Three years ago, I got fascinated by the phenomenon of Fiji Water. I couldn’t believe that it made economic sense to ship heavy bottles of water from a Pacific island to slake my thirst in Massachusetts. Learning more about Fiji water led me to learn more about container shipping, and to spend a great deal of time thinking about the comparative mobility of bits, atoms and people, a major thread in my work the past few years. While I still find the idea of shipping water from Fiji to the US to be environmentally reprehensible, I am grateful for the provocative idea of Fiji water.
Evidently there are other writers out there who’ve found the bottled water phenomenon provocative. Writing in Fast Company, Charles Fishman has a long feature on the economics and ethics of bottled water. While Fiji is a particular target, he’s curious about the ethical issues in general of purchasing a product that has environmental impact and is, he asserts, essentially indistinguishable from tap water. The average American drinks 18 half-liter bottles of bottled water a month, more than we drink of coffee, milk or beer. The resulting business is a booming $16 billion industry.
It’s an industry based on certain absurdities. Pepsi and Coke – producers of Aquafina and Dasani respectively – don’t even use spring water. Instead, they use tap water, put it through an energy-intensive osmosis filtering process, which may be unneccesary, as Fishman asserts that most water drinkers can’t distinguish between tap water and luxury bottled water if they’re presented in the same vessels at the same temperature.
Fishman doesn’t get quite as deep into the numbers as I’d like, though he offers some useful economic insights, pointing out that, “…half the price of a typical $1.29 bottle goes to the retailer. As much as a third goes to the distributor and transport. Another 12 to 15 cents is the cost of the water itself, the bottle and the cap. That leaves roughly a dime of profit.” That suggests that my cost estimates for shipping water from Fiji – 10 to 20 cents per liter – were quite low.
Then again, Pablo Päster, writing on Triple Pundit, has a calculation in great detail that suggests that producing and importing a bottle from Fiji is about $0.22, but that it entails an environmental impact of about 250 grams of greenhouse gases produced per bottle… He also points out that it requires approximately 5 liters of water to produce each one liter PET bottle… It’s possible that shipping water from Fiji is just endlessly fascinating to people who study the globalization of atoms.
Speaking of beverages, Ory points to a great Business Daily Africa article about the tremendous success of Safaricom. The mobile phone firm turned a profit of 17 billion Shillings last year, which is about $255 million. Who’s getting hurt by the rise of the mobile phone? Coke.
For instance, beverage manufacturers like Coca-Cola are finding that teenagers are more likely to use their pocket market buying pre-paid calling cards than buy a soft drink.
The same phenomenon is being replicated in categories like alcoholic beverages and even the newspapers where readers are getting news updates on the phone, faster than any traditional media could deliver.
This parallels a phenomenon I saw in Ghana when BusyInternet and other major cybercafes came online – a fall in beer sales. When people have limited disposeable income, people make tradeoffs in their spending. More mobile minutes or cybercafe time, fewer bottled drinks. Maybe Apple’s iPhone will help slow the sale of bottled water in the US. Somehow I doubt it.
You might also be interested in this lengthy post on the same issue, but with a different opinion, over on Reason’s blog – from yesterday: http://www.reason.org/outofcontrol/archives/2007/07/bottled_water_c.html
On that post I pointed out the efforts of two bottle water companies that use their profits to fund water and sanitation projects in Africa:
Tom Standage has taken your point of view numerous times. Notable in a NYTimes op-ed a few years back that stuck in my mind. Its behind a subscription wall now. http://www.tomstandage.com/
And speaking of Coke, the recently announced plans to enter with USAID into a water partership program in Africa: http://www.thecoca-colacompany.com/presscenter/nr_20070322_water_partnership_in_africa.html
And to replace all the water they use in their manufactring process:
Just in case.
If you’re still fascinated by containerization, you must read Marc Levinson’s The Box. It was published last year on the 50th anniversary of the first containerized shipment, from Port Elizabeth, NJ, to Galveston, Texas. A great story, compelling economic history, and a glimpse into the technological transformation that not only makes Fiji Water possible, but also Dell, Wal-Mart and, arguably, China’s rise to dominate global manufacturing.
Dasani’s UK accident (Coca-Cola said the bromate was formed during the gas purification process it used in Dasani manufacturing and bottling. To ensure that Dasani meets calcium levels required in all UK bottled water products, it adds calcium chloride, a derivative of bromide. But due to the amount of bromide in the water, the ozonation process caused bromate to form at unacceptable levels, Coca Cola said) was truly hilarious, because the local waterworks had to take out ads to assure the population that their water was just perfect.
Kind of reminds me of the old days when they used to sail half way around the world in a leaky wooden ship for salt and pepper
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