As Nestle confirms that it will sell Poland Spring to two private equity firms, the future of the company’s operations in Lincoln remains unclear three months after it stopped purchasing water from the town’s water district.
Poland Spring signed a five-year contract with the Lincoln Water District in 2018 to buy water from the Bella Luna spring in Lincoln. At one point, it was purchasing 1 million to 2 million gallons of water a month from the district that was then packaged at Poland Spring’s bottling plants in southern and western Maine and sold across the U.S.
However, the company stopped purchasing Lincoln’s water as bottled water sales dropped sharply during the COVID-19 pandemic, Lincoln Water District Superintendent Jeff Day said.
Now, it is unclear how the sale to the private equity groups will affect the future of Poland Spring’s operations in Lincoln.
“Everything’s new to me right now,” Day said. “I knew [the sale was coming], but I didn’t know when.”
Poland Spring’s Swiss parent company, Nestle, said last June that it was considering the sale of its North American water business, which includes Poland Spring and a number of other brands and beverage delivery services. On Wednesday, Nestle announced plans to sell the business to private investment firms One Rock Capital Partners and Metropoulos and Co. for $4.3 billion. One Rock has offices in New York City and Los Angeles, while Metropoulos and Co. is based in Greenwich, Connecticut.
It is too early to know how operations will change this early in the transition to new ownership, but Poland Spring continues to be committed to Lincoln even if it isn’t currently purchasing water from the town’s water district, a Nestle Water North America spokesperson said Friday.
Altering the source of water was common for Poland Spring as it manages its water resources in 10 springs across Maine, he said.
“From time to time, it is more efficient for Poland Spring to pause sourcing water from a specific spring site in favor of other locations,” the spokesperson said.
While Poland Spring is no longer purchasing the Lincoln Water District’s water, it continues to pay the district $12,000 a month as part of a lease agreement, lessening the financial blow the district has taken since sales stopped, Day said.
When it is operating, all the water from one of the water district’s four wells is sold to Poland Spring. When Poland Spring is not purchasing it, that water goes to residents in Lincoln and nearby Howland.
Demand for bottled water has dropped as offices across the U.S. have gone entirely or partially virtual during the pandemic, lessening the need for water coolers. And away-from-home beverage sales — such as those at concerts, in schools and at sporting events — have declined tremendously, though Poland Spring seems to have been affected more than other major brands such as Aquafina and Dasani.
In addition, more Americans have been hesitant to drink bottled water in recent years because of its environmental impact. The production process requires fossil fuels — contributing to climate change — and the vast majority of single-use water bottles purchased in the U.S. are not recycled.
Before Poland Spring stopped buying water from the Lincoln Water District during the second week of November, it had substantially slowed down its purchasing starting last May, before halting purchases altogether during the summer and resuming them in the fall, Day said.
While Lincoln Town Manager Rick Bronson is hopeful that Poland Spring will resume business in Lincoln, drinking water sales during the ongoing pandemic seemed to make it unlikely in the near future.
“Until the market redevelops, I highly doubt we will see that,” Bronson said.
Lincoln had also once been the potential site of a new bottling plant for Poland Spring to join its locations in Hollis, Kingfield and Poland. However, Poland Spring had delayed any plans for a new plant during the pandemic, Day said.
Day said he was unsure when water district sales to Poland Spring would resume but said, based on his interactions with a Poland Spring employee last week, they could return in May.
He was optimistic that Poland Spring’s sale would bode well for the Lincoln Water District and that the town’s water would once again be shipped across the country.
“I’m hopeful this is going to be a good change,” Day said.