Sat, Feb. 14, 10:13 AM
- Craft soda is starting to become a trend to watch closely, according to industry insiders.
- Though still accounting for only ~1% of the total U.S. soda market, major retail chains have increasingly been willing to bet on local craft brands in store aisles.
- The craft craze is old news for the beer industry where coming-of-age millennials buy craft/local beers at a 50% higher rate than brand-loyal older generations. Fading stars such as Budweiser and Bud Light are testament to the impact of the millennial paradigm.
- The craft influence in coffee hasn't been lost on Starbucks which has strategically deployed trucks on college campuses in an effort to win over students.
- Despite the progressive reputation of Starbucks, analysts think new upstarts such as Craft (subscription) and Cups (app) have a shot of gaining influence with the Indie-minded millennial crowd on "customization" and pricing.
- What to watch: An increase in M&A activity in the beverage sector is expected as major companies strategically pick off more local craft brands to incubate.
- Craft beer watch: BUD, OTCPK:SBMRY, TAP, OTCQX:HEINY, SAM, BREW, STZ, OTC:BIBLF, OTCPK:BRBMF.
- Craft coffee watch: GMCR, SBUX, JVA, SJM, KRFT, DNKN, QSR, MCD.
- Craft soda watch: PEP, KO, MNST, COT, DPS, OTCQB:JSDA, REED, SODA, FIZZ.
Aug. 15, 2014, 8:50 AM
- The debate on SodaStream (NASDAQ:SODA) is even livelier after Coca-Cola takes a 16.7% equity stake in Monster Beverage.
- Bulls see the development as increasing the odds of beverage giant such as PepsiCo or Starbucks aligning with SodaStream, while skeptics see the Coca-Cola factor as a market share destroyer for SodaStream.
- Sluggish demand in the U.S. is being addressed by SodaStream with a new marketing message in which health will be highlighted over conservation.
- The company's cash position is also in focus. Free cash flow has weakened considerably over the last year due to investments, notes SA contributor Amal Singh.
- The wildcard in the mix: It's been quiet at Dr. Pepper Snapple (NYSE:DPS) on the M&A front. Some consumer analysts are tipping DPS to be the sleeper pick to acquire SodaStream.
- SODA +3.7% premarket
DPS vs. ETF Alternatives
Dr Pepper Snapple Group Inc manufactures & distributes non-alcoholic beverages in the United States, Canada & Mexico. It products include carbonated soft drinks & non-carbonated beverages such as ready-to-drink teas, juice drinks, mixers & water.
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