Interesting, they are now allowing consumers to rent to own a brewer in varying payment levels and for as low #$%$99 a month. Quite an interesting game plan to sell brewers. The program is called Keurig Choice. $5.99, $7.99 or $16.99 a month depending on the package you choose. Explorer, Adventure or Pioneer package.
All good stuff gentlemen,just one correction if I may. No additional PEP HomeMade has been produced since the first batch. What is still proliferating through the system is warehoused product from the first batch to fulfill orders from the test stores. Still on the look out for that big order though which indicates national distribution for the product is coming.
You are correct, that is exactly what the CEO said. So here is the issue I have with those statements. Keurig Cold is in the trial phase, and various retailers are able to demonstrate the product and have been for the last...three months or so. The product they are demonstrating is a powdered/capsule. The feedback has been constructive to put it mildly. I'm sure you know where I'm going with this. What's up with the word syrup in the recent GMCR/DPS press release? None of the Pods tested are in that form. Thoughts? You know where I stand and this is some of the feedback they have been given: "If you give me the carbonation in the pod and I can poke a whole in it, why do I need the machine"?
There is no possibility DPS will be permitted on the SODA platform by GMCR, none whatsoever. DPS has been a partner with GMCR even before Coca-Cola. When Coca-Cola took their position with GMCR, they did so in recognition of DPS being a long-term partner with GMCR. DPS has no desperation whatsoever. Not only is their stock price doing very well, but the cash flow from operations is substantially benefitting their business. DPS has been doing quite well and for a very long time. GMCR is not going to sell the K-Cold outside of N. America for at least 2 years and that is contingent upon the amount of success they can find with the product line in N. America. Wherever K-Cold goes, KO and DPS will obviously follow. Honest Tea and Monster will be the next products announced for distribution on the K-Cold platform.
SodaStream, if greater partnership occurs with PEP, will still have the ability to partner with additional beverage firms, but they will not be able to partner with DPS or KO unless K-Cold fails in its quest for adoption. KO, by the nature of their agreement and/or investment in GMCR, does control what brands proliferate their product on the K-Cold platform. With that said it eliminates possibilities of who can participate on the SODA platform. It will work the same way as cell phones. Not going to have iOS, windows and android on a single platform, it's the nature of partnerships. Zico will probably also be on the K-Cold platform, therefore that flavor of CSD on the SodaStream platform will have to come from another coconut water company. And so on and so on.
CEO can say anything he wishes to characterize the business as he feels it is best characterized. I don't promote anything, I simply deliver information & facts. Investors can do whatever they want with those facts. I don't have a downbeat tone, the facts are the facts.
I'm not trying to minimize the importance of CO2, I authored an entire article on the importance of it. But it is not enough to substantiate the business. Think about what you are trying to force acceptance for: "Co2 is NOT "a" profit driver, they are "THE" PROFIT DRIVER!" And you are trying to formulate a notion that the user base has grown double digits because CO2 has grown double digits. 2 problems with this hypothesis sir, 2 major problems. 1. Machine sales have fallen YOY, and this profit driver of CO2 hasn't grown earnings but rather earnings have fallen mightily. This profit driver isn't driving enough profits unfortunately, it just isn't. Therefore it is NOT the PROFIT DRIVER it is A Profit Driver. CO2 is not enough and the logic you are using is faulty no matter which way you look at it, your hypothesis fails.
I'm not scared, I have nothing to fear except to pick the right stage of the stock price to peel off my hedges, which I have been doing since $22 a share. I continue to support the long thesis in SS, but with factual representations of the business, not failed analysis. Long term will be fine imo, but not because of the analysis you are promoting. And you are promoting with faulty reference points, not I. I'm simply trying to deliver the facts to you. What you are offering is that everyone is wrong but you. The analysts, the investors and even SS itself are all wrong. Even with this you are misunderstanding what the long-term sentiment is. Analysts & SS believe long-term the company will grow. Nobody is disputing this fact of the business long term. CO2 is not 80% either it is 90%+, its air on the refill, just air. Only expense is shipping cost.
CO2 is a core part of the business, but it can't support the business because as exampled, usage changes YOY, it will likely never be the same every year as even GMCR experiences with their product line. I have to agree with those who have spoken on the matter before me.
GMCR decline in share price is reasoned differently than what is occurring with SODA's share price. The sentiment toward shares of GMCR surrounded a young, growing business that missed a couple quarterly estimates, but within those quarterly estimates the company still grew both the top-line and bottom-line. Unfortunately, SodaStream has not done either in 2014. SS will witness both earnings and revenue declines and the share price is reacting to this alongside a plethora of competitive sentiment issues. So GMCR's business was still producing growing revenues and earnings thus the inherent value of the business model remained strong even in the face of a falling stock price. Unfortunatley we can't say the same for SS because the inherent value follows the strength of the business model. Additionally, a coffee maker business is a lot more acceptable to the mass investor class than a soda maker business. It just is what it is. Will the business turn around and reflect a more accretive intrinsic value this year? I think it will and hopefully that is what happens. Until then, we deal with the facts at hand. I'm not trying to bust your chops and and hopefully we can have a more constructive dialogue going forward. You make some good points and I think many would benefit from them absent the ridicule and taunting. SS business is a tough one to understand which is also a reason that many investors don't bother, too many nuances and up and down cycles. Today on CNBC they put up a chart on SS and the host showed the decline in the share price. She said this is what losing market share looks like. How do you lose market share to no competitors? So misunderstandings about SS are rampant and vast
SodaStream has recognized that YOY CO2 exchange volume has come via increased usage of the product. They have noted this several times & have slides on their website citing increased usage proliferating greater CO2 sales. In 2014, SodaStream has sold into all Home Depot locations 36 CO2 units, in Germany they have sold into 1,417 DM locations CO2 & CO2 exchange units. Also in the US during the 2nd quarter they filled over 1,500 Wal-Mart stores with 4feet of CO2 spares. The company has added distribution for CO2 in almost all regions of the world during 2014 to the tune of roughly 5,000 new doors. The sell-in represents a strong portion of the CO2 growth. SS would agree 1/2 the growth is from sell-in, 1/2 from sell-out.
Having said that, CO2 growing at a double digit sell-in rate does not constitute the user base growing at a double digit rate as SodaStream recognize. If Molly Simms performs 2 exchanges in 2013 and 4 in 2014, she is helping SodaStream grow CO2 sale just from her usage. But if Johnny Smith goes from 2 CO2 exchanges in 2103 to 1 CO2 exchange in 2014, he is not contributing to CO2 growth. At the same time, SodaStream can offset Johnny's CO2 decline by selling-in to new retailers & replenishing existing retailers
Nobody disagrees with the notion that the CO2 business is a profit driver. We all agree with this aspect of your posts, however, what is not true is that it is a direct correlation to user base growth. The truth is that those who use the SodaStream find themselves using it more & more over the first 24 months which helps increase CO2 sales. Is there user base growth, very possible & more than likely yes, but it simply is not in the double digit percentage range. SS has not seen double digit user base growth since 2012 when they more broadly expanded in the US, Japan & W. Europe. Unfortunately, most systems sold fall into the attrition metric. It is the nature of the product & to some degree failure of marketing or customer attachment
SodaStream expects 2014 to express a 4-5% user base growth in recognition of US market declines, and relatively small market gains in other regions. These other regions such as Asia Pacific and CEMEA do not presently boast sizable enough markets to offset the declines in the US business segment. The bulk of the user base growth will come from Western Europe and Asia-Pacific in 2014, but with respect to slowing growth expectations on a YOY basis which will carry forward in 2015.
Stifel Nicolaus expects 2014 to express a 1-2% user base growth. Longbow expects 2014 to express a 2-3% user base growth. Barclays expects 2014 to express a 3-4% user base growth. Oppenheimer expects 2014 to express 1-2% user base growth. Canaccord expects 2014 to express 2-3% user base growth. Moness Crespi expects 2014 to express user base growth between 3-4%. These are the only firms which carry expectations for user base model assumptions presently. It would behoove investors to consider reading these analysts' reports to clearly understand what constitutes a user and how to account for the attrition rate.
Current user base is estimated to be between 8 and 9mm users worldwide. If we take SodaStream's estimated user base growth for 2014 that would be...more than 10 more users, yes double digits(sorry couldn't help myself, had to throw the good sir a "bone"). So far as percentage based user growth, no, it is not at all likely or even probable that SodaStream has grown the user base by 10% or greater in 2014. Some people don't appreciate the high level of attrition in this product category.
Has nothing to do with sourcing but rather staging. Nobody said anything about sourcing. None of SODA's products are sourced in the WB. If they had resources in that region this wouldn't even be a discussion, the Palestinian people and history wouldn't be plagued with hardship as it has been if they had resources. Don't under analyze the situations as a mere facility orientation problem as it is certainly not the only issue. BDS goes after Intel, HP, Cisco and GE for merely having facilities in Israel Proper the same way they will continue to go after SODA for having existing and new facilities in Israel Proper. Issue is not as simplistic as the closing of a factory nor has it ever been. With that said, BDS hasn't been successful in their agenda anyways as the agenda is and always will be double-sided. Everybody is a winner, think fracking in the United States. Thank you for your comments and dialogue.
Not done with the disputed WB and won't be done with it until late 2015 possibly early 2016. When that happens boycotts won't stop and the negative press will then surround the company's contribution to hundreds of unemployed Palestinian laborers. BDS is not just a small self-funded organization, if it were they wouldn't have operations all over the world. They have what could be argued as the biggest backer outside of the U.S. government funding the organization. It's a strategic operation that allows this financier to dictate terms with Israel and Israel commerce in designated regions. This will not change, not likely ever as it has been present and well-oiled working machine for decades. PEP has already stepped into that pile with this test program and if they choose to take the next step they will undoubtedly have to accept the headwinds as just part of doing business. Plastics used in the PEP pods come right from the WB by the way.
"As a part of this multi-year agreement, Keurig will be the exclusive producer of single-serve, pod-based carbonated DPS brands utilizing fountain syrup in the Keurig Cold platform in the United States and Canada."
As I reported in the past, Keurig was having issues with the Cold pods bursting in climates exceeding 80 degrees. Powder, Zeolites...to Syrups? Not as easy as SodaStream makes it look huh.
Why do I consistently find my name on the tips of your lips? Where is anybody touting a test? I'm sorry you are not recognizing that this is a product launch party for select few individuals, but that all I can offer you is that. I'm not sure how one can suggest I don't understand investing as I've done a substantially better job with SODA in my long/short portfolio than, maybe yourself.
I don't disagree with you that long term investing is about understanding the whole picture. Factually speaking, that is why you read all my free publications Steven, because I have been able to recite the whole picture word for word and speculative comment for speculative comment. Maybe that is why all those participating or planning to participate in the home carbonation industry have hired CLAG at some point in their cyclical venture, because we understand the "whole picture".
As often as you claim to understand how to value a business is just as often as the market has disagreed with you through SODA's continued devaluation. What you might be failing to see Steven is that value follows the trend and until that trend is thought to change by a larger shareholder base, that "assumed understood value" you continue to propose to understand, well it is continually wrong. One day it will be right, but between then and now your time has carried a paper loss while others are profiting from both sides of the stock movement. Maximizing potential!
So while you choose to carry paper losses (hopefully just paper losses) and not profit through carefully hedging your position as you have not done since joining this forum, I have chosen to do differently. I'm sorry you have to resort to name calling Steven, but you should probably recognize that such a mentality and demeanor will likely breed discontent for your participation here and some will also assume you to be less intelligent than you might otherwise be based on this demeanor. Good luck to you Steven and be well!