Refreshing the c.s.d category
Jan. 16, 2014
by Monica Watrous
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ORLANDO, FLA. — The key to unlocking growth in the stagnant soft drink category may be customization, said SodaStream International, Ltd.
The Airport City, Israel-based maker of carbonated beverage systems sees the trend of product personalization bubbling up in beverages.
“The fact that you now have complete control over what you drink, how sweet it is, what the ingredients are, how much bubbles, a lot, a little, etc.,” said Yonah Lloyd, chief corporate development and communications officer, during a Jan. 14 presentation at the Integrated Corporate Relations XChange in Orlando. “Control from a perspective of consumer is a pervasive element across all consumer products today. You all have a smartphone. That’s your control center. It’s your information. It’s what you care about, and it’s the same thing in the world of food and beverage.”
Positioned as a cost-effective and better-for-you alternative to store bought soft drinks, SodaStream’s syrup product range contains no high-fructose corn syrup or aspartame.
“Our products generally have two-thirds less sugar, two-thirds less carbohydrates, calories,” Mr. Lloyd said. “And it’s becoming a bigger and bigger deal for consumers.”
To familiarize consumers with the concept of at-home soda-making, SodaStream has built strategic partnerships with such companies as Kraft Foods, Del Monte and Ocean Spray.
“We know that in a lot of markets, including the U.S., what we’re asking consumers to do is very, very new,” Mr. Lloyd said. “Soda-making is not here historically. In fact, we all generally just put powders in water and make the drinks that way. It’s not a liquid-enhancing market, per se. But that’s changing.”
During the first half of the year, SodaStream will introduce syrups with the Campbell Soup Co.’s V8 Splash brand.
“I’m happy to tell you that we’ve actually signed some contracts and we’ll be bringing some more news to you about other brands that we’ll be bringing in, in the coming weeks, including brands that are very popular and some have been around for over 100 years.”
Beyond flavors, SodaStream has teamed with such companies as Samsung, KitchenAid and Whirlpool to add its technology to refrigerators and home appliances.
Adult beverages may also be on tap for the company.
“Sparkling alcoholic beverages of course are quite popular,” Mr. Lloyd said. “We’re already in discussions with several companies. So, it’s something interesting to see coming down the pipe.”
Operational logistics and a tough holiday selling season challenged earnings in the company’s most recent quarter based on preliminary results, but SodaStream remains confident in a bright and bubbly future.
“Home soda that you can make any time pretty much anywhere very soon, how you like it, no doubt is the future of this beverage industry,” Mr. Lloyd said. “And in a few years, people will not be buying soda in stores and then dragging it home to make because it will be so much easier to make it in their homes.”
As for declines in the soft drink category that recently have pressured profit for the Coca-Cola Co. and PepsiCo Inc., SodaStream said it is poised for continued growth.
“Carbonated beverages is a large and, by the way, growing business, despite the fact that some of the cola companies in the U.S. are losing business in the U.S.,” Mr. Lloyd said. “We’re a global company. And on a global scale, bubbles are getting more and more interesting for the consumer.”