Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



1 Reason Starbucks Will Help SodaStream

Starbucks (NASDAQ: SBUX  ) finally began arming its baristas with carbonators across the Sun Belt. Fizzio -- the handcrafted beverages that the java giant has been testing in a handful of stores since last year -- became available at 3,000 Starbucks locations earlier this week, giving customers who may not have a hankering for coffee a reason to give in to the Siren's temptation. 

Starbucks is now making golden ginger ale, spiced root beer, and lemon ale at its stores. The move is naturally leading some to wonder if this will help or hurt SodaStream (NASDAQ: SODA  ) . We know what the market thinks; shares of SodaStream hit a 52-week low yesterday.

We also know what Starbucks thinks. In Monday's press release announcing its push into the $415 billion carbonated-beverage market, the baron of baristas seemed to be calling out SodaStream in pumping up Fizzio's fizzing process: "Unlike existing sodas or at-home carbonation options, the machine carbonates finished beverages, ensuring every ingredient in the beverage receives the same level of carbonation and maximum flavor."

That may very well provide a fresher beverage than even SodaStream, but let's not assume that Starbucks turning into a pop star at thousands of stores will result in the end of the leader in at-home carbonation. I mean, have you seen what Starbucks is charging for these throwback sodas? 

A Fizzio soft drink will set sippers back $2.45 for a tall serving. That's actually more than what Starbucks charges for a traditional tall coffee. In other words, Starbucks is attaching a pretty high value on homemade sodas. That's one thing that will definitely help push SodaStream's value proposition. 

It gets better. For an extra $0.50, a friendly barista will run your ice tea or Starbucks Refresher beverage through the Fizzio machine. Think about that. Starbucks is setting apart its carbonated offerings by charging more for them than its noncarbonated drinks. If the stiff price for a handcrafted root beer doesn't convince you of the value that SodaStream brings to a consumer's home, surely seeing Starbucks itself charging half a buck to fizz up flat drinks has to help.

SodaStream is still early in its stateside adoptions process, but Starbucks will also help on that front. As more people walk into Starbucks and see folks sipping down sodas, they will file that away in their minds for the next time they run into a SodaStream maker at the store. We saw what the premium coffee craze did for Keurig; now SodaStream is in the syrupy sweet spot, as the thirst for handcrafted sodas is about to take off. The market may not see it that way, but Fizzio is the best thing that could happen to SodaStream.

Leaked: This coming consumer device can change everything
Imagine the multibillion-dollar sales potential behind a product that can revolutionize the way the world shops and interacts with its favorite brands every day. Now picture one small, under-the-radar company at the epicenter of this revolution that makes this all possible. And its stock price has nearly an unlimited runway ahead for early, in-the-know investors. To be one of them, and hop aboard this stock before it takes off, just click here.

Read/Post Comments (1) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 25, 2014, at 4:48 PM, pac1investor wrote:

    Though this article boosts my investing spirit to stay long with SODA, all the more my guts tell me I'll be long even more. Sort of like believing in biblical David (amid giants).

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3007249, ~/Articles/ArticleHandler.aspx, 8/30/2015 10:54:40 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

Today's Market

updated 2 days ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
SBUX $55.63 Down -0.32 -0.57%
Starbucks CAPS Rating: ****
SODA $14.91 Up +0.49 +3.40%
SodaStream CAPS Rating: **