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SodaStream International Ltd. Message Board

  • martinitony martinitony Feb 11, 2013 2:49 PM Flag

    Burgh, SODA doesn't sell a brand

    They sell a system.
    Currently, the soda isle at my Kroger Store is about 100 feet long with varieties on both sides and a smaller island in the center. Say about 280 linear feet of shelf space for cans and bottles.

    Now Burgh, imagine if cups of hot coffee and thermoses also were the only way to get your coffee, other than a restaurant or coffee house. The coffee isle at my Kroger is about 60 feet on only one side. Get where I'm going?
    Sodastream is to soda as perculators and drip makers are to coffee. It is a system. Do you see the consequences of SODA succeeding as a disruptor? Truck drivers eliminated, fuel costs eliminated, retail space eliminated....etc.

    Do you really believe that Coke and Pepsi would want that? That Teamsters and even commercial Realtors would want that.? They all lose profits for shipping and storing water.

    And since the cost of supplying the syrups etc is less for this system then selling all that water, the profits to bottlers and Coke and Pepsi would be diminished. Now, do you really think they are going to stand by and go gently that direction?

    I think not.

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    • goldenseth Feb 11, 2013 4:26 PM Flag

      Yes, it is a "breakfast energy drink" aimed at the same market segment dominated by Monster, Red Bull and the like. 16 oz cans. I would not call it a niche product but rather re-purposing and re-marketing of energy drink category. I like the idea, but again I think it is little more than reacting to attempts in the energy drink industry.

    • I agree that SodaStream is a system but they are also a brand.

      I don’t think SODA is nearly as disruptive as you think they are, or are going to be.

      I doubt that SODA ever represents more than 1% of the world CSD market. They’re certainly only a fraction of that now.

      Making coffee at home is fundamentally different than making soda at home. They only way to drink hot coffee is to brew it. It’s been that way forever. They are many other options to drink soda.

      In my opinion, I don’t think consumers care about eliminating trucks, fuel costs, retail space, etc. Not even a little bit. Consumers are all about convenience. The entire grocery store is littered with products that consumers could grow or make at home but they choose not to. Heck they’re buying pre-cooked bacon and sausage! And paying a premium buy for boxes of Nabisco cookies packaged in individual serve bags for lunch boxes instead of buying a bag of cookies and a box of baggies.

      I’ve never cared for the bread maker, waffle maker, juicer argument because I believe SODA is much bigger and has much more staying power than that. However, I have a juicer, a bread maker, a popcorn maker, and a waffle maker but I never use them…I buy branded juice, waffles, bread, and popcorn from the grocery store. For most people it’s just easier to buy it at the grocery store than to make it at home…regardless of the category.

      SODA also has its limits in being a disruptor to KO and PEP because SODA needs to be made at home and served with ice. A very high percentage of KO and PEP’s products are consumed away from home while at work, traveling, dining out, picnicking, boating, at games, etc. SODA will unlikely ever touch any of that extremely large market.

      I never said that KO and PEP would stand by and let SODA diminish their sales or profits. I don’t think SODA has impacted either of them…even in a small way.

      • 2 Replies to theburgh
      • goldenseth Feb 11, 2013 3:43 PM Flag

        Isn't the point of the SODA system so that you don't have to buy those products outside the home but rather make them at home and bring them with you traveling, picknicking, boating, at games etc. Not all SODA products will be served as iced beverages either in the near future with its new product line coming out later this year.

        Small sample: I take my nephew to football practice with my SodaStream bottle. Other kid's mom asks about it. Other kid's mom buys SodaStream and no longer drinks or purchases Diet Coke which she used to drink and buy for each practice while we sit in the bleachers. Magnify that across the country and across the globe. While the impact may be negligable presently, that is exactly how it starts and did so with the single serve coffee industry. Folgers, Maxwell House, et cetera, kind of got lost over the last decade as single-serve coffee became the norm in North America.

        Boating I can tell you already is seeing impact here in South Florida with Boater's world selling the product in their store in Ft. Lauderdale. Columbus Day in Key Biscayne is huge and I know many boating enthusiast who have a SodaStream and that is what they use either preparing for an evening at sea or with them on the seas. Again this is also a small and negligible sample but it can prove to forecast the uses and relevancy of the business.

        Don't get me wrong, presently I do not feel that SodaStream has had any significant impact on KO or PEP, but rather the competitive landscape as a whole wether it be for carbonated or non-carbonated beverages is their biggest problem. That and increased taxation.

      • Good analysis Burgh.

        Sentiment: Strong Buy

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