In the early 2000s, while on a consulting assignment in South Africa, Peter Thum, a young and perceptive mind, experienced a moment that would redefine his career path. Gazing out of a car window, he witnessed a woman walking along a dusty road, a heavy bucket of water balanced on her head. This seemingly ordinary sight sparked a profound realization within him – this woman, like countless others, dedicated her life to the arduous task of water collection, a fundamental necessity often taken for granted. This vivid image became etched in Thum’s memory, a constant reminder of global disparities.
Months later, while engaged in a project for a beverage company in the UK, the concept for Ethos Water crystallized in Thum’s mind during a train journey. He envisioned a premium bottled water brand where the purchase was not solely about the product’s origin or taste, but about contributing to a greater cause. “I realized you could make a luxury water product, a brand, where the reason for buying it wasn’t because it came from somewhere far away, but rather because you were doing something to help somebody else get water,” Peter Thum explained. On a simple napkin, amidst the gentle rocking of the train, the initial blueprint for Ethos Water was conceived.
Thum’s deep understanding of the beverage industry, particularly the dynamics of the bottled water market, allowed him to approach the “luxury water” concept with an innovative twist. His strategy was simple yet powerful: price Ethos Water competitively with established premium brands like Evian and Fiji, but redirect the funds typically allocated to extensive shipping towards initiatives providing clean water access in developing nations. This novel business model ignited an all-consuming passion within Thum. Driven by this purpose, he dedicated himself to refining the Ethos Water concept and crafting a robust business plan, determined to transform his vision into a tangible reality.
Securing initial funding proved to be a considerable hurdle for Thum. The investment landscape at the time lacked the robust ecosystem for mission-driven ventures that exists today. Investors typically fell into two camps: traditional philanthropists focused on charitable donations without expecting financial returns, and conventional investors prioritizing businesses with high-growth potential and purely financial objectives. The concept of a for-profit company deeply intertwined with a social mission, like Ethos Water, was largely unfamiliar and met with skepticism. Thum encountered numerous rejections, facing investors who either dismissed the business viability or overlooked the profound social impact in favor of maximizing profits. Despite these setbacks, Peter Thum’s conviction in Ethos Water’s potential to effect real change remained unshaken.
One rain-soaked evening, while in his car with his co-founder, a pivotal moment of clarity struck Thum. Frustration with the repeated funding rejections gave way to a decisive realization: the power to launch Ethos Water rested in his own hands. With a modest $10,000, Peter Thum resolved to bootstrap the company himself. He understood that resourcefulness and frugality would be paramount, and he was prepared to maximize every dollar.
Thum’s immediate priority was securing the distinctive Ethos Water bottles. A stroke of luck intervened when he discovered a blow molding company burdened with a warehouse full of surplus Smartwater bottles. The manufacturer, having never received payment for these bottles, presented an unexpected opportunity. Thum negotiated a deal to acquire 10,000 of these bottles at a significantly reduced cost. Next, he procured labels – 10,000 clear, self-adhesive labels that would give Ethos Water its unique brand identity. Thum then rented a truck, personally loaded the bottles, and transported them to a labeling facility. With the labels applied, he returned the rental truck, ready for the next stage of his ambitious plan.
To fill the bottles, Peter Thum sought out a small, independent bottling facility. Intrigued by the Ethos Water concept, the facility owner agreed to take on the task. Lacking a suitable vehicle himself, Thum borrowed his friend’s mother’s Volvo station wagon to transport the filled bottles. Imagine Peter Thum, the former McKinsey consultant, navigating delivery bays at Whole Foods stores alongside massive semi-trucks, his station wagon loaded with the inaugural batch of Ethos Water. He single-handedly unloaded cases, carrying them onto loading docks with unwavering determination and a genuine smile. “I was throwing cases out of the back of a station wagon,” Thum recalls with a laugh, reflecting on these unconventional early distribution days. This hands-on approach not only minimized initial costs but also allowed Thum to forge personal connections with store personnel, building rapport and a shared sense of purpose.
With Ethos Water gaining traction in Whole Foods, Thum’s ultimate aspiration was to secure distribution across Starbucks stores nationwide. He recognized that a partnership with Starbucks would not only significantly expand Ethos Water’s reach but also amplify its positive impact on communities in need. Knowing that Howard Schultz, Starbucks’ visionary CEO, held the key to this pivotal partnership, Thum relentlessly pursued a meeting.
When the opportunity to meet Howard Schultz finally materialized, Thum and his co-founder arrived at Starbucks’ Seattle headquarters. They had meticulously prepared a comprehensive PowerPoint presentation, detailing Ethos Water’s business model, social mission, and growth potential. However, as they began setting up their presentation, Schultz entered the boardroom, taking them by surprise. “What’s all this?” he inquired, gesturing towards the presentation materials. “We’re ready to tell you about Ethos,” Thum responded. Schultz, however, had a different approach in mind. “No, let’s just go have a cup of coffee and talk in my office,” he suggested, picking up a bottle of Ethos Water and leading them to his private office.
In Schultz’s office, overlooking the vibrant Seattle cityscape, Thum and his partner found themselves engaged in a deeply personal conversation with the Starbucks leader. Schultz’s interest extended beyond the intricacies of the business plan; he wanted to understand the individuals behind Ethos Water and the passion driving their mission. Thum shared his transformative experience in South Africa, the moment of inspiration on the train, and the challenges encountered in bringing Ethos Water to life. Schultz listened attentively, asking insightful questions and exploring the core values and aspirations that fueled Thum’s journey. As the conversation unfolded, it became evident that Ethos Water’s mission resonated profoundly with Schultz’s own vision for Starbucks as a company committed to making a positive global impact.
Recognizing the synergy between Ethos Water’s mission and Starbucks’ values, Schultz swiftly mobilized his leadership team. He began inviting senior executives from various departments, eager to share his enthusiasm and garner their support. As each executive joined the meeting, Thum and his co-founder recounted their story, addressed questions, and explored the potential of a partnership. Schultz’s passion for Ethos Water was contagious, and his leadership team quickly embraced the vision. By the end of the day, Thum and his partner had presented their story to over a dozen key decision-makers, each time with Schultz present, solidifying the foundation for a transformative partnership and a promising future for Ethos Water within the Starbucks ecosystem.
Starbucks wasn’t interested in a mere partnership; they envisioned full ownership. As Starbucks moved decisively to acquire Ethos Water, Thum faced a critical balancing act. The acquisition offered an unparalleled opportunity to scale Ethos Water’s impact, bringing clean water to millions globally. However, Thum was determined to safeguard Ethos Water’s core mission and values throughout the acquisition process. He entered negotiations with a clear objective: ensuring the donation model and the commitment to social responsibility remained central to the agreement.
Thum advocated tirelessly to secure the most favorable terms for Ethos Water’s mission. He initially pushed for a 10-cent donation per bottle sold. Ultimately, Starbucks committed to 5 cents per bottle, a figure Thum recognized as significant given Starbucks’ extensive distribution network. Despite this compromise, Peter Thum remained confident that the acquisition would enable Ethos Water to achieve a far greater impact than it could have independently. “The mission was delivered because the company could make profits,” Thum explains. “We were giving away the equivalent of 1.9 cents a bottle, and Starbucks, despite the fact that I wanted them to make it 10 cents, made it five. And it has been to this day.”
For Thum, the true validation of his efforts came not with the financial gains from the acquisition, but during a nationwide promotional tour for Ethos Water. Thum and his team embarked on a cross-country journey in a bright blue Winnebago, emblazoned with the Ethos Water logo, visiting Starbucks stores across America. They engaged with Starbucks employees, sharing the Ethos Water story and organizing “Walk for Water” events to raise awareness about the global water crisis. The tour culminated in a grand finale in New York City, where Thum and his team announced Starbucks’ landmark $5 million commitment to water access projects in developing countries.
Walking through Times Square, Thum witnessed a powerful symbol of his achievements: people carrying Ethos Water bottles. This tangible representation of his impact filled him with profound satisfaction. “We were walking across Times Square from our hotel, and there were people carrying Ethos Water bottles in Times Square,” Thum recalls. “For me, it was the realization, like the idea of democratizing philanthropy and putting it in the hands of the consumer had ultimately been realized in a country with 300 million people.”
Peter Thum’s remarkable journey, from a moment of inspiration to building a successful, mission-driven enterprise, exemplifies the transformative power of vision, perseverance, and unwavering dedication to a cause. His ability to identify an opportunity, bootstrap a startup, and navigate complex partnerships and acquisitions showcases the essential qualities of a successful social entrepreneur.
Peter Thum’s impact extends beyond Ethos Water. He has continued to channel his entrepreneurial talents and mission-driven approach into subsequent ventures. Fonderie 47 repurposes illegal assault rifles from African conflict zones into luxury jewelry, while Liberty United adopts a similar model to combat gun violence in the United States. His latest venture, Muse.io, aims to democratize technology, empowering creators and entrepreneurs worldwide.
The story of Peter Thum and Ethos Water stands as a compelling testament to the potential of business as a force for good. It demonstrates that through vision, determination, and a steadfast commitment to making a difference, entrepreneurs can achieve not only financial success but also create lasting, positive change in the world. To delve deeper into Peter Thum’s inspiring journey and gain further insights into his entrepreneurial philosophy, explore the full episode of Forward Obsessed. Discover how you, too, can leverage the power of business to create meaningful impact and build a legacy that transcends the bottom line.
