In The Motley Fool's 2016 year-end Consumer Goods: Industry Focus podcast special, analyst Vincent Shen is joined by contributor Asit Sharma to discuss two trends that have helped SodaStream International Ltd. (NASDAQ:SODA) stock coast to a 150% gain year to date. In this video segment, the pair also touch on recent quarterly results that illustrate the company's surprising rebound.

A full transcript follows the video.

This podcast was recorded on Dec. 19, 2016.

Vincent Shen: Overall, bottled water is on the rise as compared to your sugary carbonated beverages like soda. Sparkling water is only a really small portion of that market -- the bottled water market -- overall. Last year, it saw incredible growth, I think it was 26% in 2015, which is pretty unheard of when you're looking at the beverage industry and something like soda, seeing these declines. I mentioned two things. You take that broader beverage segment tailwind, that SodaStream is enjoying with its pivot.

I also want to combine it with something that you had mentioned to me previously, Asit, when we were talking about some of the supertrends we were seeing in the consumer retail sector. We didn't get to do an episode quite yet on this specific topic -- the fact that people are becoming more and more conscious and aware of the various social, health, and environmental impacts behind their buying decisions. We've been talking a little bit about Keurig Green Mountain. I think there was a huge uproar maybe a year or two ago about the billions of K-Cups that get trashed in single year, how they could circle the Earth something like a dozen times over. When people heard that, were able to visualize that kind of impact, there was definitely a lot of controversy, a lot of consumers basically started to rethink how they view that company and that consumption process. I think the same thing is happening for bottled and sparkling water, to an extent. My wife and I will often go to the store, we'll buy a six-pack or 12-pack of 1 liter bottles each week at the store if we want sparkling water. And even though we recycle those bottles, the idea of being able to use one refillable bottle with your SodaStream and one CO2 cartridge, or refillable cartridge with the SodaStream system that can make 130 liters, or 60 liters even, with the water, becomes much more appealing.

The way that has materialized, ultimately, with the product growth of the segment that they're pivoting to, and plus the fact that that eco-friendly benefit that SodaStream, in the past, really marketed on coming back to the forefront. Revenue was down 27% in 2015, down from their 2013 peak. Operating margins were really taking a hit. They shed five percentage points, shrinking from 7.5% to 2.9%. Then, keep in mind that the way they generate the revenue between the beverage machine sales, but also the cartridge refills, and also their consumables, like the flavors. Their most recent couple quarters have shown a complete reversal, of course, with some, admittedly, much easier comparisons. Machine sales are up 33% year over year for the most recent quarter. That growth is accelerating. Refills are up 9%. I think the refill growth is important, because that's a good proxy for whether or not these devices that they're selling are being used in the market. Otherwise, management has been focused on reducing expenses, making production more efficient, and that has really allowed them to translate some of these top line gains into their bottom line growth, as well. Net income margin, for example, went from 2% last year to 12% this year. Huge, huge expansion there.

I think, for this company, the recovery seems to be under way. I will personally be watching SodaStream closely in 2017. You mentioned, maybe it's gotten a little far ahead of itself. I would agree with you, generally. But I'm curious to see their results from the holiday season, since they have so much momentum going for them now. And, it's a reminder to me that if everyone's beating up on a company, but it has parallels with a strong growing market, it has a well-established brand, and has a pretty sizable network of established users, sometimes it's good to look in the other direction that everyone else seems to be looking, because you can find opportunities like this, with SodaStream up almost 140% year to date.

Asit Sharma: Yeah, be a contrarian. I want to make one last quick point about SodaStream, if you're following it in 2017, I really like that the company focuses on the European market. Many growing companies go straight to Asia because the population growth is there, and the wage growth is there. But Europe, a developed economy, and really a prime market for SodaStream's product. They have a higher social consciousness, which you mentioned, and Vince, yeah, we'll tackle a show after the new year on this environmental and sustainably conscious investing. But this is an advantage for them. They know their markets very well, so go ahead and play in that.