SodaStream's Latest Jab at Coke, Pepsi: They Hate Freedom

www.sodastreamusa.com There's no shortage of people who despise Coca-Cola (KO) and PepsiCo (PEP). Health food buffs oppose the high-fructose corn syrup that's a top ingredient in soft drinks. Parents blame sugary sodas for a spike in childhood obesity. Others wonder about the potential health risks from the artificial sweeteners used in diet sodas. However, their most unlikely foe may be SodaStream (SODA). It might seem odd for the leader of in-home carbonation to be poking at the two beverage giants. If it takes too many shots at their products, won't that eventually upend the consumption of flavored carbonated beverages that SodaStream is championing? SodaStream's clearly not worried about that: It feels that its product is differentiated enough where it can afford to target Coca-Cola and PepsiCo in Super Bowl ads, traveling exhibits, marketing campaigns and now its conference calls. Pop Quiz Still, investors probably didn't expect SodaStream to take a jab at Coke and Pepsi during last week's quarterly results conference call that went beyond the health and wellness arguments that have long been a part of its marketing mantra. However, when SodaStream was asked about Coca-Cola taking a 16 percent stake in Keurig Green Mountain (GMCR), jab they did. Coca-Cola will provide its flavors for Keurig Cold when it hits the market as early as this holiday shopping season. A big part of the theory for Coca-Cola backing the unproven Keurig Cold platform is that the flavor pods will provide consistent carbonation levels so every drink will taste the same. That's a stark contrast from SodaStream, where owners can dictate the carbonation levels. "The argument that the consumer wants exact dosing is a reflection of the trap that those beverage companies are in," SodaStream CEO Dan Birnbaum said. "The consumer does not want exact dosing. The consumer wants to be trusted and empowered to make their beverage the way they want, with the amount of bubbles they want, and the amount of flavor they want. "That's where there is a complete divergence between the way SodaStream thinks and the way the category behaves," he continued. "We empower the consumer with an inexact dosing." In short, Coca-Cola and PepsiCo don't trust their customers to be able to craft their own sodas the way they want. It's easy to see why Coca-Cola and PepsiCo are strict about the dosing. They believe that customers expect the same consistency when they crack open a can, twist open a bottle or pour into a cup at a self-serve fountain. Most brands rely on consistency. However, you have to applaud SodaStream for its moxie. It's turning a strength of Coke and Pepsi into a barrier to freedom of choice. Ad It Up SodaStream has made a career out of razzing the big boys. It had several traveling exhibits that went around the world with cages full of bottles and cans that approximate what an average family of four goes through in a year. Its website promotes how its non-diet sodas have a third of the calories, carbs, sugar and sodium as Coke or Pepsi. Earlier this year, it focused attention on the environmental damage caused by packaged soft drinks with its Secret Continent campaign. SodaStream has also had Super Bowl ads banned in back-to-back years for attacking Coke and Pepsi by name. It's not afraid to take these shots, even if it means that Coca-Cola will spend more for its 16 percent investment in Keurig Green Mountain than it would if it had wanted to buy SodaStream whole. For now the attacks appear to be working best outside of the U.S., where sales popped 20 percent higher in its latest quarter. It was a different story domestically, where sales fell sharply as retailers still had a glut of unsold systems lingering after the holidays. Maybe it's doing too good of a job bashing the cola giants, but SodaStream's showing no signs of letting up anytime soon. More from Rick Aristotle Munarriz
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