Pepsi Continues Move Away From Sugary Drinks With SodaStream Deal
20 August 2018 - 9:45AM
Dow Jones News
By Saabira Chaudhuri
PepsiCo Inc. has agreed to buy home-carbonation company
SodaStream International Ltd. for $3.2 billion, the latest move by
the cola giant to diversify away from sugary sodas and salty
snacks.
Israel-based SodaStream is a leading maker of countertop
water-carbonation machines. Its devices let people carbonate tap
water and other beverages at home by filling a reusable bottle. The
company has in recent years focused on promoting itself as a maker
of homemade sparkling water instead of a maker of homemade
soda.
Pepsi has previously test-sold its cola with SodaStream machines
in a few dozen stores, at the time describing the experience as a
learning opportunity.
Its deal to buy SodaStream comes as consumer shift away from
sugary soft drinks toward bottled water. More broadly, big brands
are losing shelf space to smaller, trendier entrants and
established players are scrambling for growth.
Under outgoing Chief Executive Indra Nooyi Pepsi has expanded
far beyond its cola roots, into hummus, kombucha and other
healthier products, although results have been mixed. The company
has set a target for sales growth of nutritious products to outpace
the rest of the portfolio by 2025.
Pepsi sells the Aquafina water brand in the U.S. and earlier
this year launched a new brand of sparkling water called Bubly.
Sparkling water has grown far more strongly that the overall
bottled water category, clocking volume growth of 38% last year up
from 35% in 2016 according to data from industry tracker Beverage
Marketing Corp. That compares with 7% growth for the overall
packaged water industry, down from 9% in 2016.
Growth is being driven by a continued move away for carbonated
soft drinks that use sugar or sweeteners and toward healthier,
low-calorie drinks that lack artificial ingredients, say analysts.
By contrast still, bottled water--a much bigger category--has seen
sales slow amid competition from sparkling water, tea, coffee and
other beverages.
Monday, Pepsi said buying SodaStream would give the Israeli
company the muscle it needs to expand geographically while helping
it accelerate its research and development.
The countertop carbonation-machine maker is widely accepted to
have invented the notion of make-it-at-home soda and has roots
going back to 1903. It now has 2,000 employees.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
August 20, 2018 03:30 ET (07:30 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Sodastream International Ltd. - Ordinary Shares (delisted) (NASDAQ:SODA)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Sodastream International Ltd. - Ordinary Shares (delisted) (NASDAQ:SODA)
Historical Stock Chart
Von Jul 2023 bis Jul 2024