. Also i think that the pollution created by transportation of the product is unnecessary, everyone can get water more locally than from Svalbard.
LikeLike
But then again, for many it’s not about water for the purpose of drinking, but as a souvenir. If you were to buy another souvenir from Svalbard that cost 600 NOK that wasn’t water or anything else that’s normally portrayed as a commodity, would you guys react in similar fashion? For someone living on the other side of the planet, “water from Svalbard” might seem like a gift way out of the ordinary and therefore all the more enjoyable.
In some ways it’s not that different to Leonard’s “snowflake from the north pole” that he gave to Penny, for you that watch The Big Bang Theory. Would that also be a ridiculous gift if it cost 600 NOK?
LikeLike
Interesting article. I did not know anything about this bottle of water brand Svalbardi in advance. I would not spend 600 kroner on melted ice. I think this product should be for the local community only. In my point of view, the business model is not sustainable. The other stuff that they mention about that their production is transparent and highlights their external involvement in projects such as wind energy in China and providing clean water to people in Uganda. This is of course positive things to do, but it is not part of their business model, I believe.
LikeLike
If someone gave me a 600 kr. water bottle, I think I would rethink my friendship with them. I also think Svalbardi’s sustainable argument, that they spread information and educate people on the consequences of global warming is wrong, when they benefit from the negative consequences of global warming.
LikeLike
Interesting article! I find it hard to believe that this business model is sustainable in the long-term. As previously comments have mentioned, this business model is very “trend-sensitive”. Therefore, profits are likely to be volatile and unpredictable.
LikeLike
Very interesting blog post!! I believe that this business model is not sustainable. In my point of view this product is not necessary as it is only a type of fashion product. Even though the company is doing a lot of measures to maintain a sustainable production, it would in my opinion be better not to produce the product since it does contribute to pollution. On the other hand that would lead to less business activities at Svalbard which would have a negative impact on the locals, but I feel it would be better to invest in more necessary and sustainable products instead of producing high fashion water.
LikeLike
Personally I would not pay 600 NOK for just the water. However, I could spend the money on a souvenir from Svalbard and thus I don´t see why this product should be criticised this much. Svalbard I believe is somewhat mysterious for most people and the tales of blue oceans and clear ice are contributing to this. To be able to take something like melted polar ice back home is more special than the traditionally souvenirs.
I don´t think the price itself is the issue here but rather the purpose of the bottle. If the purpose is to drink it, well that´s an expensive habit and you could probably give clean water to those in need. If the bottle represents a souvenir – I´m buying it.
LikeLike
Personally, I would not buy a bottle of water for 600 kr. I believe that my reference price for a bottle of water would be approximately 50 kr. On the other hand, I agree with some of the previous comments – that if the bottle represents a souvenir, I might be willing to buy it.
Furthermore, pricing the water from Svalbard in this manner could also bring out the message that we should think about water as a more valuable resource then we do in our daily life. But in the long run, I do not think that this business model will last.
LikeLike
I agree with many of the comments above that I would not purchase this product. For me the reason is not the product itself, but more the whole idea of having a luxury segment of water. If you look at other products in the same segment the same critical questions can be asked about sustainability.
On the other hand, it could be a market with a lot of potential. The idea is great and it is a good opportunity to be profitable. If they also front Svalbard in a good way I think it can help the tourism and other industries at Svalbard.
LikeLike
Interesting article! In my opinion, this is a bad business, okay why not to create buzz during one month as the creator of Airbnb did With the selling of cereal package with the Color of the two presidential candidate. Just to make money. I support the view that this business is bad, first for our environment, secondly, it’s not a challenging opportunity for the future. I will not invest in this business. Who want to buy water to 600 kr ? try in the in the Western Saharan desert. But decrease the price 🙂
LikeLike
The idea isn’t appealing to me now, like many have stated, I’m not their target demographic. At this stage in my life, I also wouldn’t appreciate this as a gift. But, if I had money to waste, maybe I would purchase and appreciate a bottle of water for 600 KR, either as a gift or souvenir. It’s not a sustainable idea, but luxury and sustainability are often incompatible ideas.
Anne asked, “What is the limit of business?” I would say there is none! There seems to be a market for anything and everything these days. Even souls apparently… http://freakonomics.com/podcast/soul-possession-a-new-freakonomics-radio-podcast/
LikeLike
Interesting article. I have never heard of the product in advance. Personally, I would not pay 600 NOK for melted iced. Wind energy in China and clean water is not part of their business model in my opinion. I don’t think their business is sustainable, maybe the product only should be available for the residents at Svalbard?
LikeLike