Virtual Water; The Implications For Branding

Posted on 13 May, 2023 by benyamin chahkandi

Virtual water refers to the amount of water used in the production of goods and services, including food and clothing, that are traded between countries. Water is a scarce resource, and virtual water is becoming increasingly important as populations grow, and water resources become more limited. The concept of virtual water has significant implications for branding, as consumers become more aware of the environmental impact of their consumption patterns. In this essay, we will explore the concept of virtual water and its implications for branding.
The concept of virtual water was first introduced in the 1990s by Professor John Anthony Allan. He defined virtual water as the volume of water used in the production process of a commodity, which is then embodied in the product and exported to another country. For example, the production of a kilogram of beef requires an average of 15,000 liters of water, which is equivalent to the virtual water content of that beef.
Virtual water is significant because it represents the hidden water consumption associated with the production and trade of goods and services. This is particularly relevant in water-scarce regions, where virtual water trade can play an important role in ensuring water security. In countries where water resources are limited, virtual water trade can be used to import water-intensive goods and export less water-intensive products, reducing pressure on domestic water resources.
The concept of virtual water has significant implications for branding. As consumers become more aware of the environmental impact of their consumption patterns, they are increasingly interested in knowing the virtual water content of the products they buy. Companies that are able to demonstrate a low virtual water footprint may be able to differentiate themselves in the marketplace and appeal to environmentally conscious consumers.
Branding can play a role in communicating the virtual water content of products to consumers. This can be done through labeling and advertising, highlighting the environmental impact of the product and the steps taken by the company to reduce its virtual water footprint. For example, clothing companies can use labeling to inform consumers about the virtual water content of their products, encouraging them to choose more sustainable options.
In addition to labeling, companies can also use certification schemes to demonstrate their commitment to reducing their virtual water footprint. Certification schemes, such as the Water Footprint Network's Water Footprint label, provide an independent verification of a company's virtual water footprint, helping to build consumer trust and confidence.
One challenge in incorporating virtual water into branding is the complexity of the concept. Virtual water is not always easy to measure, and there is often significant variability in the virtual water content of products, depending on factors such as location and production methods. This makes it challenging for companies to accurately measure and communicate their virtual water footprint.
To address this challenge, companies can work with experts in water management and sustainability to develop robust methodologies for measuring and reporting their virtual water footprint. This can involve conducting water audits and developing metrics to track virtual water use across the supply chain.
Another challenge in incorporating virtual water into branding is the need for collaboration across the supply chain. Virtual water is often embedded in the raw materials used in production, and companies may have limited control over the virtual water content of their products. Collaboration across the supply chain is therefore essential to reduce the virtual water footprint of products.

Branding can play a role in promoting collaboration across the supply chain by creating incentives for suppliers to reduce their virtual water footprint. For example, companies can establish virtual water reduction targets for their suppliers and offer incentives for meeting these targets.