Bottled Water: Implications of Consumer Trends and Misguided Policy Interventions
*Names in bold indicate Presenter
Author: David Catt
A Bottled water consumption is a confounding issue often discussed by researchers, decision makers, and environmental activists concerned with water issues and their not-so-distant cousins – those concerned about the environment and sustainability. Although essentially the same quality as tap water, this entirely different product exists outside of utility monopolies within a business model used by food and beverage companies in a competitive market. Firms compete to maximize profits by differentiating their products through extensive marketing campaigns and improving ease of product access. In addition to the real value addition of convenience, marketing leads to the creation of a culturally perceived (yet scientifically invalid) value addition of bottled water as a substitute for tap water: better taste, higher quality and safety, healthier, “purer”, sexier, and a variety of other subtle cultural and behavioral phenomena. Thus, the forces leading consumers to the point of product purchase may be one or, more likely, a variety of cultural factors and the convenience of the product. The extent to which one of these factors dominates is unknown.
Whatever the dominate drivers of bottled water demand may be, they are undoubtedly increasing in favor of bottled water companies. Americans increased their per capita consumption of bottled water from 25.4 gallons in 2005 to 36.5 gallons in 2015, averaging 7.1% growth annually, and industry analysts projected that bottled water overtook carbonated soft drinks as America’s top beverage category by volume in 2017. These consumer trends have occurred much to the chagrin of environmental activists. They argue that bottled water consumption is bad for the environment because there is too little recycling of plastic bottles, and bottled water production and distribution is too energy intensive.
Policymakers at state and local levels have acted upon these concerns with a variety of mechanisms over the past decade, ranging from outright bans on several college campuses and in America’s national parks to state sales taxes on bottled water. Yet, these policy interventions have largely failed to have their intended effect, and some have been repealed as a result. On several college campuses, students did not reduce their overall plastic bottled beverage consumption after the bans; they just shifted to other sugary beverages. In Washington state, the sales tax on bottled water succeeded at raising tax revenue but failed to reduce consumption as projected.
In this paper, I will review existing trends related to bottled water consumption, summarize relevant academic literature, explore the failures and misguidance of policy solutions, and propose a new and innovative way for policymakers to intervene in the bottled water space.