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This home soda machine company could give your life the ‘fizz’ you’ve been looking for

April 3, 2019

April 3, 2019

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This home soda machine company could give your life the ‘fizz’ you’ve been looking for

Soft drinks aren’t universally popular these days. There was a time, a few decades ago, when Pepsi and Coca-Cola battled to rule in a hugely lucrative market that drove a wedge between families, partners, and friends – do you prefer Coke or Pepsi?

Soft drinks aren’t universally popular these days. There was a time, a few decades ago, when Pepsi and Coca-Cola battled to rule in a hugely lucrative market that drove a wedge between families, partners, and friends – do you prefer Coke or Pepsi?

In the 21st century, however, soft drinks are less in vogue. They have been identified as the greatest contributor to childhood obesity in our modern diets, beyond that of fast food or confectionary. So many people, particularly parents who are looking to make healthier choices for their children, sought to cut out soft drinks as part of their regular beverage intake. While they clearly haven’t disappeared, alternatives like smoothies and juices have cut into the market share of soft drinks. But the soft drink has not disappeared, because people still like carbonated beverages.

This trend towards a healthier lifestyle was noticed by a company in Israel in the mid 1980s, who acquired a little known English brand called “SodaStream” from Cadbury Schweppes, who had bought it and then done little with it since. 30 years later in 2018, PepsiCo acquired SodaStream for US$3.2 billion, as it looked to broaden its offering of healthy products.

The home soda machine doesn’t just address the obesity epidemic in the developed world though. The model of allowing customers to create their own carbonated drinks in the comfort of their own home eliminated the need for single use packaging like aluminium cans or plastic bottles. Worldwide, 340 billion bottles and cans are not recycled each year, whereas an alternative home soda machine is 75% less greenhouse gas intensive than the production of Cola in plastic bottles, according to analysis by Carbon Trust.

The financial model for soda machines is sound too. While we have never thought of soda as a need, the popularity of SodaStream in response to the move away from soft drinks has proven that there is a strong market for carbonated beverages. The best part about the product, from an investor’s perspective, is the need to replenish it like coffee pods  or toilet paper. Once the initial outlay has been made to purchase the device, there is a constant revenue stream generated through purchasing gas cannisters and flavoured syrups in order to be able to continue using the machine.

Large companies very rarely sit atop the pedestal unchallenged; others constantly emerge to nip at their heels. It should be no different with SodaStream, especially now that one of the traditional challengers to Coca-Cola’s crown in the soft-drink wars, Pepsi, has purchased the company.

Soda King is an Australian business capable of bubbling a monopolised market which has proven to be exceptionally profitable. Having already secured distribution deals with major retailers like Harris Scarf and Big W, they are looking to make waves (or rather bubbles) in the field. In a niche, but rapidly expanding market, Soda King should be one to watch in the consumer goods game.


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