Get Busy With the Fizzy.

Domestic consumption of sparkling water has more than doubled in the past five years. Based on 2011 consumer report, Americans drank 232 million gallons of sparkling water. A recent report from Technavio predicts that global sparkling water market will post an average annual growth rate of 3% from 2016 to 2020.  SodaStream International LTD.,  which makes machines to carbonate tap water at home, is looking to acquire companies and increase marketing in key countries. Chief Executive Officer Daniel Birnbaum said in an interview that with about $100 million of cash and no debt, SodaStream has strong standing and, with aggressive marketing, can successfully target even the most completive markets.

SodaStream appeared on American retail shelves overnight. It is a freshly reinvigorated brand with a 100-year history. SodaStream’s lineage can be traced back to Edwardian Era England, when London distiller Guy Hugh Gilbey invented a device for aerating liquids that his upper-class customers used to carbonate their gin cocktails. The original 1914 patent describes a large device, complete with valves, pistons, and nozzles. Two decades later, the earliest flavored concentrates were introduced, which could be mixed with carbonated water to create instant soda. It wasn’t until 1955 that the home version of the SodaStream became available for the masses.

SodaStream’s willingness to spend reflects how far the company has come since changing strategies in 2014. With weakening sales and income, the company moved away from at-home cola machines that competed in a $260 billion market against giants like Coca Cola and Pepsi. Investors were skeptical to invest in SodaStream’s stocks when they drastically fell in February last year. With the shift to sparkling water, SodaStream’s profits almost quadrupled in 2016. Its U.S.-traded shares increased about 342 % since the recent low. However, the demand for sparkling water is being matched by widespread availability of new channels and delivery systems. Twenty years later, the brand reached its first golden age when it became a familiar fixture in European kitchens with a catchy tagline to match.

References

Benmeleh, Y. (2017). SodaStream on the Hunt for Acquisitions to Keep 340% Rally Going. Retrieved from: https://www.bloomberg.com/news/articles/2017-06-29/sodastream-on-the-hunt-for-acquisitions-to-keep-340-rally-going.

Brooke, Z. (2017). Water Wars: SodaStream’s Offensive into the American Beverage Market. Retrieved from: https://www.ama.org/publications/MarketingNews/Pages/sodastream-ecoshaming-water-wars.aspx.

Bowman, J. (2017). Why SodaStream International Ltd. Stock Gained 12% in April. Retrieved from: https://www.fool.com/investing/2017/05/05/why-sodastream-international-ltd-stock-gained-12-i.aspx.

 

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3 Responses to Get Busy With the Fizzy.

  1. Kimberly says:

    Interesting shift for Soda Stream! I often marvel at the reach of the Coca Cola and Pepsi brands but I guess I didn’t think about the carbonated water market being an open playground for the brand. I know that Coca Cola owns Dasani so perhaps they don’t anticipate expanding to compete? Cool post!

  2. Diane says:

    I think sparkling water claims part of the market that knows how bad soda is for you, but wants that fizzy sensation. I find myself ordering sparkling water when I want a soda. I get the same effect, but without all of the sugar. Soda Stream has provided a wide variety of options while making it easy to consume sparkling beverages without a lot of waste. Great blog.

  3. Atif says:

    You had me at your cool headline!! This was a very interesting read on the industry overall and sparkling water. My first job out of college was with Pepsi as a Marketing Coordinator and the focus that time on Aquafina was unbelievable. The shift is interesting and I didn’t realize how much it caught on in Europe. Great post.

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