SodaStream Continues Steady Revival

SodaStream has come a long since since the company’s 2013 Super Bowl ad put them on the map by serving notice to Coca-Cola and Pepsi.  With rapid sales lift and media coverage, SodaStream emerged as a credible threat for soft drink dollars.  Then the market shifted.  Consumers embraced healthier options like coconut water, sparkling water, and cold-pressed juices.  Keurig, Nespresso, and Tassimo challenged them for countertop space in people’s homes.  Aggressive and frequent soft drink promotions challenged their value proposition.  They encountered distribution challenges and never secured shelf space in critical retailers like Loblaws and Sobeys.  It looked like they lost all momentum amidst growing speculation of acquisition talks.  Then SodaStream pivoted their communication and slowly rebounded.

The new communication message focused on sparkling water.  Beverage research revealed that consumers were willing to give up sugar but not carbonation.  SodaStream’s new marketing placed crosshairs squarely on brands like Perrier, San Pellegrino, Nestle Waters, and Sparkling Ice.  Innovation around smaller and more basic machines (i.e. starter kits) enabled penetration growth and co-existence with other countertop appliances.  In their latest financial results, sales revenues rose double digits driven by starter kits across key geographies with direct mention of Canada.  So with a resurgence in their momentum, how can SodaStream maintain growth in a beverage category that continues to see strong double-digit gains?

Broadening SodaStream’s footprint is the first of two critical steps toward long-term growth.  The core of their sustainable success depends on their ability to sell more sparking water makers.  Yet their opportunity to gain distribution may be through leveraging their line of drink mixes.  Their drink mix retails are comparable to bottled sparkling water prices and securing grocery availability improves their accessibility to shoppers.  Consumers that own a SodaStream machine saves time and avoid making a separate trip, instead are afforded more sparking water product alternatives.  Retailers increase their share of consumer spend in addition to improving perceptions around sustainability.  Extending this availability to the grocer’s online platform further increases convenience and presents yet another opportunity to build shopping baskets.  Online shoppers are offered extra product selection while retailers can expand inventory beyond SodaStream drink mixes to include the starter kits and carbonation bottles.

Revisiting their consumer marketing efforts is the second of two critical steps toward building SodaStream’s long-term growth.  Since their infamous banned Super Bowl commercial, SodaStream’s marketing efforts have waned.  Despite unit sales growth, penetration is still the company’s key objective.  TV may not be the best investment to help achieve this objective while it generated significant brand exposure.  Their next step should focus on generating trial through usage demonstration.  The standard tactics would include coupon activity, bonus offers, and  gift-with-purchase.  Less conventional tactics could include sampling SodaStream product within grocery retailers, as a lever to help gain distribution and access to shoppers.  Another option may be to create a pop-up shop to promote SodaStream products, or sell limited-edition designer versions.

With a stabilized business following a few tumultuous years, SodaStream is indeed positioned for growth.  Innovation and their marketing communication has helped to restore success.  To further capitalize on growth potential, the company must reclaim their consumer share of mind and improve accessibility.  This all starts with broadening their retail footprint and elevating their marketing activities.

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