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Will Coca-Cola (NYSE: KO ) ever put out SodaStream (Nasdaq: SODA ) syrups?
It's a question that I've heard more than once. The answer is easy: No way! Coca-Cola would never upset its bottlers and consumer-facing retail partners by marketing its secret sauce directly to soda sippers. It would also be validating SodaStream as a model, and that would be disastrous on many different levels.
Even if Coca-Cola were to offer its syrup on its own -- since there wouldn't be much of a reason to go through SodaStream the way Kraft (NYSE: KFT ) will this summer when it puts out SodaStream-partnered Country Time and Crystal Light flavors -- SodaStream would make a killing on carbonator refills alone.
However, Coca-Cola is probably lending SodaStream a hand with the growing popularity of its Coca-Cola Freestyle machine -- the Coke king just doesn't know it.
Coca-Cola Freestyle is a self-serve soda fountain solution that allows consumers to mix their own flavor combinations. There are more than 100 flavors available, all dispensed from the same nozzle. Raspberry Diet Coke? Cherry Sprite? Dasani with peach? These are just some of the flavor offerings that one may never find on store shelves.
How can this backfire on Coca-Cola? Well, the machine was hard to find when it was introduced three years ago. It went from theme parks to high-end movie theaters to gourmet burger joints. However, the machine gained even more momentum when Burger King began testing them out at select locations. As part of the company's recent makeover (which includes ripping off McDonald's (NYSE: MCD ) in some cases and outdoing the Golden Arches in others), Burger King is now encouraging its franchisees to order the high-tech beverage dispenser.
We live in a copycat world. If Burger King -- which recently slipped to third in the burger war -- begins to gain traction partly on the success of Coca-Cola Freestyle, you can be sure that McDonald's will have to pay attention.
However, what will it mean if folks come to expect exotic flavors they can't find in bottles or cans? How many "aha" moments will consumers have as first-time mixologists at a Freestyle machine, realizing that it would be pretty cool to invest in a simple beverage system that allows them to make and mix their own carbonated soft drinks at home?
You're awakening a sleeping monster, Coca-Cola. You just don't know it yet.
Drink up
SodaStream is one of the many dynamic recommendations made to Rule Breakers subscribers over the years, but now is a great time to discover the next Rule-Breaking multibagger that the newsletter has unearthed. It's a free report. Want it? Get it.
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Report this Comment On April 24, 2012, at 3:51 PM, campagnj wrote:
Ah, I think the in store machine's variety adds value that the typical user won't get at home.
Newsflash: Commercial ovens available to the public! Yet we still go out to eat twice a week.
Selling the machine isn't a win, it's the refills that make the money. And I don't know how user friendly SodaStream's machines are, but it still leaves me setting up and cleaning up. That alone is worth a trip to Mickey D's.
Report this Comment On May 03, 2012, at 7:09 PM, KingOfPizza wrote:
The primary reason consumers choose to do things for themselves at home is to save money. The soda market is flooded with dozens (if not hundreds) of choices at low prices. I don't need the customization.
I bought a food dehydrator so I can make my own high quality beef jerky. Beef jerky in grocery stores is roughly $1/oz. I can make a whole pound for about $4. One 5 pound batch saves me about $60 and I only spend an hour making it and cleaning up. It's worth the effort.
I won't buy a soda stream machine because it's not worth the effort. I can catch a sale and get over 5 gallons of name-brand soda for $10. How much would it cost to use soda stream? Not that much less, plus you have the aforementioned set up and clean up issues.
Report this Comment On May 05, 2012, at 4:32 PM, fballstudz wrote:
Using a Soda Stream machine requires almost no effort. You fill the liter bottle with water, screw onto your CO2 machine, and press button to carbonate. Electronic versions should be available shortly for those whom pressing a button repeatedly is too much effort. Then, you unscrew bottle and fill with syrup if you choose. The syrup is measured out using the cap from the syrup itself. Only clean-up is rinsing out the syrup’s cap after using. Hardly any effort involved at all.
As far as cost, bottles are 19.99 for a set of two liter bottles and 14.99 for a set of two ½ liter bottles. You can save 20% by using Bed, Bath & Beyond’s coupons. Bottles have an expiration date, and need to be replaced, typically 2-3 years out.
Syrups run $4.99 (can make 12 liters), $5.99 (can make 12 liters), and $9.99 (can make 6 liters). You can save an additional 20% by using Bed, Bath & Beyond’s coupons.
After initial investment of machine, bottles, and syrups; cost per litter $0.41 (4.99), $0.50 (5.99), & $1.67 (9.99). If you use a 20% coupon to purchase your syrups the cost is: $0.33 (4.99), $0.40 (5.99), & $1.33 (9.99).
Being conscientious of one’s environmental impact does take effort; it IS worth the effort. Not to mention the harmful ingredients you consume with your store bought soda and their impact on your health and health care cost throughout your life. Soda Stream’s regular flavors contain no high fructose corn syrup like Coke and Pepsi, which is increasing being linked to obesity, and their diet flavors contain Splenda, instead of aspartame like Coke and Pepsi which is a known carcinogen.
Calories Carbs Sugar Sodium Caffeine
________________________________________
Pepsi® 100 27g 27g 25mg 25mg
Coca-Cola® 100 27g 27g 35mg 23mg
SodaStream Cola 34 9g 9g 2mg 15mg
7-UP® 100 26g 26g 50mg 0mg
Sprite® 100 26g 26g 45mg 0mg
SodaStream Lemon Lime 36 9g 9g 25mg 0mg
I’m a 34 years old male, and can’t imagine ever not having and using my Soda Stream machine from this point forward. I am also an investor in this company, and it drives me crazy that the older generations running Wall Street and CNBC shows, see this as a fad. From someone in my generation, it shows a complete misunderstanding of what younger consumers care about. Sure, cost is an important factor, but more important to many young consumers are the environmental impact of the products they buy and the impact on their own health and well-being by consuming a purchased product. The only fad is the ignorance of the older generation, that continue to consume a beverage that is slowly poisoning them with BPA contained in those 2 liter bottles of your Coke and Pepsi.
Report this Comment On November 22, 2012, at 9:32 PM, sarenza wrote:
Does anyone remember when soda stream first came out in the early 90s? At that point you were able to get the big 5 gal bottles of Coca-cola and so on. then all of a sudden the machines were gone and you could not get the supplies for them anymore. Just wanted to point this out. I remember as I remember taking the soda stream bottles to school so I did not have to buy drinks.
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