Image source: SodaStream.
SodaStream (SODA +0.00%) has never shied away from throwing a punch, even if it's not a carbonated fruit punch. The company behind the namesake machine that turns flat water into sparkling beverages is at war with the bottled water industry. It fired the first shot, just as it did when it was heaving shells at Coca-Cola (KO +0.84%) and PepsiCo (PEP 0.99%) in its prime. It's basking in the glow of when its foe strikes back.
SodaStream kicked off its latest marketing campaign -- Shame or Glory -- by aiming at buyers of bottled water. The ad stars Hannah Waddingham and Thor "The Mountain" Bjornsson from Game of Thrones. Waddington recreates her bell-ringing Septa Unella character, following a buyer of bottled water around and chanting "shame" as the bell tolls. Bjornsson pops up near the end of the spot, having already starred in an earlier SodaStream campaign.
As you can probably imagine, the campaign isn't going over too well for those who rely on selling bottled water for a living. The International Bottled Water Association reportedly fired off a cease and desist letter, asking SodaStream to nix the attack. SodaStream, naturally, is milking the publicity. It put out a press release on Wednesday rejecting the gag order. It's a strategy that initially worked a couple of years ago when Coca-Cola and PepsiCo were the targets, so it's not going to back down when butting heads with a much larger corporate entity.
Pop goes the cap gun
SodaStream isn't afraid to rattle cages. It rolled out Super Bowl ads bashing Coca-Cola and PepsiCo, and when the ads were banned by the network -- it happened twice -- it made the most of the opportunity by having the commercials go viral. SodaStream also wheeled out public displays showing the number of bottles and cans that a typical family goes through in a given year, and once again, the soda giants tried to put an end to the campaign.
If there's any company that relishes the aftermath of crossing the line, it's SodaStream. When it was positioning its flagship product as a soda maker, it knew that it was a hard sell to market it on value. SodaStream sodas may be cheaper than Coca-Cola or PepsiCo, but it wasn't always cheaper than store brands given the high cost of soda syrups. Pitching its product on convenience was also a mixed bag. Folks having to lug soda bottles or cans around for store-bought sodas is a hassle, but the soda-creation process and swapping out carbonator tanks are knocks against the platform.
SodaStream's marketing would have had an easier time knocking the health benefits of its soft drinks since they contain a third of the calories, carbs, and sugar found in Coca-Cola's and PepsiCo's non-diet rivals, but the low-hanging fruit has always been to play the environmental card. It worked in competing against soft drink giants, and it's apparently working even better now that sparkling water is SodaStream's primary focus.
SodaStream stock is hot, soaring 126% so far this year. Revenue climbed 13% in its latest quarter, posting double-digit top-line growth every single period in 2016. This may not seem like much of an achievement, but you have to go all the way back to 2013 to find the last time that SodaStream had posted year-over-year growth in the double digits the way it has consistently done this year. Profits are growing even faster, as SodaStream cements its product's status as a "must-own" appliance for drinkers of carbonated water.
SodaStream is making enemies, because it's making friends, and that's something that can help give any business model a leg up on the steamed competition.
