Water - conspicious consumption

Americans spend about $15 billion a year on bottled water, more than we spend on movie tickets. We drink more bottled water than milk, coffee, or beer. This is puzzling, because in most parts of the country, bottled water is no healthier or tastier than tap water (it is often worse). There is also considerable environmental cost of the production of plastic bottles and the transportation of the water by truck. And bottled water costs more, by volume, than gasoline. What makes it so appealing?

One answer is that we are drawn to its purity. In general, people prefer natural over artificial. We are wary of medical antidepressants but comfortable with herbal remedies such as ginko biloba. Genetically modified foods are repellent to many. This huger or the natural poses a problem from the stand point of marketing. As the writer and activist Michael Pollan explains in “The Omnivore’s Dilemma,” it is hard to make money from whole natural foods. This is in part because, as a vice president for General Mills pointed out him, you can’t easily distinguish your company’s corn or chicken from everyone else’s corn or chicken. To turn a profit, it helps to make the corn into a brand-name cereal and the chicken into a TV dinner. Pollen described how in the 1970s, a food additive manufacturer called International flavors and Fragrances hoped to dissuade people from natural foods, arguing that the artificial is better for you. Natural ingredients are: “a wild mixture of substances created by plants and animals for completely non-food purposes – their survival and reproduction,” we eat them at our own risk.

This has never been a viable strategy, though. A smarter approach is to exploit people’s biases, to create new products and market them as natural. Bottled water is the most successful example of this.

Now, there is an alternative to this essentialist theory, one that is often presented as an explanation of putatively irrational preferences and that has, I think, considerable merit. This is that bottled water is a sign of status. It is an example of what the sociologist Thorstein Veblen called “conspicuous consumption,” a way to advertise how much money you have or more generally, to show off your positive traits as a person. If the water were free or had obvious health benefits it would be useless as such a signal, and, according to the signaling account, fewer people would drink it. ~ Page 42