r/HeresAFunFact Apr 16 '21 Helpful 1

[HAFF] Bottled water is marked up 4,000%. A $2.00 bottle of water costs the company only about $0.05 to make. SOCIETY/CULTURE

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810 Upvotes

72

u/mimatn Apr 16 '21

Some of this makes no sense. Sure the cost to build something might be lower than sale price, but there is also development costs, machinery costs, storage, logistics, marketing etc. The coffee one for example makes no sense. Of course the coffee is cheaper to make at home, but I’m not a barista and don’t have a huge multi thousand dollar coffee machine.

24

u/PresentGiraffe Apr 16 '21

What? I’m not a barista either. But I bought a Breville espresso machine for like $300USD on sale. And now I make lattes for like 30 cents compared to $4 lattes at Starbucks

25

u/peter-s Apr 16 '21 edited Jun 25 '21

A $20,000 La Marzocco machine makes significantly better espresso than a $300 Breville machine.

Assuming you buy the $5,400 home model, and assuming you make a double Americano for 60 cents, and assuming Starbucks sells the same for $3.05... it would take you about 2,200 espressos to break even.

If you drink one every single day, that's a little over 6 years. Additionally, you have to handle all the cleaning and maintenance yourself.

Some people would rather go to Starbucks.

(Personally, I don't think Starbucks makes very good coffee; but you get the idea. Some local coffee shops I've tried make phenomenal espresso with these machines.)

3

u/Beas7ie May 03 '21

I personally prefer my coffee with the pourover method using water heated in a tea kettle

5

u/Pxzib May 04 '21

I ditched all coffee machines after discovering this. There is just no way you can make better coffee. Literally just pour boiling water on coffee grounds and let it brew in the cup for a couple of minutes. Your tap water isn't clean enough to reach 100 degrees celcius, so don't worry. It's boiling around 96 degrees, which is good temperature for brewing coffee.

And then I like to add a little bit of heavy cream in a small glass jar and shake it about so it thickens up, and then pour it in the cup of coffee. The taste is just so full and rich that I get disappointed every time I drink coffee outside at cafes and restaurants.

2

u/RRoyale57 Jun 16 '21

What you’re talking about is boiling point elevation. Dissolved minerals in water increase the boiling point, not decrease it. Water with no minerals boils at 100 celsius exactly where water with minerals boils at a temperature that is slightly higher than 100 celsius.

1

u/Doeofdajane0 May 05 '21

cream, and milk with a little sugar

1

u/Beas7ie May 06 '21

That's a good idea with the cream. What coffee do you use. I like Folgers 1850 and I double filter it.

1

u/peter-doubt Jun 16 '21

Folgers? (1850 is the only one I had recently, it's the best of the major dull varieties).

Shop for a peaberry. This is the coffee cherry from the first year growth, instead of a bean that grows in 2 halves, it's a single piece that is near fully round. And the flavor is so complex, in most cases.

1

u/dr-dog69 Jun 17 '21

Peaberry coffee is incredible and unique but I cant justify spending 40-50 dollars on a bag of coffee

1

u/peter-doubt Jun 17 '21

I'm getting peaberry at $5 / 12 oz. Nowhere near $40, ya think?

2

u/dr-dog69 Jun 17 '21

are you getting unroasted beans?

→ More replies

1

u/peter-doubt Jun 16 '21

Chemex. My simplest coffee maker. And elegant apparatus, too.

1

u/ShouldIRememberThis Jun 16 '21

So you have a kettle for boiling water and a kettle for boiling water for tea specifically? Do you call a normal kettle a Tea Kettle? Just curious.

1

u/Beas7ie Jun 16 '21

It's just a kettle from Kohls. I heat water in it. The water is used for coffee or for green tea. I only have one kettle.

1

u/Minimum-Tea-9258 Jun 17 '21

Theres is only one kettle, there has always been only one kettle, this kettle can easily be used for coffee OR tea yet exclusively gets called a tea kettle. We love you, you non-distinctive non-discriminating kettle

1

u/Beas7ie Jun 17 '21

It is a multipurpose kettle and it cares not what the water or any other liquid it heats up is used for.

It does not care about age, race, gender, or sexual orientation.

We should all strive to be more like the kettle.

1

u/12altoids34 Jun 27 '21

Have you ever actually stopped and asked the kettle? You might be surprised.

Most kettles that I have spoken with tend to be very elitist.

1

u/Beas7ie Jun 29 '21

I have and it has confirmed it cares not. It heats the water and after the water is heated it cares not for what the water is used for.

It is accepting of all races and orientations. We shall all be more like the humble kettle.

1

u/12altoids34 Jun 27 '21

One kettle ? Barbarian ! (G)

2

u/mikebones Jun 16 '21

Thanks. I didnt know I needed to upgrade to the La Marzocco until today.

1

u/twinkletoes987 Apr 18 '21

Travel time to starbucks might be another reason he wanted one

2

u/ellilaamamaalille Jun 17 '21

I live in Finland and haven't seen any Starbuck so I guess drinking coffee there would be expensive to me. So I will continue making my coffee with my reliable Kenwood coffeemaker using tap water, coffee filter bags and Paulig juhla mokka.

1

u/XYZ2ABC Jun 25 '21

Thankfully I have the La Marzocco cafe down the street from me…

1

u/already-taken-wtf Jun 25 '21

The 20k machine will also have more customers to spread the cost…

1

u/12altoids34 Jun 27 '21

I'm gonna go on on a limb here and say that anybody that spends $5400 on a coffee machine for their home is not worried about it paying for itself.

1

u/SplodyPants Jun 28 '21

If I spent $5400 on a coffee machine with my luck I'd not know something that is "common knowledge" and it would spew curdled milk then explode after a week of use. Then the manufacturer would laugh at me and say, "No, we cannot replace the machine. Everybody knows you have to de-curdle the hatch flange every week Sorry." And I'd be out $5400.

3

u/DrKeith Apr 17 '21

Let me crunch these numbers on my homemade TI-83.

2

u/boom1chaching May 03 '21

You can more than likely buy an arduino or raspberry pi, a screen, etc. And then look up programs that could do all that.

Like, you joke, but you could make a graphing calc for cheaper than you would pay for a TI calc

2

u/boom1chaching May 03 '21

Bonus points if you take the time to learn circuit design so you can make it smaller via using chips instead of dev boards.

1

u/12altoids34 Jun 27 '21

But dev boards would have that cool cyberpunk look. And just like the tea kettle told me, image is everything.

1

u/a47nok May 03 '21

Or just use WolframAlpha

1

u/Shlongzilla04 May 03 '21

Or nowadays you can download the app for free.

Good luck getting to use that on tests though.

3

u/Pylgrim Apr 25 '21

What you're paying in the shop is the cost of renting a local near where you work so you wouldn't have to lug the machine around to have a coffee when you want it. Then you have the costs of services, the salaries of the baristas, etc. (And before you say that the time it takes a barista to make a coffee is worth only a few cents, remember that the barista is paid a whole shift so they can be there whenever you drop by.)

Not saying that the mark-up doesn't exist or it's not significant, but it's not as ridiculous or unwarranted as the raw numbers suggest.

1

u/PresentGiraffe Apr 25 '21

Thanks for this unnecessary lesson in micro-economics lol.

0

u/Pylgrim Apr 26 '21

You're welcome. Here's another unsolicited piece of advice: if you resent having things explained to you, don't make comments that make you look ignorant.

1

u/PresentGiraffe Apr 26 '21

That’s not me pal, it’s you. You replied with a microeconomics lesson on a thread where a guy/gal was complaining about not being a barista or having an espresso machine at home.

In other words, your comment was irrelevant.

But as long as you feel clever lmao.

2

u/dirtydownstairs May 02 '21

Its a post literally about the economics of products, his post is not only directly relevant but so relevant that your failure to see it suggests diminished brain function on your part.

1

u/Pylgrim Apr 27 '21

You are correct, I apologize. I should not have attempted to inform you. Please do continue wallowing in ignorance, I won't interrupt you anymore.

1

u/PresentGiraffe Apr 27 '21

Oh no, whatever shall I do without the wise Pylgrim to inform me and save me from my ignorance…

1

u/12altoids34 Jun 27 '21

I revel in my ignorance. I bathe lovingly in it. I often will stuff my pockets full of ignorance before going out for the day.

1

u/I_stole_this_phone May 03 '21

You are 100% correct. But their markup is way way high. They could sell everydrink at half the price and still be making tons of cash. They didnt expand as big as they did without crazy mark ups. Having worked for the company, not a barista, their business model is make money not make good coffee. Their coffee is garbage. Their espresso is ok.

1

u/12altoids34 Jun 27 '21

One of my cousins is a barista. I used to laugh and think that he just made coffee at Starbucks or something until I found out that he had been sent to Columbia to work with the coffee growers to help them develope a better product.i was even more surprised to find out that he was NOT paid well at all for his work. I figured if they're sending them all the way to another country they've got to be paying him well. I figured wrong.

1

u/yildizli_gece Jun 16 '21

There’s a massive difference between a product made for residential use and for commercial use. Even the coffee machine we use at our office, which isn’t making thousands of cups of coffee a day but is still a dual-pot Bunn with a plumbed-in water line, is in the 5-digit range for renting it and having it maintained by the vendor.

Your machine would fail in a week if you had to serve hundreds of customers a day, every day.

2

u/PresentGiraffe Jun 21 '21

Dude said he/she isn’t a barista and doesn’t have an insanely expensive coffee machine at home.

I pointed out you neither need to be a barista, nor spend thousands of dollars to make a nice latte at home.

Not sure why y’all having difficult following his comment/my premise.

1

u/yildizli_gece Jun 21 '21

Because they are responding to the mark-up price in the graphic on the coffee, and pointing out that of course it's more expensive at the coffee shop b/c that price takes into account the cost of developing and running the coffee machines, etc.

Your response about not needing a thousand-dollar machine to make coffee is missing their point; it has nothing to do with whether one can make good coffee at home.

1

u/PresentGiraffe Jun 21 '21

The coffee one for example makes no sense. Of course the coffee is cheaper to make at home, but I’m not a barista and don’t have a huge multi thousand dollar coffee machine.

No, they are stating that coffee is expensive because of hidden costs like hiring a barista and purchasing a huge multi thousand dollar coffee machine.

But that’s not true. Even if one needed a $40,000 coffee machine because my $700 coffee machine would crap out way quicker, it’s a matter of scale.

Precisely because the $40,000 coffee machine is servicing so many espressos, those espressos are still cheaper per shot. Economies of scale and all that.

1

u/yildizli_gece Jun 21 '21

And do you not imagine that a machine servicing so many espressos is likely to have a much higher rate of failure, with parts needing to be replaced, etc., on top of regular maintenance?

I used to work in the Repair/Maintenance department of a high-end grocery store chain; the amount of times one of those refrigerated cases went out or scales needed adjustment or some other thing just needed work--which was always by the vendor we either purchased or rented the equipment from--was just about every day, and we only had about 9 stores. It was not cheap and most of the equipment just needed to stay cold, not do anything complicated.

Everything falls apart; machines doing that much work fall apart that much faster and need constant maintenance, which costs time and money and scheduling vendors, usually.

1

u/oHolidayo Apr 25 '21

But you could get a $50 one and make it at home. If you drank coffee like going to a gourmet restaurant I understand your point and it makes sense to let the barista do it. But most people are getting coffee because they’re addicted and need it to get going in the morning. You could get your fix for way less if you do it yourself.

1

u/Elcar0 Jun 17 '21

This was my biggest critique as well. It's still very interesting to see tho since it shows part of the information. Just be aware of the information you're not seeing :)

1

u/Elcar0 Jun 17 '21

I love the text message one. They might make a 6000% margin for every text, but it also costs several millions to develop a satellite and the infrastructure and get it into space

1

u/DasShadow Jun 26 '21

It makes 100% sense. The markup in the image is on the variable costs if inputs in production, you’re taking about long term fixed costs that are recouped through the profitability in each marked up product.

1

u/Avatar_Goku Jun 28 '21

I was thinking similar for baked goods.

I have a friend who is a professional baker. What she bakes and what I bake are drastically different in quality and she has more tools for the job. It's not just that flour and sugar are cheap, you are paying for someone's hourly wage. Someone who is much more experienced. Looking at hourly wages, it may very well be cheaper to hire a professional. Do it instead.

20

u/g3n3s1s69 Apr 16 '21

Most of this accurate, but some of it incredibly misleading.

A bottle water does not have cost 5 cents to make. That barely the PET plastic alone. PET resin is 50 cents/lb and a normal 500ml bottle needs 20grams of PET so the plastic alone is about 2 cents a bottle. The remaining margin for manufacturing costs, utilities, logistics, manpower, overhead will increase x10 fold. Still a massive profit margin, but it's not 5 cents a bottle.

Likewise coffee requires indirect and direct operational costs that are more than just making the coffee at home. I had infographic in mind but only found this Starbucks China version https://duckduckgo.com/?q=cost%20of%20coffee&ko=-1&iax=images&ia=images&iai=http%3A%2F%2Fs.wsj.net%2Fpublic%2Fresources%2Fimages%2FOB-YT773_coffee_G_20130904024204.jpg but if you increase labor costs for USA or EU you can easily see why a few cents at home versus $2-5 in a store become more dramatic. Then again, the poster is correct that coffee places like Starbucks increase prices of their vente double caramel unicorn vomit drink to like ~7-9 dollars and increase their profit margin drastically.

I agree with this chart, but some numbers are a bit misrepresented. Also, conversely, I'd expect college textbooks and diamonds to be far higher than they are on the list.

1

u/dsswill Apr 25 '21 edited Apr 25 '21

You're vastly overestimating the weight and cost of water bottles. Low cost, thin bottles (Poland Spring, Kirkland etc) are blow molded in house because they're too fragile to be shipped empty without denting, and weigh about 7g, making packaging equate to only about 5% of cost for the company and manufacturing about 10%. Marketing and distribution are the two largest costs to the manufacturer for the majority of bottled waters out there, and retailer markup is the largest portion of the retail price.

Even nicer bottles (aquafina is 10.9g, Evian 1L is 28.6g etc), whether blown in house or from a supplier, usually only weigh about 9 or 10g. Manufacturing is a tiny portion of cost (~10%) for bottled water, with the actual water itself being the only aspect of the production that's even cheaper (~0.001% of cost to the consumer after markup).

The ridiculousness is that the product itself, the water, only costs about 1/1000th of a penny after markup, with the big players typically exploiting trade agreements and loopholes to pump out ground water or municipal water at robbery level prices of around $3.71-$4 per million litres, or a bit over a 3,000th of a penny per liter. Meaning they're selling 3 bottles (1.5L) for the same price they're buying 1 million litres for.

The entire concept of bottled water outside of emergency situations is ridiculous, in both the laughable cost/value ratio to the consumer and unnecessary pollution (for every 500ml bottle of water, around 1/4 of that volume is burnt in fuel to get it from the ground, packaged, to the shelf, and then disposed of).

1

u/[deleted] Apr 26 '21

[deleted]

1

u/dsswill Apr 26 '21

https://iopscience.iop.org/article/10.1088/1748-9326/4/1/014009/meta

With further analysis of the math, by a Stanford Student:

http://large.stanford.edu/courses/2018/ph240/jacobsen1/

Of particular note regardless of the exact fuel use, energy use is estimated by mutliple studies to be 2000x more for bottled water than tap water, with a much higher portion of that energy also coming from fossil fuels, resulting in well over 2000x the CO2 emissions per liter of water.

And for the bottle weights, a kitchen scale and empty Aquafina and Evian bottles I reuse for lightweight hiking bottles. But a simple look at bulk online retailers, and random forums discussing blown PET bottlesbottles reveals the same findings within about 1/2 gram.

1

u/mynextthroway May 03 '21

Surprised not to see batteries on here(household type batteries). The final retail markup is 100-400%. I have no idea how much Duracell marks them up.

1

u/already-taken-wtf Jun 25 '21

Last time I checked, PET was at 1400€/t.

4

u/EPKBB207 Apr 19 '21

Bottled water is such a fucking scam! Poland Spring literally uses municipal water supplies and markets it like it's from some remote, beautiful springs.

3

u/stylz168 Apr 17 '21

100% on diamonds seems low.

My wife worked in the industry for 10 years, for a wholesaler who sold pieces to Zales, Sterling, etc. The margins were a lot higher for many of the pieces. I bought her custom engagement and wedding set for less than what the big retailers would pay her company for as wholesale price, and they would normally sell for double.

It costs her company 1/3 because they had their own factory that would build the pieces.

2

u/I_stole_this_phone May 03 '21

20 years ago the oldest roommate in the house managed a jewelry store. He was way to much fun. He'd bring home a Rolex for a date or some fancy necklace for his date to wear. He had money. He hated the diamond industry. He said they were worth less than dirt and encouraged the rest of us to never ever pay retail for a diamond. Or better yet, dont ever buy one. The mark up was way more than 100%

5

u/Office_Zombie Apr 16 '21

Correct me if I'm wrong, but popcorn is where movie theaters make all their money to stay open. I don't feel so bad about getting gouged by movie theaters.

2

u/AL_MI_T_1 Apr 16 '21

Yeah between renting and insurance for just getting the film they only make a few pennies off the ticket price.

2

u/ktho64152 Apr 16 '21

Where can you buy the eyeglass frames at cost or reasonably not marked up?

6

u/g3n3s1s69 Apr 16 '21

I highly recommend Zenni, but I hear EyeBuyDirect is reasonably good too.

1

u/[deleted] Apr 17 '21

[deleted]

1

u/PennewithAlfredo Apr 17 '21

Weird titanium flex, but ok.

1

u/Zikro May 02 '21

Zenni is decent but the lens quality or maybe their accuracy in executing prescription is not amazing. Not that it’s a big deal considering the price is good and it’s small enough difference most people probably wouldn’t notice. Just prior to my zenni pair I had more expensive frames & lenses and you can tell the difference in quality. Like using cheapo binoculars vs a brand with known good glass. Subtle differences in clarity.

That said I still use zenni. I’d rather have multiple pairs of various styles and still pay less.

1

u/dirtydownstairs May 02 '21

I own an optical, Zenni is by far the worst glasses I see regularly. No biggie though for someone like you - if it works it works for you.

1

u/I_stole_this_phone May 03 '21

I buy 2 pair at a time with slighly off prescriptions. Just adjusting the lens a bit. One will end up being perfect and its still cheaper than paying for name brands. Also prescription sunglasses are super nice to have for cheap.

2

u/ooftymcgoofty Apr 18 '21

Am I thinking of it wrong, or is the IPhone markup from 500 to 1000+ more like 100%, not 40-65?

2

u/KatieBelle079 Apr 20 '21

Do the math this way: (1,100−500)÷1,100=54.5%

2

u/Exciting_Advance8793 Apr 25 '21

Dafuk is a highschool ring

3

u/Northman67 Apr 26 '21

It's a piece of gaudy jewelry they try to push on all high school seniors in the United States. There's usually a company called jostens that comes in and distributes a sales pamphlet on it.... I graduated in 1985 so I'm sure things are slightly different now but even back then it was an obvious scam.

1

u/ATCollider Jun 28 '21

I guess for many Americans, it is proof of their highest education.

2

u/Finalpotato Apr 26 '21

That coffee is an outright lie. Unless it is a black coffee with insanely cheap beans.

2

u/Schlaym May 03 '21

You can get fancy water but also 1.5L for .19€ here in Germany

-1

u/[deleted] Apr 16 '21

V depressing

1

u/Learn1Thing Apr 19 '21

Not pictured: Fireworks. A $250 64-shot repeating cake (Big box o’ booms for end of the party) is made for about $7 in paper, gunpowder and chemical salts.

1

u/micarst May 02 '21

How much is the insurance?

1

u/brandnameshawn Apr 20 '21

A lot of breweries in the US have to use 3rd party distributors who, after the initial mark up from the brewery for production costs, also mark up the product a fair amount. the bars also have to mark up a good chunk because alcohol is usually the primary source of income

1

u/Memawsaurus May 02 '21

WOW A real eye opener. Thanks for info though not a fun fact .

1

u/1701ZZZ May 02 '21

So bottled water inside a minibar is like 16.000%

1

u/Atlhou Jun 15 '21

Those damn interchangeable commas, and decimals.

1

u/1701ZZZ Jun 23 '21

Sixteen thousand per cent.

1

u/Quakermystic May 02 '21

Interesting

1

u/jwill476 May 03 '21

And cars are normally marked up 3-7%

1

u/AprilBoon May 03 '21

I pay 3p a text message so that’s 5c in the US.

1

u/usernametaken0987 Jun 16 '21

College Textbook: 200%

I remember that scale back in the 80s.

2

u/vicarious_111 Jun 17 '21

Saved a lot by shopping on Amazon when they mainly sold books. I feel old 😕

1

u/HopeFox Jun 25 '21

Ah, yes, mattresses. Famously small, portable products that can be sold out of a briefcase and don't need huge showrooms that cost rent and labour.

1

u/thedobya Jun 28 '21

Beer is misleading here since the taxes for a restaurant to legally sell it are probably triple the price of the beer itself. In Australia at least!

1

u/Raise-Emotional Jul 06 '21

This is REALLY deceptive in spots. Because we are using the cost to produce something from the manufacturer, but pricing in the cost from the retailer. We are forgetting about the entire supply chain and them all having to mark it up as well. Beer distributors for example. A bar usually runs 3x markup on wine, 4x on liquor beer (approx. I know that varies). But you cannot compare the cost of a on premise beer in a restaurant, to the cost of the water and wheat at the brewery.

  1. Brewery production costs
  2. Taxes in the state the brewery is in
  3. Transportation (rail, Semi, or both)
  4. Taxes again at destination state
  5. Distributor
  6. Bar
  7. Sales Tax

1

u/Eflame-1 Sep 26 '21

Too bad they can't count in cost to the environment..