A Slumping SodaStream Stops Fighting Big Soda, Embraces Water

Earlier this year, SodaStream hired Scarlett Johansson to tell us why making your own soda at home is better for your health and better for the world. “Sorry, Coke and Pepsi, she cooed.

Now SodaStream looks like the sorry one. The company’s revenue fell 12.9 percent in the third quarter, with revenue in the Americas tumbling by 41 percent, according to results reported on Wednesday. The stock has been in free fall for months:

For now, the company’s answer is to focus on sparkling water of all flavors rather than aim for the world’s largest soda makers. From now on, SodaStream makes soda—as in club soda, not soda as in pop. “We will never have a cola that is better than Coca-Cola or Pepsi Cola. I will say that loud and clear. That is not where we come from and that’s not where we’re going,” said SodaStream Chief Executive Officer Daniel Birnbaum during an earnings call on Wednesday.


The company is even making a subtle change in the logo to distance itself from soda.  And its slogan, “Set the bubbles free,” is being replaced by the less soda-focused “Water made exciting.”

Still, SodaStream hasn’t given up on soda. The company recently teamed up with PepsiCo to test syrups for SodaStream, including Pepsi Homemade and Sierra Mist Homemade. SodaStream spokeswoman Nirit Hurwitz explained that it can move away from soda while joining up with Pepsi because it’s “a distinction between the company and the brand. The SodaStream brand stands for healthy beverages. [But] the company provides a platform for third parties as well.” That may prove too narrow a distinction for a company with a single product line that embodies its brand.

At any rate, the PepsiCo link, SodaStream’s sinking stock price, and Coca-Cola‘s tie-up with Keurig maker Keurig Green Mountain earlier this year have fueled speculation that SodaStream may be ripe for acquisition. Investors are still looking for details about the partnership with PepsiCo, which is also working with Bevyz, a second at-home soda maker, as it seeks additional ways to reach American consumers.

In an e-mailed statement, PepsiCo didn’t say much: “SodaStream is one of several companies we’re talking to about potential ideas for the future. Our discussions with SodaStream are specifically focused on a small-scale, limited time test scheduled for later this year.”

Jack Russo, an analyst at Edward Jones, said in an e-mail that beverage makers “are seeking all avenues to grow their business and at-home is another of those possibilities, so I would think PepsiCo and Coca-Cola both have incentive to pursue this.”

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