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SodaStream International Ltd. (SODA) Message Board

  • martinitony martinitony Jul 16, 2013 8:58 AM Flag

    GMCR/SODA machine

    I've been thinking about GMCR getting into this business and I can't see it. Creating a machine is not the issue. It's everything else. CO2 facilities, their own soda flavor lines etc...No, not likely. Would Walmart et al carry two types of CO2 canisters? I think not.
    More likely is another partner for SODA. Perhaps making a Keurig soda machine with SODA fittings so they can take advantage of a system already in place. Specialty coffee soda flavors...etc.
    Could be a negotiation on going with GMCR using the registration as a threat to get upper hand in that negotiation.
    My 2 cents.

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    • I agree, this registration maybe a warning shot over the bow don't get in the coffee business and we will stay out of your soda

      • 1 Reply to rlolsen_1999
      • goldenseth@ymail.com goldenseth Jul 16, 2013 10:05 AM Flag

        I like what Martin has to say here, but let's play devil's advocate and further the conversation by assuming they will enter the category. GMCR's basis of operation is manufacturing in the U.S. This is part of the reason they don't turn any profit on the hardware (machine units). All of their profit margin is derived from consumables and some various accessories. So if they are to enter the space, they have to do 2 things from day one: They have to have a full line of flavors to rival that of SODA or their customer will be buying SODA flavors and they have to amass a CO2 distribution as Martin noted. GMCR's choices are limited by their basis of operation, limiting profitability. So if we assume now a partnership with SODA on CO2, this really doesn't seem to have a beneficial impact as you essentially cut the product margin, at least, in half. SODA is already in the coffee business and they will be diving further into that business in the coming years with the Aquabar and like products. It seems unlikely that if GMCR enters the category they will be able to do so successfully, like others said and point to the necessary amount of money it would take to go it alone and their respective balance sheet don't seem to make it a great possibility. But if they do, competition always serves to act as a catalyst for speeding up developments in the category. Maybe SODA launches more products more quickly, adds partners and expands at a more rapid pace. You never know, but I like the speculation here.

 
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