For months, Wall Street pundits have fretted over Israeli soda-carbonation product maker SodaStream's (SODA) competition with big established players in the soda market, such as Coca-Cola (KO 0.17%) and PepsiCo (PEP -0.30%). Now it appears that the soda empire has struck back.

Coca-Cola just announced a groundbreaking partnership with Green Mountain Coffee Roasters (GMCR.DL) to buy a 10% stake in Green Mountain for $1.2 billion as part of an agreement to develop new machines to make cold drinks. Shares of Green Mountain skyrocketed 42% after the partnership was announced, while Coca-Cola shares gained 1% and SodaStream shares declined about 4%. This new deal will certainly shake up the home carbonation-products market and is another bump in the road for SodaStream.

However, I wouldn't count SodaStream out just yet, as the company has growth potential and a chance to better establish itself in the market. It is now SodaStream's turn to defend its turf against Coca-Cola.

SodaStream's recent troubles and outlook
SodaStream's stock recently hit some hard times. The stock declined 26% in January due to a poorly received third quarter and a disastrous fourth quarter. Now SodaStream shares are trading at a fresh 52-week low after the Coca-Cola/Green Mountain deal was announced.

Although this deal is certainly not good news for SodaStream, I still believe there is room for growth at the company. It is aggressively pursuing growth strategies in international markets. And although SodaStream products are in just 1% of U.S. homes so far, they're in as many as 25% of the homes in Sweden.The recent stock price declines and lowered analyst expectations do provide easier thresholds for SodaStream to cross, and the Coca-Cola deal may generate some renewed interest from PepsiCo to perhaps partner with SodaStream or reconsider buying the company outright.

The sky's the limit for Coca-Cola and Green Mountain
With that in mind, however, I'd rather put my money on the new game in town: Coca-Cola and Green Mountain. The new deal is fantastic news for Green Mountain, as it has faced increased competition in the single-serve coffee space after two key K-Cup patents expired in 2012. Coca-Cola now has a great opportunity to expand into a new market and tap into additional streams of revenue.

Green Mountain's new machines, when they are introduced, will also hold a key competitive advantage over SodaStream. The Green Mountain machines will not require carbon dioxide carbonation cylinders that must be frequently replaced. According to Bloomberg, "The inconvenience of having to replace the CO2 cylinders in SodaStream's machines has been seen as a barrier to the company's potential."

SodaStream's turn to respond
Overall, the way SodaStream responds to this new development will be pivotal to the company's future. Although SodaStream faces lowered expectations and a possible deal with PepsiCo coming down the road, I'd stick with the companies that now have momentum on their side: Coca-Cola and Green Mountain.