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SodaStream Aims at Coke Again

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SodaStream's (Nasdaq: SODA  ) rolling out the most ambitious -- and most fiscally aggressive -- marketing campaign in its 109-year history.

The SodaStream Effect is a 30-second television commercial in which soda bottles explode whenever one of the company's home-based beverage systems goes into action.

"With SodaStream, you can save 2,000 bottles a year," the ad concludes. "If you love the bubbles, set them free."

In short, the ad is making a stylish argument in favor of SodaStream as an environmental play. It has done this before at the local level with a traveling cage of soda cans and bottles. The company has 30 of these exhibits around the world, demonstrating the thousands of soda containers that a typical family discards in a typical year.

The exhibit gained publicity when Coca-Cola (NYSE: KO  ) sent out a cease and desist notice. It didn't want its products displayed in the exhibit. That was a big mistake. SodaStream had plucked the exhibit bottles from landfills, allowing it to fire back at the world's leading beverage company.

"If Coca-Cola claims to still own these bottles, then they should clean up their own garbage," CEO Dan Birnbaum responded in a press release. "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."


There are no Coca-Cola bottles in the new ad, though it's probably not a coincidence that the first stash of bottles to burst happen to be plastic bottles of dark cola with red labels.

This is ultimately a smart strategy on behalf of SodaStream, and it's going to pay up to get noticed. SodaStream turned to commercial vet Daniel Benmayor to direct the commercial, and the campaign will have a rate card media value of $18 million -- though it will actually cost the company less than that -- during the initial 12-week run.

Is attacking the top dog worth it?

Green Mountain Coffee Roasters (Nasdaq: GMCR  ) never tried to rough up Starbucks (Nasdaq: SBUX  ) in making an argument for its Keurig single-cup brews, and that was before Starbucks became a K-Cup partner.

Then again, while Keurig has cost and convenience advantages over Starbucks, it's not as if the disposable nature of the actual K-Cups can afford Green Mountain the environmentally friendly argument that SodaStream can make with its beverage maker.

SodaStream is clearly doing just fine without the marketing onslaught. Revenue soared by a better-than-expected 49% in its latest quarter. However, it doesn't hurt to spend while the going is good to see if things can get even better.

Drink up
SodaStream's carbonation technology sounds simple, right? Well, this razor-and-blade company offers an intriguing opportunity for growth that may be harder to duplicate than you might think. Our premium report on SodaStream explains the opportunities as well as the risks in the company. The report comes with a year’s worth of updates, so just click here to get started.

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Related Tickers

10/27/2016 10:59 AM
KO $41.94 Down -0.50 -1.18%
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