advertisement
advertisement
advertisement

Bottled water: Answering a Math Question

A reader of “Message in a Bottle,” my story about bottled water from the new issue of Fast Company, asked a question about the sales and pricing numbers in the story. He didn’t think they added up — if we buy 50 billion bottles of water a year in the U.S., and spend $15 billion on that water, well, that comes to 30 cents a bottle for water. But you never see a bottle of water for 30 cents.

A reader of “Message in a Bottle,” my story about bottled water from the new issue of Fast Company, asked a question about the sales and pricing numbers in the story. He didn’t think they added up — if we buy 50 billion bottles of water a year in the U.S., and spend $15 billion on that water, well, that comes to 30 cents a bottle for water. But you never see a bottle of water for 30 cents.

advertisement

I emailed him an answer, but for other readers curious about the math that sometimes goes into a story, I’m posting my explanation below. I’m happy to try to answer other questions people have about the story, either emailed to me or posted at the end of the story.

And for those who missed it, NPR’s “All Things Considered” had an interview about the story on Thursday’s show. Robert Siegel asked good questions.

Here’s the explanation of the bottled water sales and cost numbers:

The most popular size of bottled water in the U.S. is the 500 ml bottle, delivered in 24-packs, or 36 packs. Typically, the 24-packs sell for $4.99 or $3.99 at major supermarkets — 15 cents to 21 cents a bottle; they are even cheaper at the big warehouse club stores.

So billions of bottles of water are sold at 15 cents to 21 cents a bottle. It’s hard to get precise numbers — but perhaps half the bottle-volume goes out in that price range. No, you never see a bottle on the convenience store shelf for 16 cents; but most of the water isn’t sold that way.

Second, the $15 billion number for consumer sales is an estimate. The official number from Beverage Marketing Inc is for *wholesale* sales — and it’s $10.3 billion in 2006. That in fact is the number you see everywhere, but it’s not reality — it’s what the water bottlers collect for their water in wholesale sales revenue. The consumer sale price is at least 50 percent higher — hence the $15 billion — but that’s an imputed number not a measured one. It’s conservative. More likely, the retail price is closer to double wholesale, but no one tracks it in the aggregate.

advertisement
advertisement

About the author

Charles Fishman, a long-time Fast Company staffer and contributor, is the author of "The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy," the definitive look at Walmart, as well as "The Big Thirst, The Secret Life and Turbulent Future of Water."

More