13 August 2009

Bottled Water Competition

It's not usually tap water. From this story, a nice quote from someone who understands the issue:
People make the assumption bottled water competes with tap,” Lauria said. “It competes with other packaged products, like coffee and soda. … Bottled water is the healthiest packaged beverage.”
Bottom Line: While I don't usually (ever?) buy the stuff, it's a nice option to have.

5 comments:

Nate said...

As someone who's been pretty critical of the bottled water phenomenon, but who admittedly doesn't know much about the underlying economics behind the issue, this is a good point.

Still, I've got to believe that Lauria's comments about bottled water's superior cleanliness betrays the industry's desire to actually compete against tap. Remember those Wes Anderson-directed Dasani ads a few years back? The message, all camp aside, was that bottled water is not only clean, but even better than your tap water, which has fish spawning in it by the way.

I guess the thing is that if Tahoe wants people to use tap, they need to realize that bottled water is successful because it's just an easier option for boaters and such, who don't necessarily have 20 reusable bottles lying around (and how many people really think to pack those before a vacation, anyway?). If the water utility wants to do something about it, perhaps launch a campaign to widely distribute and publicize reusable bottles to vacationers and residents alike. Ethical arguments don't hold much sway in the absence of a crisis, so best to focus on how to encourage greater tap use by looking at what's made bottled water successful.

Damian said...

You correctly hit on the root of the problem: people like convenience and are willing to pay for it. Until the incentives change, no amount of giving away cups will matter. (I also prefer the water utility not spend resources advocating against a particular thing that their customers do).

Indeed it is costly to carry a cup/remember to carry a cup/clean the cup, and I suspect many will continue to use disposable options while this is the case.

As with boaters, the incentives are the same as you point out--they don't have to prepare for their trip as much, a costly activity.

I think you are right that the industry wants to portray superior cleanliness, but I doubt they actually can compete with tap in the home--my folks buy reusable jugs to fill up at Whole Foods (a waste I think but they don't like the chloramine), but I suspect these types (buying bottled water for home consumption) are a small subset of bottled water users.

WaterSource/WaterBank said...

??? ... I have used the same water bottle on the golf course for the last six months.... My old pick-up truck has two still being used from last year. Guess I'm not contributing to the problem. ( By the way, as usual, I do have a serious solution for all containers including water bottles, but I have enough problems promoting a water Source in the middle of a drought ...

WaterSource/WaterBank

Nate said...

Hi Damian,

Thanks for the reply - I don't know any economists, so I appreciate your perspective.

Since I don't use terms like "incentive" and "cost" in quite the way an economist might, I'd like to be clear on exactly what you're referring to as costs vis-a-vis using reusable cups (by the way, I'm not really a big proponent of this idea, but now that I brought it up...). Let's consider this for an individual person, not a group, where the equation's different. Does cost mean time? Because I don't see that being much of a cost, what are we talking about, 20 seconds to rinse the cup in the morning?

Space? Sure, that's a bigger cost, but still, many if not most people carry a large purse or backpack where the additional space of a 16oz. bottle isn't going to take up much room. Weight is another dimension of cost if you're filling up before leaving the home, but then again, if you trust that the tap water where you're going is fine (which I suspect it actually is in the overwhelming majority of cases in the US), then keeping a full canteen isn't so necessary.

Or do you mean costly in the sense of the mental preparation involved with coordinating the different steps to remember/carry/wash reusable bottles? But again, we're talking about 30 seconds to right a sticky note and place it on your alarm clock before you go to bed so you remember to take your cup to work. It seems to me that more than anything, the biggest obstacle/cost to using cups is the perception of inconvenience rather than any actual physical inconvenience. Is that considered a real cost?

As to the extent to which bottled water can compete against tap, I need to disagree with you on this one. While I would suspect that the market of homeowners using bottled water as the primary source of drinking/cooking water is growing, it's more about decisions happening outside the home that I'm thinking about. When someone goes to the food court at the local mall, are they asking the guy at the counter for a cup of tap water from the fountain machine, or for a bottle of water? I can only speculate that a sizable chunk of that group will go for bottled water, despite the fact that the cost of using tap is much less and no less convenient (unless the buyer wants to save some of it for later). Or what about office buildings that have water coolers? Why do so many of them use shipped bottled water rather than just fill it with their tap water, which again in most cases is the much cheaper option in nearly all respects. Would people in the food court and the office have made the same decisions 20 years ago? Why not? It is in these areas where I believe the effort to portray bottled water as being cleaner may begin to pay off.

David Zetland said...

@Nate -- Damian can give a longer answer, but I wanted to say that food court employees are NOT trained to help with tap water. (They could have self-service water taps and cups, but they often do not...) That's b/c the profit on bottles is HUGE.