SodaStream Is Taunting Coca-Cola

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SodaStream (Nasdaq: SODA  ) isn't afraid to awaken a sleeping monster.

When Coca-Cola (NYSE: KO  ) sent out a cease and desist letter to SodaStream earlier this month -- arguing that trashed Coke cans and bottles were being used in promotional exhibits showcasing the evils of store-bought beverages -- the small Israeli company that has taken the world by storm with its portable water carbonator didn't back down.

SodaStream embraced the conflict, and over the weekend it took the battle to Coca-Cola's home turf.

SodaStream sent one of its 30 "cage" exhibits -- showing the thousands of cans and bottles of soda that a typical family goes through over the years -- to Atlanta's Centennial Park.

CEO Daniel Birnbaum is milking the most of this moment.

"We stand firm in our intention not to comply," he said in a Friday press release ahead of the Atlanta "cage" fight. "If Coca-Cola claims to still own these bottles, then they should clean up their own garbage. Approximately 1 billion bottles and cans end up in our parks, rivers, oceans and garbage dumps every day worldwide -- almost 400 million in America alone."

"Coke will not silence us with threatening letters," he went on.

Coca-Cola's letter pertained to just one of the SodaStream exhibits in South Africa. Even though there are also PepsiCo (NYSE: PEP  ) products displayed in theses showcases, the world's second-largest soft drink company has been right to stay out of the way.

SodaStream is generating plenty of free publicity here, and it comes at an ideal time for the company. After SodaStream's products hit several stateside retailers over the past two years, Wal-Mart (NYSE: WMT  ) finally began stocking its starter system, carbonators, and flavor syrups just a few weeks ago. One analyst report claims that the product is selling briskly, making it more than likely that SodaStream will continue to deliver market-thumping results.

Coca-Cola is in a no-win situation here. It's setting itself up as a bully, championing the value of its junked cans and bottle. SodaStream is going to sip every last drop out of this stunt while it can.

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The Motley Fool owns shares of SodaStream International, PepsiCo, and Coca-Cola. Motley Fool newsletter services have recommended buying shares of PepsiCo, SodaStream International, and Coca-Cola. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo. Motley Fool newsletter services have recommended creating a diagonal call position in Wal-Mart Stores. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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Related Tickers

10/21/2016 4:00 PM
KO $42.13 Up +0.20 +0.48%
Coca-Cola CAPS Rating: ****
SODA $24.04 Up +0.09 +0.38%
SodaStream CAPS Rating: **
PEP $105.62 Down -0.25 -0.24%
PepsiCo CAPS Rating: ****
WMT $68.34 Down -0.39 -0.57%
Wal-Mart Stores CAPS Rating: ***