‘WE HAVE DRUNKEN OUR WATER FOR MONEY’: THE POLITICAL ECONOMY OF BOTTLED WATER, 1940-1995 by SAMUEL P. DUNCAN Submitted in partial fulfillment of the requirements For the degree of Master of Arts Thesis Adviser: Theodore Steinberg Department of History CASE WESTERN RESERVE UNIVERSITY August, 2010 CASE WESTERN RESERVE UNIVERSITY SCHOOL OF GRADUATE STUDIES We hereby approve the thesis/dissertation of ______________________________________________________ candidate for the ________________________________degree *. (signed)_______________________________________________ (chair of the committee) ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ (date) _______________________ *We also certify that written approval has been obtained for any proprietary material contained therein. Table of Contents I. Introduction ............................................................................................... 5 II. Establishing the Dichotomy: Bottled Water vs. Tap Water....................... 12 III. Regulation of the Market, for the Market, and by the Market................. 26 IV. Conclusion ................................................................................................ 47 V. Bibliography ............................................................................................. 50 1 List of Figures Figure Page 1 U.S. Bottled Water Consumption Per Capita (in gallons), 1976‐2007……………… 7 2 Industry Sales (Dollars) 1961‐1996………………………………………………………………… 25 3 Industry Sales by Producer Size, 1995‐1996……………………………………………………. 45 2 List of Tables Table Page 1 FDA Regular Testing for Drinking Water Contaminant Standards ...……............ 36 2 Definitions for Bottled Water Labels................................................................. 40 3 ‘We Have Drunken Our Water for Money’: The Political Economy of Bottled Water, 1940‐1995 Abstract by SAMUEL P. DUNCAN The evolution of the bottled water industry from the 1940s to the mid‐1990s often reflected larger cultural, political, and economic changes, such as a bourgeoning environmental movement and the rising influence of neoliberalism in America’s political and economic structures. This thesis seeks to explore the history of bottled water within the context of these larger changes by examining the federal government’s role in the rise and success of the industry. In some instances, the choices of regulators and legislators affected consumer behavior by reinforcing the perception of bottled water as a pure alternative to the tap. In other instances, their actions produced market structures that favored the increased commodification of water by externalizing the production and environmental costs onto the consumer. The political economy of bottled water, therefore, helps explain the industry’s success in a country where nearly everyone has cheap access to safe, clean water. 4 ‘We Have Drunken Our Water for Money’1: The Political Economy of Bottled Water, 1940‐1995 I. Introduction In 2006, Fiji Water launched an advertising campaign with the tag line, “The label says Fiji because it’s not bottled in Cleveland.” The Cleveland Water Department promptly retaliated and conducted a comparative analysis of Fiji water and Cleveland tap water. The study revealed that the sample of Fiji water contained 6.31 micrograms of arsenic per liter, while Cleveland’s tap water revealed no measurable arsenic content. The bottled water company’s clever quip had them eating crow. Even though Fiji president John Cochran publicly questioned the validity of the results, the company quietly pulled the ad the following week.2 The Fiji ad and the Cleveland Water Department’s reaction to it revealed the competitive relationship between bottled water and tap water. That relationship was neither natural, nor inevitable. Although the commercial sale of bottled water in the United States dates to the 1840s, its emergence as a product that directly competed against tap water is a far more recent phenomenon. In the nineteenth century, bottled water appealed to interests of health and vitality, but the availability of relatively clean, safe, cheap public water made bottled water an irrelevant consumer choice for many Americans in the early twentieth century. Citizens did, on occasion, purchase bottled water as a means of avoiding the potential bacteriological contamination of some public 1 Lamentations, 5:4. 2 Olivera Perkins, “Don't Tread on Cleveland Water Fiji Ad Wisecrack Prompts Quality Test,” The Cleveland Plain Dealer, July 19, 2006; Olivera Perkins, “Fiji Water Swallows Its Pride, Pulls Ad,” The Cleveland Plain Dealer, July 28, 2006. 5 water supplies that led to outbreaks of cholera, typhoid, and other illnesses, but the widespread introduction of chlorine to municipal systems significantly reduced the threat of these afflictions by the 1930s.3 Consequently, chlorine nearly eliminated the relatively small segment of the bottled water industry that marketed their product as the safe alternative to tap water. More frequently during this earlier time period, the appeal of bottled water depended on its cachet among consumers. Bottlers often marketed the product as an element of fine living or branded it in a way that praised its medicinal properties. In both cases, the appeal was linked to the long tradition of health spas that accompanied mineral waters. Disposable money and time limited the spa experience to elites, but by bottling the waters of their resort springs, companies such as Poland Spring, Saratoga, Mountain Valley, and others transformed a luxury item into a product with mass appeal.4 Throughout the first half of the twentieth century, bottled water remained a niche health product, not a rival to public water, and therefore appealed only to a rather small segment of the population. By the 1960s and 70s, however, an increasing number of Americans were drinking bottled water to supplement or even replace tap water. In the thirty years between 1976 and 2006, per 3 Martin V. Melosi, The Sanitary City: Environmental Services in Urban America from Colonial Times to the Present, Abridged. (Pittsburgh: University of Pittsburgh Press, 2008), 223; Frank Chapelle, Wellsprings: A Natural History Of Bottled Spring Waters (Rutgers University Press, 2005), 15‐16. 4 For a discussion of the appeal of emulating the consumption practices of elites, see Thorstein Veblen, The Theory of the Leisure Class, Oxford World's Classics (New York: Oxford University Press, 2007) especially chapter four on "Conspicuous Consumption"; Chapelle, Wellsprings, 39‐40,118; David L. Richards, Poland Spring: A Tale of the Gilded Age, 1860‐1900 (University of New Hampshire Press, 2005). 6 capita consumption of bottled water in the U.S. rose dramatically from 1.63 to 27.66 gallons a year (Figure 1).5 U.S Bottled Water Consumption 1976‐2007 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 annual per capita consumption in gallons Figure 1. U.S. Bottled Water Consumption Per Capita (in gallons), 1976‐2007 Only a handful of authors have attempted to tell the story of bottled water, and they typically portray the industry’s rapid and successful growth as a marketing coup – a narrowly conceived tale in which producers manipulate naïve consumers through clever advertising. These works approach the subject with little regard for an historical perspective, ignoring how and why the market structures that govern the industry are created and changed over time, and to what consequence. For instance, the most notable example of this literature, Elizabeth Royte’s Bottlemania: How Water Went on 5 United States Department of Agriculture, Economic Research Service, “ERS/USDA Data ‐ Food Availability (Per Capita) Data System: Food Availability Spreadsheets,” Data Sets (Beverages), February 1, 2010, http://www.ers.usda.gov/Data/FoodConsumption/FoodAvailSpreadsheets.htm#beverage; Natural Resource Defense Council, “Bottled Water: Pure Drink or Pure Hype?,” March 1999, http://www.nrdc.org/water/drinking/bw/bwinx.asp. 7 Sale and Why We Bought It, offers a host of personal anecdotes and a synchronic examination of local disputes over property rights and the impacts of groundwater pumping, but it provides no answer to the book’s original subtitle (which has subsequently changed to “Big Business, Local Springs, and the Battle Over America’s Drinking Water”).6 Some other works include only brief discussions of bottled water within the context of an activist literature opposed to current water‐use practices and the privatization of water resources, but they do so in only the most vague and general terms without addressing the historical development of the laws and regulations that apply to the bottled water industry.7 Missing in these works is an analysis of the relationship between state power and the market structures that frame the industry, or any sense of how public perception and administrative policy both influenced and were influenced by one another. The actions and choices of law makers and regulators are essential and 6 Elizabeth Royte, Bottlemania: How Water Went on Sale and Why We Bought It, 1st ed. (Bloomsbury USA, 2008). 7 In Frank Chapelle's Wellsprings, the author attempts an historical perspective, but not a particularly satisfying one. Chapelle attributes the success of bottled water to the industry’s ability to provide consumers with choice, variety, and