- PepsiCo, which purchased SodaStream last year, will introduce flavor concentrates for 10 of its most popular soft drinks, allowing consumers to make the drinks at home, according to Calcalist.
- The flavors will be available first in Norway and Sweden, followed by Germany and France in March 2020.
- There will likely be minimal financial savings for consumers. A liter of homemade soft drinks will cost $0.93 instead of $0.95 for the pre-bottled version.
Although SodaStream is known for making at-home sparkling water without the waste, the Israeli startup began as a way for consumer to make soft drinks at home. However, health trends pushed the focus on sparkling water, and the soda-making aspect of the brand fell by the wayside.
The year before SodaStream was purchased by PepsiCo for $3.2 billion, sales of refill CO2 cartridges — which are used to carbonate water — were up 10% to an all-time record of 8.3 million. Meanwhile, the company’s sales of water flavorings — allowing consumers to make their own soda — were down almost 11% compared to 2016.
Nevertheless, PepsiCo bought the company with its eyes wide open and likely had the intention of trying to introduce its well-known brands into people’s homes from the beginning. After all, it sold some Pepsi and Sierra Mist flavoring packets for the machine on a limited basis in 2015.
Soda sales have been struggling in recent years, and it was undoubtedly a wise move for PepsiCo to purchase a system that allows consumers to enjoy the bubbles while forgoing the sugar. Although healthy alternatives are in demand, according to the Beverage Marketing Corporation, consumers still crave the flavor found in sodas. By introducing flavor concentrates into the market, PepsiCo is complementing the sparkling water machines, giving consumers a choice of how much concentrate they wish to add to the mix and how often.
This new product line will also likely be available for order online and could be another way for PepsiCo to tap into the growing online shopping market, which is forecast to reach $100 billion by 2022 and is driven in large part by beverage sales. Rakuten Intelligence found that online beverage sales grew 38% from 2016 to 2017. And since flavor concentrates come in smaller and lighter bottles, shipping and handling will be less tricky than full-size sodas.
If PepsiCo is successful, this move could change the soda industry in a big way. Already rivals like Coca-Cola are looking to tantalizing add on propositions in e-commerce and storage lockers as options to grow sales in a segment that is driven in large part by impulse purchases. Offering an at-home option could increase the personalization associated with soda and create a brand new way to sell the product.
By using a brand it already owns with a penetration in many homes worldwide, PepsiCo avoids the problems Coca-Cola encountered when it purchased a 10% stake in the former Green Mountain Coffee Roasters in 2014 to develop the Keurig Kold machine into at-home Coke maker. Keurig Kold was a flop, pulled off the market in 2016 after not even a year. It was criticized for its high price tag — especially compared to SodaStream — and large kitchen counter footprint.
PepsiCo’s choice to begin the rollout of its concentrates in Western Europe is logical as the region has historically been SodaStream’s most lucrative. It is also the region where SodaStream has tested out other innovations. In 2017, SodaStream introduced sparkling wine concentrate in the German market. Although it was a limited edition, it created a lot of buzz, as well as a sense of the potential for this carbonation system.
And while these concentrates won’t necessarily save consumers money, PepsiCo can play up the product’s sustainability aspect. After all, consumers won’t have empty plastic bottles to throw away if they buy one small bottle of concentrate instead of several pre-mixed bottles from the store.
Though there is no current known plan for the soft drink concentrates to come to the U.S., it is a safe bet to assume that if sales in Western Europe are favorable, the concentrates will cross the Atlantic in short order and be available stateside.
Even if this idea is not successful, SodaStream is working on other innovations, so new and completely different flavoring ideas are quickly coming to market. Soda Press, an Australian company that makes concentrates for the machine — and is 51% owned by SodaStream — has made a kombucha concentrate, as well as soda concentrates with less sugar and probiotics. These products should be arriving in U.S. stores next year, the company told Food Dive at a trade show last month.