That simply is faulty logic and just not true. If you are a one cup , live alone coffee drinker it is not more expensive to use a k cup than make one pot of coffee. To offer people in waiting rooms a quality variety of coffee k cups make sense. It is not about the price of the coffee. You're reaching not to recognize major value benefits of the Keurig.
Any major that would go into direct competition with SODA validates the concept and business plan of SODA. It turns the word Sodastream into sodastream, just like kleenex, honda and frigidaire.
So, such a company would go through a process of determining a price that makes sense to pay, even with a large premium, to avoid contributing goodwill to its future competitor. I don't know that number. My sense is the bigger the potential competitor the bigger that premium.
For example KO or PEP would pay a much bigger premium for SODA than GMCR.
If it cost a billion to compete with SODA perhaps GMCR would pay $2 billion to avoid competing with SODA, but KO or PEP might pay $3 or $4 billion to achieve the same benefit.
I don't know what those numbers actually are, but they do exist and they basically guaranty failure for GMCR if they attempt to enter this business, and last of all, they know it.
Oh, well now we really find out how stupid you are. Filing a trademark cost almost a quarter and they would never spend a quarter without going through with the remaining 1/2 billion dollars, that's for sure. What an idiot.
Burgh, in business nothing is certain until it happens. I've seen millions flushed many times and I don't play in the big leagues. Your statement of certainty suggests to me that you are in education not the real business world.
Here's another problem with single serve soda. You need ice to chill it or the water must be cold when you carbonate. Now, picture yourself in the waiting area where you typically find the Keurig. The Keurig is sitting on top of a small fridge with canned soda inside. Tell me why I want to make a warm soda with the new Keurig soda machine or why the fridge is empty of cold sodas. How much time and money did that auto service department save by buying Keurig's new single serve soda cap, miniature co2 cartridges, ice etc. Oh, then I have to train the customers to put in a co2 cartridge and soda cap, not just a Keurig k-cup. Get real. The concept makes no sense.
What do they sell for? How much competition is a single serve soft drink if it costs, say $1.00? C'mon, think through what you're suggesting.
Of course they can invest hundreds of millions, but really, would they on the hope they can compete in a market already well taken over by SODA? What kind of board of directors would let them risk that kind of dough to go head to head with SODA and then if they succeed force PEP and KO into that market, perhaps buying SODA out and walloping their #$%$?
It makes no financial sense.
Remember, if they can develop single serve, so can SODA, KO, PEP and SBUX.
I don't buy it. I think even the trademarks are bs. Why telegraph all that. There's something else going on here and perhaps it has more to do with SODA than we know.
The thing is is that SODA is the most likely target because :
1. It is first in the home carbonated business
2. Its network of distribution is there as much as GMCR.
3. The ability to deliver CO2 is light years ahead
4. The price would be relatively cheap for entry into what would likely become a very huge market.
These guys would want control and you can only get that by buying out the entire company. GMCR would be in the $15-$20 billion range. SODA probably $2.5-$4 billion
You also have to get into another business that these guys aren't as comfortable with, coffee. That involves agriculture etc.
I don't think KO or PEP would want to go there and enter competition with SBUX, General Foods, Nestle etc.
They will buy out SODA sooner than later, IMO.
Purely speculating here, but my sense is something is going own among all these players. The PEP rumor , the GMCR potential entry and now this KO talk. There will be partnerships, mergers, acquisitions…IMO.
Interesting isn't it? Suppose I'm KO. Would I only talk to GMCR about individual servings of homemade soda? Would I believe that GMCR is the expert on homemade carbonated beverages?
There is no chance that the above is a possibility. Either there has been no discussions or KO has talked with both SODA, GMCR and their own technical crews about the idea.
Over the lifetime of a company to any particular moment:
Total sales for the company equal all they ever produced less the inventory they still have today.
Everything they ever sold is the sell in number, what they sold to their distributers, Walmart, Target …etc.
So, the sell out, everything that the consumer actually bought, for a long period of time is very close to the sell in number.
Over any short period, say 3 months, a quarter, the sell out and sell in may be very different because the retailers and distributors are trying to adjust their inventories to match up as best they can with their projected sales and a bunch of other reasons that their purchases might not match up with their actual sales.
This short term action sometimes will cause some wild fluctuations between feel in numbers and sell out numbers.
Last of all, Sodastream sales are the sell in numbers only, what they sell to the distributers and retailers. So, every so often we might get a goofy number like only a 7% increase in flavors because the retailers were out of whack with the sell out and not keeping adequate inventories. Likewise, the follow up quarter will adjust for that and probably have a very dramatic increase as the retailers get their act together. Voila, great NPD numbers.
Just like they do exit polls for political elections they do actual counts of product sold by counting before and after shelf inventories. This tells us what the public is actually buying, the "sellout" as opposed to what the retailers are buying from the company, the sell in.
explained to the public and why they matter. I would also suspect that there will be some reiterations of buy ratings and targets. Hopefully this type of news will take this out of the control of a few hedges that are shorting.
Until a couple weeks ago my Target, Walmart and Staples had very limited product. About two to three weeks ago that all changed as they loaded up for the season. My sense is that flavors will have a blow out quarter because of the restocking. What is sold off the shelf this quarter won't likely be reorder until its qtr 2014. I can't picture retailers doing a lot of reordering until well into January after returns and exchanges, but who knows.
What is untrue is that flavor sales are falling. They are not.
Maybe to pay for their increase in health insurance premiums or for their kid's Bar Mitzvah or the company Christmas party.
Are you really as stupid as you sound or you just pretending?
Do you really think Cold knows something you don't know? If he (she) did, why waste keystrokes here? With all that knowledge each keystroke should be worth at least $1,000.
If I could make that kind of money per keystroke, I wouldn't be giving you advice, but I can't.
So, here is my advice for you.
Go and find another board to display your stupidity, ignorance and lack of patience.
If you like my advice send me $1.42 (one cent per keystroke, a real value).
The goals are both long term and short term, but all goals must get to the maximum profit. Short term, sell as much as you can with as much margin as you can get. Long term, get as many machines out there as possible at this time of year.
The consumer decision making process is something you and i should leave to SODA management.
My sense is that they figure a lot ofd people that don't know what they want to get as the season moves towards its conclusion are more influenced by bargains as they approach those final decisions.
So, they discount to get those machines out there.
The end consumer at this time of year might not be the buyer, but the gif tee. So no one is worse off for the discount.
My two cents.
The quarter's sales are already done. The retail sold during December on sale will not be replaced, sold by DODA, until Q1 2014. Stop being stupid.
We used to joke about VWs and Japanese cars 40 years ago. Here's a sample. They're going to make a compact Cadillac for folks on welfare.
You can't believe it's possible that in ten, twenty or 30 years it might be that energy conservation laws will eliminate cans and plastic bottles. You just can't imagine that, can you? What then for KO and PEP?
You won't have to be concerned though because they will have, long before that, entered into partnerships with SODA, GMCR and others who are pioneering home making of those products.
Now have a good laugh and remember to tell your grandchildren about these conversations.
I think you overstate, by a lot, the potential competition from GMCR.
Most coffee has always been made by the pot, a very impractical way for an individual to make coffee for one. There was always a need for a single cup brewer and Keurig filled it and they now do almost $5 billion in sales.
SODA has been the filler of a need for home making of soft drinks. It is a disruptor. Single serve home brew is not a disruptor. It really is that simple. Moms are not going to spend substantially more to make an individual serving of soda when they can make an entire bottle in about the same amount of time and at a savings.
Will Keurig succeed? Maybe. Will it really eat into SODA sales and profits, not much if at all.
Most likely GMCR entry and maybe even others' entry will reinforce and confirm the viability of the SODA business plan, a plan that even now all those shorters question.
I think it is KO and PEP shareholders that should begin to be concerned about home soda making by GMCR, not the shareholders of SODA.
Then, of course, there's always a little paranoia. If I was a potential suitor of SODA, I sure would like to see the stock price beaten down real good just before I made my offer.