ED Note: This is the original “Ask Pablo” column which set off enormous hullabaloo about the “cost” of bottled water. This post was picked up by media organizations far and wide and even by the Fiji water company themselves, who have since taken some interesting steps. Please read it with that historical context in mind!
This week’s AskPablo comes from Maryline: “I am interested to know the ‘true-cost’ of a bottle of Fiji water that currently sells for $1.50 in the United States. David Lazarus wrote a report on the water business in the SF Chronicle and studied the success of Fiji (January 21 edition), where ‘distance and exoticism are marketed as advantages.’ Fiji is now # 2 in premium bottled water, behind Evian where we have the same transportation issue. An environmental absurdity!”
Please note: Due to overwhelming reader interest in this topic some of the assumptions made in this column have been adjusted. Numerous readers were kind enough to provide more accurate values for some of my previous assumptions.
I agree! I once heard Julia “Butterfly” Hill (everyone’s favorite tree-sitting sweetheart) say that it pollutes several times more water to make the plastic bottle than it actually holds. We might as well put that myth to the test while we’re at it. Where do we begin? Well, I doubt that Fiji has a booming plastics industry so they probably get the bottles in the form of “Blanks” from China, which are then expanded to their final size and shaped by a process called “stretch blow molding.” The total mass of the empty 1 liter bottle is probably around 0.025kg (25g) and it is made from PET (Polyethylene terephthalate) Plastics of this type use around 6.45kg of oil per kg, 294.2kg of water per kg, and result in 3.723kg of greenhouse gas emissions per kg. So, with a quick check (200kg/kg x 0.025kg = 5kg of water) we find that Butterfly is indeed correct. Based on my calculations a bottle that holds 1 liter requires 5 liters of water in its manufacturing process (this includes power plant cooling water).
Let’s take a look at the transportation aspect to see what the total ecological impact of an imported bottle of water might be. A container vessel uses 9g of fuel per tkm (that’s metric tons carried x distance traveled), 80g of water per tkm, and releases 17g of GHGs per tkm. The distance from China to Fiji is 8,000km, which gives us exactly 0.25tkm ( (0.025kg / 1t/1000kg) x 8,000km = 1.0tkm). So, 2.3g of fossil fuels, 20g of water, and 4.3g of GHGs per bottle delivered to Fiji from China.
Now let’s look at the trip to the US. The distance from Fiji to San Francisco is 8,700km. But this time the bottles will be full, so they will have a mass of 1.025kg each. This gives us a much larger value of 9.8tkm ( (1.025kg / 1t/1000kg) x 8,700km = 8.9tkm) which I will round up to 9tkm. So, 81g of fossil fuels, 720g of water, and 153g of GHGs per bottle delivered to the US from Fiji.
Since the fossil fuels end up being accounted for in the GHG emissions I’ll ignore those values for now. The total amount of water used to produce and deliver one bottle of imported water is 6.74kg (5kg + 20g + 1kg + 720g)! And the amount of GHGs released amount to 250g (93g + 4.3g + 153g), or 0.25kg, or 0.00025 tons. If you wanted to offset your annual imported water habit (are you eco-chic Hollywood types listening?) with DriveNeutral it would cost you $0.68 (0.00025 tons/day x 365 days/year x $7.50/ton).
But how much does it cost to deliver the water from halfway around the world? Let’s assume that the cost of transportation is based on our fossil fuel use assumptions above and that the bottle producer and the shipping company charge double their material cost. I am not sure if these are valid assumptions, but they are just assumptions after all… So, 160g of fossil fuels to make the bottle, 2g to deliver it to Fiji, and 81g to deliver the full bottle to the US. From economics we learn that fixed costs (equipment, etc.) in high-volume production are negligible in the long run so it is pretty safe to assume that the cost of making and delivering the bottled water is linked to its variable cost. In this case the variable cost is the fossil fuel (since the water comes out of the ground for free), which amounts to 0.243 kg. A standard oil barrel holds 159 liters and one liter of oil weighs 850g/liter, so one barrel holds 135.15kg of oil. One barrel costs between $50 and $70 (let’s say $60, depending on OPEC’s mood and other factors), so 0.243kg would cost $0.11 (1 barrel/135.15kg x $60/barrel x 0.243kg). And applying our earlier mark-up assumption, the cost to produce and deliver a bottle of imported water is $0.22, leaving $1.28 per bottle profit for the manufacturer and the retail store.
I hope that answers your question Maryline!
Pablo Päster, MBA
10/22/07 – Comments were turned off due to excessive spamming, sorry…