Making soda at home has never been more popular. SodaStream (NASDAQ: SODA) reported healthy growth on Wednesday with sales in its latest quarter up a hearty 29%.
You've seen the ads. You may even own a SodaStream machine. However, you probably don't know everything about the company. Let's go over a few things that may surprise you about the company behind the namesake portable appliance that turns tap water into sparkling soda.
1. SodaStream is 110 years old
Home carbonation may seem like a new trend, but SodaStream itself was founded in 1903. The head of a London-based gin distiller started the company after coming across a way to fizz up drinks just as pharmacy chemists were starting to dream up the top brand sodas that we enjoy today.
SodaStream's original platform was limited to the affluent. It didn't have a viable home carbonation for consumers on the market until the 1950s. However, by the 1970s it had become a hit in the U.K. along with its catchy "get busy with the fizzy" campaign that continues to carry some retro charm.
The appliances were given a stylish makeover over the past decade -- and SodaStream didn't initiate a strong stateside push until just a few years ago -- but SodaStream itself is a centenarian.
2. SodaStream has had ads banned here and abroad
One wouldn't think of home-based soda as a controversial or risque topic, but interesting things happen when you're attacking Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP) in your marketing campaigns.
SodaStream had a commercial banned in the U.K. last year. The spot that has aired stateside featuring soda bottles obliterating whenever a SodaStream machine is activated was deemed disparaging to the big soda makers. Coke and Pepsi aren't singled out in the ad, but the environmental message is pretty blunt. The ad didn't air, but the ban resulted in millions of views on YouTube.
Closer to home, SodaStream's Super Bowl ad, where Coke and Pepsi drivers race to a store entrance, was nixed. It didn't help that the two beverage giants spend a lot of money on Super Bowl ads annually.
SodaStream doesn't mind. It's almost teasing the pros on purpose.
3. SodaStream's home turf makes it a political hot potato
As an Israeli-based company, SodaStream is going to draw attention. However, it's the company's flagship production facility in the disputed West Bank settlement that has attracted protesters who believe that the turf belongs to Palestinians.
It doesn't matter which side of the fence you stand on in this particular debate. Is it an illegal settlement? Should SodaStream get a break because it provides employment to Palestinians? All you need to know is that protests against SodaStream do take place because of where it operates -- and those protests sometimes even take place here.
4. More than 25% of the homes in Sweden have a SodaStream machine
It may seem as if SodaStream is gaining momentum domestically, and a 36% surge in U.S. sales in its latest quarter bears that out. However, SodaStream's market penetration here is just 2%. Compare that with Sweden, where one in every four homes reportedly has a SodaStream soda maker. If there's anything that may keep Coca-Cola or PepsiCo up at night when it comes to SodaStream, it's that the small company can really move the needle if more countries wind up embracing the platform the way the Swedes have.
At a presentation earlier this year, SodaStream revealed that it has better than 10% market penetration in three other countries. The stakes are greater here, where soda consumption per resident is higher than in any other country in the planet, but let's not assume that SodaStream is solely a domestic phenomenon. The U.S. accounted for just 32% of SodaStream's sales this past quarter.
5. Innovation is a big part of the SodaStream story
One would think that SodaStream is a 110-year-old company with a single product, but it's practically a Willy Wonka factory of carbonation. Earlier this year, the first refrigerator that dispenses SodaStream-fueled carbonated water hit the market. The Samsung fridge retails for more than $3,000, but more are coming and they will probably be cheaper. SodaStream also has updated its actual maker, including newer models that eliminate the guesswork of deciding the level of carbonation by manual operation. There are also SodaCaps, which are single-serve flavor capsules that eliminate the need for pouring syrup out of a bottle.
SodaStream is just getting started. It's been in development on everything from a solution for fountain distribution at retail food establishments to a solution that takes place beneath the sink so you can pour carbonated water straight from the tap.
It really is a Wonka factory, though good luck finding the room with the fizzy lifting drinks.