You Are Paying 300 Times More for Bottled Water than Tap Water

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July 12 2013 4:11 PM

You Are Paying 300 Times More for Bottled Water than Tap Water

This post previously appeared on Business Insider.

By Matthew Boesler

It's consumer confidence Friday. Preliminary results from the University of Michigan's July consumer confidence survey indicated that confidence dipped slightly in July, defying consensus expectations for an increase to new five-year highs.

Against that backdrop, ConvergEx Group Chief Market Strategist Nick Colas highlights a few eye-opening statistics on bottled water consumption in the United States this morning.

Perhaps the most incredible number: at an average cost of $1.22 per gallon, consumers are spending 300 times the cost of tap water to drink bottled water.

In fact, that number could be even higher, writes Colas in a note to clients.

"The [bottled water] industry grossed a total of $11.8 billion on those 9.7 billion gallons in 2012, making bottled water about $1.22/gallon nationwide and 300x the cost of a gallon of tap water," Colas says. "If we take into account the fact that almost 2/3 of all bottled water sales are single 16.9oz (500 mL) bottles, though, this cost is much, much higher: about $7.50 per gallon, according to the American Water Works Association. That’s almost 2,000x the cost of a gallon of tap water and twice the cost of a gallon of regular gasoline."

A few more stats, via Colas:

  • Americans spent $11.8 billion dollars on bottled water in 2012, the latest data available from the BMC. This represented a 6.5% increase from 2011, during which the bottled water industry made $11 billion.
  • That $11.8 billion was spent on nearly 9.7 billion gallons of water, putting the average cost at $1.22/gallon. 64% of this amount, however, was spent on single- the 16.9oz/500 mL container mentioned above which can push costs up to $7.50/gallon. American Water Works Association showed that tap water costs only $0.004 a gallon, less than 1/300 the cost of bottled water.
  • And we are the biggest bottled water drinkers on the planet in terms of sheer volume: China has been catching up as of late, having consumed 7.7 billion gallons to our 9.7 billion. But we still account for 15% of total world consumption, which stands at about 61.4 billion gallons annually. And somewhat surprisingly, we drink more bottled water than bottled soda on an annual basis, according to the BMC. Though Europe was the originator of bottled water (Perrier is, after all, French), largely due to earlier tap water supply issues, America now drinks almost three times as much bottled water as the largest European consumer, Italy (3 billion gallons).
  • Bottled water consumption and sales have increased 312% and 371%, respectively, since BMC began tracking dollar amounts in 1991. In that year, Americans spent $2.5 billion on 2.4 billion gallons about $1.07/gallon.
  • We have also more than tripled our bottled water intake per capita since 1991, from 9.8 gallons per person annually to 30.8 i n 2012, the highest level on record. Mexico is the world leader in gallons consumed per person, though, at 65.5; the U.S. ranks 11th. The rest of the top 5 are: Italy, 49.9; Thailand, 44.9; United Arab Emirates, 43.2; and Belgium/Luxembourg, at 38.3.

"What’s most remarkable about this data, though, is what it says about the American consumer: that despite the (debatably) excessively high cost of bottled water when compared to its tap equivalent, we continue to buy it – even during an economic downturn," writes Colas. "While Americans did cut back slightly on bottled water during the recession about -3% over the course of 2008-2009 consumption hit a new all-time high in 2012 and shows no sign of stopping."

Bottled water.
Bottled water.

Photo by Purestock/Thinkstock