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Is is time for Coca-Cola (KO) and PepsiCo (PEP) to take SodaStream (SODA) seriously? The Israeli...

Is is time for Coca-Cola (KO) and PepsiCo (PEP) to take SodaStream (SODA) seriously? The Israeli juggernaut sells more than 10K machines a day with buyers presumably cutting back on their purchases of traditional soda drinks as they fall under the SodaStream consumables umbrella. While an ad campaign in the U.K. was pulled by regulators, the ad's afterlife on YouTube garnered the broad effect the company desired. A Super Bowl commercial planned for 2013 will deliver an even larger audience. Rumor: PepsiCo and Cuisinart may enter the market with machines in response to the SodaStream surge.
Comments (16)
  • LonW
    , contributor
    Comments (153) | Send Message
     
    Passing fad, a few years from now SodaStream will be a distant memory at best.
    5 Dec 2012, 08:23 AM Reply Like
  • interzone826
    , contributor
    Comments (184) | Send Message
     
    Yes, such a passing fad that a corporation as large as Pepsi is rumored to be sniffing around the concept. Your statement makes no sense of this rumor is true. It also makes no sense when one looks at the company's fundamentals.
    5 Dec 2012, 08:50 AM Reply Like
  • martinwoll
    , contributor
    Comments (43) | Send Message
     
    If LonW thinks SODA is a passing fad and be a distant memory, I would ask why he is wasting his time reading and posting comments about the company.
    5 Dec 2012, 10:00 AM Reply Like
  • LonW
    , contributor
    Comments (153) | Send Message
     
    Just my opinion, I have looked at the company and have looked at the product.
    5 Dec 2012, 10:24 AM Reply Like
  • Rhianni32
    , contributor
    Comments (1999) | Send Message
     
    Make fun of LonW all you want but I agree with him.
    Current KO and PEP model: convenient disposal portion sold virtually everywhere already chilled. 3 steps.
    1: Buy, 2: drink, 3: throw away.

     

    Current soda stream model:
    1: buy syrup, 2: buy/replace CO2 3: prepare ahead of time to take with you. 4: find a way to keep it cold where you are going. 5: drink. 6: bring back bottle to wash and reuse.
    Even if its just in your home you have the added steps of buying and keeping stock 2 things, cleaning afterwards

     

    It will have its niche users who then get to choose other company's concentrated syrups already sold for flavoring bottled water. The companies fundamentals may be great but their business model is shaky at best.
    5 Dec 2012, 10:32 AM Reply Like
  • soccerche
    , contributor
    Comments (3) | Send Message
     
    Model: 1) Buy syrup one time month; 2) Buy CO2 one time month at a thousands of convenient locations (here is the hard part: remember to take the empty cylinder with you); 3) but one should have two CO2 containers (as we do with propane for outdoor grills) so you have a backup and are not without CO2 for a day or two; 4) put ice in drink to make it cold, or have more than one bottle and keep them in the fridge after filling so they are cold; 5) drink without lugging cans and bottles from the store, that one later needs to dispose, which consumed vast amounts of energy in production and transport so one can by sugar water with flavoring; 6) and wash your bottle instead of tossing it, recycling it, and buying a new one filed with carbonated sugar water with flavor at the store. If it is a niche market, it is a large and growing one.
    6 Dec 2012, 06:19 AM Reply Like
  • soccerche
    , contributor
    Comments (3) | Send Message
     
    What a narrow attitude! Do you own the product, or have you used the product? I have owned it for a few years now and use it daily. There is a reason it has a 25% market penetration in Sweden, and sizzling international revenue growth. The appeal of the product line is multifaceted: It is green; it is convenient (buy a bottle of syrup and replace a CO2 bottle once per month v. hauling cases of bottles and cans); it produces a good product, from seltzer water to root beer; it allows one to personally modulate carbonation; we are is population addicted to carbonation; and I suppose that Coca Cola was just a fad when it started.
    6 Dec 2012, 06:19 AM Reply Like
  • Thcam1049
    , contributor
    Comments (5) | Send Message
     
    Soda is an interesting concept,however I feel the costs for initial set up is costly. Are we trying to sway the American public this is something we really need, keep us from thinking how much time it will take to recover initial costs? How ectastic can we get from quenching our thirst with exotic flavors? Give our younger generation more credit, cool cold water feels good and they realize it's health benefits just like they understand recycling.
    5 Dec 2012, 08:26 AM Reply Like
  • soccerche
    , contributor
    Comments (3) | Send Message
     
    Like it or not, soda and carbonation is here to stay. It has been many years since soda consumption passed good old H20 in the U.S. I agree with you that water is the better choice, but the market says otherwise.
    6 Dec 2012, 06:18 AM Reply Like
  • Rhianni32
    , contributor
    Comments (1999) | Send Message
     
    Perhaps a better question is if sodastream investors should take them seriously. They have been net flat for two years now.

     

    KO and PEP have nothing to fear. If it becomes profitable they will do it too and outleverage them.
    5 Dec 2012, 10:20 AM Reply Like
  • ronrph
    , contributor
    Comments (52) | Send Message
     
    I bought a soda stream last year or the year before for Christmas. It seemed to be a novelty item as the taste was never as good as the original, not even close (unless you like diet soda because they are all made with aspartame). Anyhow the kids had fun with it and now it just sits in the cupboard, it seems to be a hassle to find a CO2 replacement.

     

    If Pepsi could make their product actually taste like Pepsi it might be worthwhile, but why cannibalize your own product line?
    5 Dec 2012, 10:21 AM Reply Like
  • Rhianni32
    , contributor
    Comments (1999) | Send Message
     
    I am seeing the Sodastream much like the Nintendo Wii.
    When you hear about it you get excited and think of the possibilities at how different it is.
    You get it and about a month later it starts collecting dust.

     

    What I would be curious with is how the long term flavored syrup sales last and how they can compete vs other companies selling syrups for flavoring water.
    i.e. What green mountain is having to deal with in their K-Cups
    5 Dec 2012, 10:24 AM Reply Like
  • Roger Knights
    , contributor
    Comments (4580) | Send Message
     
    It's been selling well for years here, plus sales and outlets are accelerating, and it is well entrenched in Europe. It's possible to use competitors' syrup (I think). I don't think it's a fad, although surely there will be some whose enthusiasm will fade. (Buyers save money over the long term, don't have to haul soda from the store, don't create garbage with used bottles, etc.) One non-fad indicator is that few used machines are showing up on eBay, etc.

     

    Amazon sells the machine at a 20% discount. There are hundreds of reviews. (One review has hundreds of comments.) The "most helpful" review at the top of the list has a good summing up of all the pros and cons. Here's a link to Amazon's page: http://amzn.to/ViEI0x
    5 Dec 2012, 11:53 AM Reply Like
  • leon0623
    , contributor
    Comment (1) | Send Message
     
    Regardless of competition and being a fad, at this price , the stock is an excellent opportunity for growth. I see a high target at $90 and a real target 12 months from now of $75, at which time I sell.

     

    Leon
    5 Dec 2012, 12:28 PM Reply Like
  • ernied3
    , contributor
    Comments (4) | Send Message
     
    Wnile I applaud PEPSICO for being on their toes regarding possible competitors, they forgot we are Americans. We want our products prepared and ready to consume. One need only in grocery stores for the every growing popularity of pre-prepared meals available to realize that the general population will not accept the need to work for ones pleasure.
    5 Dec 2012, 12:42 PM Reply Like
  • martinwoll
    , contributor
    Comments (43) | Send Message
     
    This is some great conversation. Obviously, history will determine whether SODA is a fad. In my opinion, SODA is not looking to replace KO or PEP. Like one said earlier their flavors don't taste like Coke or Pepsi. Yes, will some people buy and stop using it? Of course. You can say that with all kitchen appliances but somehow Williams and Sonoma still sells expensive appliances. If and when, this product takes hold in the USA this stock will soar and the shorts will be squeezed. I take it already the shorts are getting squeezed after the last several weeks. And for all the naysayers, if this company is a bust then so what. That is why we all hold diversified portfolios. I mean even Einhorn is getting squeezed on GMCR
    6 Dec 2012, 08:54 AM Reply Like
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