Why is Bottled Water so Expensive?
Bottled water is one of the most popular beverages on the market and has been for quite some time. According to the Beverage Marketing Corporation (BMC), the consumption of bottled water has risen steadily in the past 14 years. In 2000, Americans drank an average of 23 gallons of bottled water, but by 2014 that number has risen to 34 gallons, or about 10.7 billion gallons in the U.S. market and about $13 billion in sales. In 2016, about 480 billion plastic bottles were purchased globally, and it’s expected that the world’s increasing thirst for bottled beverages will bump these figures up another 20 percent, or 583 billion plastic bottles, by 2021.
The reason so many people choose bottled water over tap water is because it’s perceived as a safe, convenient and, when bottles are recycled, sustainable source of water. However, there are many reasons why the preferable choice is not bottled water for some people, including the cost.
What’s up With the Price of Bottled Water?
The Atlantic Magazine recently launched Economics in Plain English, which has been introduced as a Video Explainer Series. This series focuses on hundreds of reader’s frequently asked economic inquiries, both serious and playful. Derek Thompson, a staff writer at The Atlantic Magazine, has answered these questions using every day English.
The kickoff to the video series was released on August 8, 2013. The debut answers the question, “Why is bottled water so expensive?” Throughout the short, 3-minute video, Thompson compares the expense of bottled water to the expense of tap water, as well as clarifying all components that alter the price of bottled water.
First, Thompson explores how expensive bottled water is compared to tap water: the cost of half of a liter of bottled water costs the same as a day’s worth of cooking, washing, showering, and toilet flushing. Shockingly, bottled water is between 240 and 10,000 times more expensive than tap water. Comparatively, if a family paid bottled water prices for tap water, their monthly water bill would be close to $9,000!
Next, Thompson explains all the aspects that go into the price of bottled water: the production of the bottle, the cost of supplying and filtering the water that goes into the bottle, the transportation costs of shipping and delivering the bottle, and the cost of marketing the final product. As Thompson explained, “It costs a lot of money to stand out in a crowded marketplace – especially when you are selling one of the common things on earth.”
Is Bottled Water Worth the Hefty Price Tag?
It is no secret that bottled water comes with a large price tag, but what many find surprising is the fact that bottled water is not worth nearly as much as the industry is generating. Erin Brodwin and Aylin Woodward, two writers for Business Insider discuss the price of bottled water, or what they describe as, one of the biggest scams of the century.
Brodwin and Woodward explain that many people, especially in America and other first world countries, have plenty of access to clean drinking water. They say that in many cases, publicly sourced tap water might actually be safer than bottled water because of the microplastic particles found in bottled water. And even after all this, Americans still spend over $15 billion dollars on bottled water each year.
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Watch the first video from Economics in Plain English below:
For more details on what goes into the price of bottled water and makes it so expensive, check out our webinar: Draining Your Budget: The Real Cost of Delivered Drinking Water.