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Message
Prices For Bottle Water Plunging...Think Water-Fall
Posted on 9/3/09 at 9:12 am
Posted on 9/3/09 at 9:12 am
My definition of deflation is a contraction of money supply and credit and that is the definition usually cited by classical Austrian Economists...Deflation is sometimes but not always accompanied by a general fall in prices.
However, this thread is not about anyone's definition of deflation, but about the fall in the price of bottled water.
Kevin Depew, one fine writer and a keen observer of all things economic made this interesting observation recently...
'Daily Deflation Datapoint: Bottled-Water Price War Heats Up as Demand Falls'
I did not find it surprising that the price of bottled water was falling since most folks seemed to thrive on tap water long before the bottled stuff came along. What I did find surprising was this little gem from Kevin...
'At its peak, bottled water was more expensive than malt liquor. A Minyanville random survey of retail outlets back in 2008 found that the average retail price for 40 ounces of Dasani purified water, which is owned and marketed by Coca-Cola (KO), is $3.10. Meanwhile, a 40 ounce bottle of Colt 45 malt liquor is a mere $2.05. It's true, and astonishing: at it's peak, bottled water cost 50% more than malt liquor.'
Now that is a bit of a surprise...that supposedly rational individuals would pay more for bottled water than an alcholic beverage...Even if the individuals do not drink alcohol they certainly must realize that it costs more to distill alcohol than it does to purify water to who knows what standard...and that isn't the end of the story...
'Bellas (Michael Bellas, chief executive of New York consulting firm Beverage Marketing Corp.), is talking about bottled water, of course, which happens to be something I've followed closely over the past few years, largely because few consumer luxuries are as widespread and accessible than bottled water. I mean accessible in the literal sense. Despite the fact bottled water costs as much as 4,000 times tap water, and more than three times gasoline, people from all walks of life enjoyed the luxury of paying such an egregious markup for water packaged in convenient bottles.'
Alas, bottled water has fallen on tightly zippered purses, the price has dropped from a high of $6.49 per 24btls down to $2.49 per 24btls. People have found (think reinventing the wheel) that it's possible to survive on tap water. A revelation!
How many here think that folks that find they do fine on tap water will return to paying a 4,000% mark up for bottled water?
Ooops, almost forgot Kevin's link... LINK
However, this thread is not about anyone's definition of deflation, but about the fall in the price of bottled water.
Kevin Depew, one fine writer and a keen observer of all things economic made this interesting observation recently...
'Daily Deflation Datapoint: Bottled-Water Price War Heats Up as Demand Falls'
I did not find it surprising that the price of bottled water was falling since most folks seemed to thrive on tap water long before the bottled stuff came along. What I did find surprising was this little gem from Kevin...
'At its peak, bottled water was more expensive than malt liquor. A Minyanville random survey of retail outlets back in 2008 found that the average retail price for 40 ounces of Dasani purified water, which is owned and marketed by Coca-Cola (KO), is $3.10. Meanwhile, a 40 ounce bottle of Colt 45 malt liquor is a mere $2.05. It's true, and astonishing: at it's peak, bottled water cost 50% more than malt liquor.'
Now that is a bit of a surprise...that supposedly rational individuals would pay more for bottled water than an alcholic beverage...Even if the individuals do not drink alcohol they certainly must realize that it costs more to distill alcohol than it does to purify water to who knows what standard...and that isn't the end of the story...
'Bellas (Michael Bellas, chief executive of New York consulting firm Beverage Marketing Corp.), is talking about bottled water, of course, which happens to be something I've followed closely over the past few years, largely because few consumer luxuries are as widespread and accessible than bottled water. I mean accessible in the literal sense. Despite the fact bottled water costs as much as 4,000 times tap water, and more than three times gasoline, people from all walks of life enjoyed the luxury of paying such an egregious markup for water packaged in convenient bottles.'
Alas, bottled water has fallen on tightly zippered purses, the price has dropped from a high of $6.49 per 24btls down to $2.49 per 24btls. People have found (think reinventing the wheel) that it's possible to survive on tap water. A revelation!
How many here think that folks that find they do fine on tap water will return to paying a 4,000% mark up for bottled water?
Ooops, almost forgot Kevin's link... LINK
This post was edited on 9/3/09 at 9:15 am
1
Posted on 9/3/09 at 9:15 am to Rivers
A perfect example of a commodity that isn't holding value very well, isn't it?
Posted on 9/3/09 at 9:27 am to foshizzle
'A perfect example of a commodity that isn't holding value very well, isn't it?'
As usual, you missed the point entirely. Tap water is selling for more or less what it has always been selling for. So, it is fair to say that water, if you want to consider it a commodity, is holding it's value very well.
Bottled water, on the other hand, was selling for 4,000 times the cost of tap water.
The fools spending 4,000 times more than necessary for bottled water are a perfect demonstration of a warped market...capital directed to inefficent use by fools that thought they were wealthy and smart...but they were dumb and only temporarily wealthy from excess credit provided by the Fed. Too much easy credit always warps markets and causes capital to be spent in foolish endeavors.
Did you say that you are have training in economics.
Posted on 9/3/09 at 9:37 am to Rivers
The whole market went to shite after I bought a water filtration system for my house.
Posted on 9/3/09 at 9:40 am to Martavius
Posted on 9/3/09 at 9:44 am to Rivers
The price of tap water is regulated, because it is provided by public utilities. The price is generally a function of the cost to find and extract it, make it potable, deliver it, and get rid of it (and associated administrative costs). These costs are largely fixed, and should not have increased much over the years, at least in our area (the same does not hold so true in arid areas like the Southwest US, where there are supply issues and rationing has occurred).
Think I'll go have that malt liquor now. It's happy hour somewhere...
Bottled water, on the other hand, carries with it higher delivery costs, plus bottling and packaging, and marketing. The rest is profit.
Bottled water is perhaps one of the biggest ruses ever perpetrated on the consuming public. It isn't surprising at all to find that this is one of the first things families will drop during rough times.
What I find aggravating is that bottled water has displaced public fountains at parks, rec areas, etc., where it should be provided as a public service (after all, these are public places, funded by our tax dollars).
Think I'll go have that malt liquor now. It's happy hour somewhere...
Bottled water, on the other hand, carries with it higher delivery costs, plus bottling and packaging, and marketing. The rest is profit.
Bottled water is perhaps one of the biggest ruses ever perpetrated on the consuming public. It isn't surprising at all to find that this is one of the first things families will drop during rough times.
What I find aggravating is that bottled water has displaced public fountains at parks, rec areas, etc., where it should be provided as a public service (after all, these are public places, funded by our tax dollars).
Posted on 9/3/09 at 9:44 am to Martavius
We have Culligan 5 gal bottles delivered. I do not know how the quality of our delivered water compares to our tap water but the reason we changed was that our tap water chlorine content seemed to go up a few years back.
Another consideration here is the flooding of the water purification plants during the surge tides that sometimes accompany hurricanes. Often simply boiling the water will suffice but it's easier to have lots of 5 gal Culligan water on hand...especially if the power is out.
I know that lugging those 5 gal bottles to the coolers gets tiresome. The Culligan delivery guys are tops and I know their business is way off.
Posted on 9/3/09 at 9:47 am to PresterJohn
quote:
The price of tap water is regulated, because it is provided by public utilities. The price is generally a function of the cost to find and extract it, make it potable, deliver it, and get rid of it (and associated administrative costs). These costs are largely fixed, and should not have increased much over the years, at least in our area (the same does not hold so true in arid areas like the Southwest US, where there are supply issues and rationing has occurred).
We have graduated water rates here, the more you use the higher rate you pay which I'm fine with. The damn sewer rates are triple the water rates though.
Posted on 9/3/09 at 9:48 am to Rivers
quote:
The fools spending 4,000 times more than necessary for bottled water are a perfect demonstration of a warped market
I have to pack something in my kid's lunches and bottled water is convienent. I'm a cheap bastard but I do pay $3 for a 24-pack of water from Kroger because my time is more valuable to me as a single parent than trying to recycle leaky bottles or deal w/ mold building up on canteens.
So I'm a consumer and I think bottled water has its uses..for me I don't want to pack kool-aid or capri-sun or that other crap..and my kids treat water as a 'treat' the same way they do those things when it comes packaged like that.
So flame away if you want but there's obviously a market for bottled water or the industry wouldn't exist.
Posted on 9/3/09 at 9:52 am to PresterJohn
'What I find aggravating is that bottled water has displaced public fountains at parks, rec areas, etc., where it should be provided as a public service (after all, these are public places, funded by our tax dollars).'
One of the best things about Florida is the huge number of public parks. They all (in my experience) have free fountains and restrooms and many have free boat launch ramps, covered picnic tables, fishing piers, etc.
I suspect that 'free' parks will soon be charging for entry...fishing licenses have already increased and for the first time ever a fishing license is required when fishing from shore.
Posted on 9/3/09 at 9:55 am to Rivers
quote:
'What I find aggravating is that bottled water has displaced public fountains at parks, rec areas, etc., where it should be provided as a public service (after all, these are public places, funded by our tax dollars).'
fwiw i agree with this 1000x over. taht pisses me of as well. but this has been going on forever..when i went to the first lollapalooza in 1991 i spent a king's ransom for bottled water as we were stuck the whole day in the viscious Texas heat and there was no other alternative.
the following year when i went i drug a gallon plastic jug of water around with me the whole day..it was heavy in teh beginning but i polished that sucker off as teh day went on.
i think its awful that public places either stop having water fountains and/or stop repairing them so people are forced to buy water.
Posted on 9/3/09 at 10:00 am to Rivers
I find this surprising because I haven't noticed the same decline in the "convenience" market, ie vending machines and the fridges at the check out and gas stations. In fact I'm pretty sure prices have risen recently at the places I've noticed.
They make some water bottles that are dishwasher safe.
quote:
deal w/ mold building up on canteens.
They make some water bottles that are dishwasher safe.
Posted on 9/3/09 at 10:01 am to CAD703X
quote:
i think its awful that public places either stop having water fountains and/or stop repairing them so people are forced to buy water.
Public =/= free. Kill the water fountain and you can charge merchants more because they can sell $4 bottles of water.
Posted on 9/3/09 at 10:04 am to CAD703X
It's your money...I don't care what you spend it on.
You took what I said personally when I was attempting to explain that in an environment with less money available for consumer discretionary spending (said cheap money made available via Greenspan and Bernanke and the US Gov), few but the very wealthy would be spending on bottled water, therefore fewer bottled water plants would have been built, fewer delivery trucks purchased, fewer employees hired...I think you get the drift?
Now some of the plants are sitting idle but the commercial re loan must be serviced or defaulted upon, which might hurt your local banks ability to fund better biz models than a gazillion bottled water plants. The best managed, best capitalized bottled water plants will survive while lesser firms perish...that is the way capitalisim is supposed to work. Unless Ben decides to bail out all the bottled water plants.
This is not a flame, I am attempting to explain what is going on throughout the economy, not simply in bottled water.
You took what I said personally when I was attempting to explain that in an environment with less money available for consumer discretionary spending (said cheap money made available via Greenspan and Bernanke and the US Gov), few but the very wealthy would be spending on bottled water, therefore fewer bottled water plants would have been built, fewer delivery trucks purchased, fewer employees hired...I think you get the drift?
Now some of the plants are sitting idle but the commercial re loan must be serviced or defaulted upon, which might hurt your local banks ability to fund better biz models than a gazillion bottled water plants. The best managed, best capitalized bottled water plants will survive while lesser firms perish...that is the way capitalisim is supposed to work. Unless Ben decides to bail out all the bottled water plants.
This is not a flame, I am attempting to explain what is going on throughout the economy, not simply in bottled water.
Posted on 9/3/09 at 10:05 am to TigerinATL
quote:
They make some water bottles that are dishwasher safe
do you have kids? i find water bottles buried in their room WEEKS after they brought them to school with them or they've had them in their locker for ages.
that shite stinks and even if the algae is technically gone, the kids arent going to drink from them.
sure in a perfect world each kid would have one bottle that i religiously clean every day..but i can barely keep up with their homework, cook dinner, bathe them and get them to bed on time and i'll be damned if i'm adding the hassle of keeping up with a water bottle to that routine.
Posted on 9/3/09 at 10:08 am to Rivers
quote:
It's your money...I don't care what you spend it on.
You took what I said personally
didnt meant to sound like i took it personally; i was just pointing out that there's alot of middle and lower class people who buy bottled water INSTEAD of kool-aid or something because we dont wnt to feed our kids all that sugar. yeah i could make them drink from the water fountain at school, but experience has shown me (like i pointed out above) that having a cold sealed plastic bottle of water appeals to them and they dont beg for that other crap. its a 1-1 trade-off, i'm going to put some kind of drink in their lunch..might as well be water.
eta..at the kroger by my house, the 'kroger brand' bottled water section takes up nearly half an aisle..and is almost ALWAYS completely cleaned out. so from that standpoint, this stuff is being bought at a much higher rate than capri sun or kool-aid boxes.
This post was edited on 9/3/09 at 10:10 am
Posted on 9/3/09 at 10:21 am to CAD703X
' we dont want to feed our kids all that sugar.'
I understand completely. I don't drink sodas, gatorade, kool aid, or any bottled water with sweetner in it. Occasionally we make home made lemon ade or iced tea with sugar but seldom do that any more. We drink a lot of water but with the 5 gal containers that fit into a cooler its pretty inexpensive.
One other point...When I visit a hospital I don't touch anything that I don't absolutely have to touch and I never drink from the fountains. When I get home I scrub my hands or sometimes go straight to the shower...and I have a pretty hardy immune system.
I understand completely. I don't drink sodas, gatorade, kool aid, or any bottled water with sweetner in it. Occasionally we make home made lemon ade or iced tea with sugar but seldom do that any more. We drink a lot of water but with the 5 gal containers that fit into a cooler its pretty inexpensive.
One other point...When I visit a hospital I don't touch anything that I don't absolutely have to touch and I never drink from the fountains. When I get home I scrub my hands or sometimes go straight to the shower...and I have a pretty hardy immune system.
Posted on 9/3/09 at 10:44 am to Rivers
quote:
We drink a lot of water but with the 5 gal containers that fit into a cooler its pretty inexpensive.
i do this as well and my fridge has a built-in filter. the idea is that the kids use the fridge water on the door or the 5-gallon and teh bottles go to school only..but i gotta tell you..sometimes i've been working the yard for hours and i come in and just grab a bottled water and go outside & drink it. sometimes i'm so thirsty i just dont give a damn.
Posted on 9/3/09 at 11:07 am to CAD703X
quote:
sure in a perfect world each kid would have one bottle that i religiously clean every day..but i can barely keep up with their homework, cook dinner, bathe them and get them to bed on time and i'll be damned if i'm adding the hassle of keeping up with a water bottle to that routine.
Sorry :prayerssent:Posted on 9/3/09 at 11:23 am to TigerinATL
quote:
TigerinATL
not looking for sympathy; just setting up why i opt for certain convienences over cheaper options
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