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Charity Profiteering

The Ethos Water Scam?

— March 16, 2009 — Social Good
The stated Ethos Water mission is, “Helping Children to Get Clean Water.” But is it really?

Today I saw Ethos Water in a convenience store and it almost made me want to vomit. The reason is because there was a big sign that said, “Helping Children to Get Clean Water.” Do I hate children? Nope. I hate profiteering.

Here’s the problem: The Ethos Water I saw was $4 and placed next to ‘less altruistic’ $2 bottles of water. With the hope of helping children, people sympathetically purchase the more expensive water.

The premium $4 price creates an impression that a large proportion of money, perhaps even $1, goes to charity.

But guess what? Only 5 cents from each bottle actually goes to charity. Yes, just 5 cents.

Starbucks / Ethos Water has a goal of raising $10 million by 2011. To achieve this goal, they will need to sell 200 million bottles of water, generating ~$600 million in revenue, if we assume a $3 average price. If a bottle of water costs 30 cents to make, that’s more than HALF A BILLION DOLLARS in profit.

To be clear, 5 cents could be a reasonable donation, but not when there is a super premium price that implies a larger contribution; not when the entire premise of the product is based not on the water itself, but on the fact that you are helping children get clean water. 

The way the product is marketed, Starbucks is not selling water, they are selling the promise that the consumer is helping children. 

Essentially, Starbucks is profiteering on charitable sympathy.  Accordingly, I’m inventing the term Charity Profiteering and dedicating it to Ethos Water. 

Starbucks purchased the Ethos Water brand for $8 million in 2005. To date, Ethos Water has only raised $6 million… If Starbucks simply donated the $8 million purchase price, they would have done more for charity. 

As as an extra “FU” to the world, Ethos Water bottles also contain no recycled plastic. This is most shocking because Ethos Water is bottled by PepsiCo who uses recycled plastic in other products. In other words, it was a choice, but despite the high profit margin, Starbucks chose non-recycled plastic.

As part of this article, I have donated $100 to Charity Water, a much better cause. That’s the equivalent of buying 2,000 bottles of Ethos Water, except I’m not creating 2,000 bottles of plastic waste.

Please support this with a comment… like, “I hate Ethos Water.” (for example)