Norwegian Cruise is taking the environment 'seriously' by eliminating plastic water bottles, CEO says

Norwegian Cruise Line is on a mission to be more eco-friendly by removing millions of single-use plastic water bottles from its fleet by Jan. 1, President and CEO Frank Del Rio told CNBC on Monday.

The company expects to replace more than 6 million plastic water bottles each year with refillable and recyclable plant-based cartons.

"We're taking the issue of the environment seriously," Del Rio said in a "Mad Money" interview with Jim Cramer conducted on the newly built ship Norwegian Encore. "We ply the ocean's waters. We do everything we possibly can, through technology [and] through policy procedure, to prevent any kind of pollution in the water or in the air."

The sustainability initiative is powered by Norwegian's partnership with Just Goods, the sustainable packaging company founded by American recording artist and environmental activist Jaden Smith. Just Goods uses 100% spring water and its bottles are made mostly from renewable material, including trees and sugar cane, according to the company.

Norwegian teamed with Just Goods as part of the cruise line's Sail & Sustain Environmental Program, which aims to reduce its carbon footprint and contribution to landfill waste. It follows a wave of companies in a range of industries looking to shore up their sustainability strategies as interest in socially responsible investing grows.

"We're doing it as well on the Oceania region brands with Vero Water," Del Rio added.

Oceania Cruises, one of three brands under Norwegian's portfolio, spent 2019 outfitting its six ships with sparkling-water distillation systems from Vero Water in hopes of cutting use of three million plastic bottles annually.

The Norwegian brand sails 16 ships to almost 300 destinations around the world. The Norwegian Encore, which measures almost 1,100 feet long and can carry nearly 4,000 guests, will embark on its maiden voyage later this month with trips to the Caribbean on its schedule.

The company also has new ships in the pipeline. The four-ship Regent Seven Seas Cruises brand plans to add a vessel in late 2020 and another in 2023. The parent cruise line, Norwegian Cruise, expects to grow its total fleet from 26 to 37 ships by 2027.

Del Rio is bullish about the business' prospects, suggesting economists and investors see the cruise industry as a "leading economic indicator."

"Customers today are buying cruises eight, nine, 10 months into the future. We know what's going to happen and we also know that those who booked eight or nine months ago, and are on board today, they're spending money like there's no tomorrow," he said. "The customer, especially the North American consumer, is alive and well, spending money, and there's no end in sight."

Norwegian, the smallest of the three major cruise companies in the market, reported 3% sales growth in its third quarter. Wall Street expects the company to grow revenue by 5.7% to more than $6.4 billion full-year 2019.

Shares are up more than 22% year to date.

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