Did you know you can buy a bottle of water from Harrods for £80 (US$99), an upmarket department store in London (The Economist, 2017). Premium water, i.e. bottled water selling for $1.30 or more per litre, is commonly referred to as ‘liquid gold’.
“According to Zenith Global, a consulting firm, the global market has grown by 9% annually in recent years and is worth $147bn. The main reason is changing lifestyles. People are spending more time, and eating more of their meals, away from home. They are also switching from soft drinks and alcohol to healthier fare.
Data from Beverage Marketing Corporation (BMC), another consultancy, show that consumption of bottled water overtook that of sugary soft drinks in America in 2016.
Basic brands, such as Aquafina from PepsiCo, compete on price and have slim margins. (The cost of the raw material, which comes from either natural or municipal sources, is next to nothing; the main costs are packaging, distribution and marketing.)
At the other end of the scale, convincing customers to pay a lot should be hard when your product doesn’t have a distinctive taste and an alternative is freely available from the tap in most rich countries. But “premiumisation” is working. Though still a small part of the American market, really high-cost bottled water (selling for more than $1.30 a litre) has been one of its fastest-growing areas, says BMC.” (The Economist, 2017, p.54).
Expensive water is also becoming a status symbol for some, and “High prices can be controversial, given that many people in poor countries have limited access to drinking water…” (The Economist, 2017, p.54).
I pay 1-2 cents to fill my water bottle up from my perfectly acceptable tap, others pay $1 to $3 to grab a bottle from a shop fridge, and some pay $99 for a fancy looking bottle! Psychological marketing – the art of overcoming rational thinking.
The Economist. (2017) Bottled Water: Liquid Gold. The Economist. 25 March, 2017.