SODA - SodaStream

[Green King]

All this talking about Coke just made me suddenly want one.  ;D

[moore_capital54]

I completely disagree with the posters that believe moats have to do with sentimentality and subliminal feelings. The only reason KO has the moat it has is due to the a brand being completely aggressive in it's marketing and distribution strategy over a period where interests rates have only moved in one direction > Down, leading to increase nominal growth and return per dollar spent. In a zero interest rate environment historical moats carry less value as competition can easily lever up and attack such moats. Even more true in today's age of interconnectedness.

 

I believe a company like SodaStream could easily develop the type of brand recognition the posters on this board attribute to coke (mostly due to the regurgitation of Mr. Buffett's words relating to Coke ala a monopoly on gulps etc.) The truth is that since 2008, SODA has sold over 7 million units. That means 7 million households or .1% of global population is now making their own SODA. @ 30mm FCF and $700mm mkt cap, I a paying 20x for a business that has the potential to grow at 30-40% per annum over the next decade, and if I am lucky cannibalize a $500b market.

 

If we have learned anything over the past 5 years it is that in ZIRP all the old lessons must be thrown out. Don't assume that businesses that have built moats in a declining interest rate environment will be able to retain those moats in a rising interest rate environment.  Frankly, non-brand businesses will do best in rising interest rate environments, brands are overrated imho and not worth the premium in this new normal..

[alwaysinvert]

I believe a company like SodaStream could easily develop the type of brand recognition the posters on this board attribute to coke (mostly due to the regurgitation of Mr. Buffett's words relating to Coke ala a monopoly on gulps etc.) The truth is that since 2008, SODA has sold over 7 million units. That means 7 million households or .1% of global population is now making their own SODA. @ 30mm FCF and $700mm mkt cap, I a paying 20x for a business that has the potential to grow at 30-40% per annum over the next decade, and if I am lucky cannibalize a $500b market.

Here in Scandinavia Sodastream has the highest market penetration in the world, if I'm not mistaken. Despite this I hardly see anyone using Sodastreams in their home, which makes me think the chances of it being a novelty gadget is high. Lots of Sodastream machines neatly stacked at the back of the cupboard is not going to make anyone very rich.

[bmichaud]

I completely disagree with the posters that believe moats have to do with sentimentality and subliminal feelings. The only reason KO has the moat it has is due to the a brand being completely aggressive in it's marketing and distribution strategy over a period where interests rates have only moved in one direction > Down, leading to increase nominal growth and return per dollar spent. In a zero interest rate environment historical moats carry less value as competition can easily lever up and attack such moats. Even more true in today's age of interconnectedness.

 

I believe a company like SodaStream could easily develop the type of brand recognition the posters on this board attribute to coke (mostly due to the regurgitation of Mr. Buffett's words relating to Coke ala a monopoly on gulps etc.) The truth is that since 2008, SODA has sold over 7 million units. That means 7 million households or .1% of global population is now making their own SODA. @ 30mm FCF and $700mm mkt cap, I a paying 20x for a business that has the potential to grow at 30-40% per annum over the next decade, and if I am lucky cannibalize a $500b market.

 

If we have learned anything over the past 5 years it is that in ZIRP all the old lessons must be thrown out. Don't assume that businesses that have built moats in a declining interest rate environment will be able to retain those moats in a rising interest rate environment.  Frankly, non-brand businesses will do best in rising interest rate environments, brands are overrated imho and not worth the premium in this new normal..

 

 

Has absolutely nothing to do with regurgitating Buffett isms, and has everything to do with our own personal experience with Coke. Sure there may be new drinks that come along that I will drink in addition to Coke, but thus far in my life, absolutely nothing has been put on the market that replaces the taste of Coke for when i want a cola product. I would bet a significant sum SODA Stream will not be that brand.

 

KO's advertisement budget was $3.25 billion in 2011 (Page 56: http://www.thecoca-colacompany.com/investors/pdfs/form_10K_2011.pdf) .... that is 4.6 times the market cap of SODA. Ala Greenwald, say the replacement cost of KO's brand is 5 times its annual ad budget, or $16.25B - that is 23 times SODA's market cap. More than likely the replacement cost is ten or fifteen times, which makes the numbers just silly. Even with low interest rates I just don't see how the numbers add up to SODA even making a dent in KO's margins.

[SharperDingaan]

This system is in a 'cola' wrapper because it is being pitched to budget conscious Americans - addicted to cola. The fact there is such dissonance, is indicative of how awkward the pitch actually is.

 

The real market is the back-&-beyond convenience store - in emerging markets & the third world. Far from the `control` of corporate, the system will actually be used to carbonate beer versus cola, killing the cola market.

 

If if showed the remotest sign of take off, Coke or Pepsi would instantly buy it out & supress it. No different to big oil.   

[keerthiprasad]

i received one of these as a gift about 1.5yrs ago.  It was a pretty good product.  My wife liked the diverse no-calorie flavors.  However, when we ran out of the original syrups that came with it, we never bought more.  It has sat on our counter for over year untouched.  Its definitely another novelty kitchen gadget for us.  The cost benefit was minimal at best and I never thought about the envirnomental aspect.

 

Based on my experience, I do not see sodastream as a threat to coca-cola today.

[alpha231616967560]

I bought one of these for my Dad, who was interested in losing weight and cutting some sugar out of his diet. They are great for people who like a lot of control over what they consume. With Coke and Pepsi getting an increasingly bad rap from state governments for their piece of responsibility in the "obesity epidemic" in the US, I think that Sodastream is a very attractive alternative. The sugar is a fraction of what it is in the major brands, and my Dad said he liked the flavor just as well, which surprised me.

 

I also bought one myself, and I used it for carbonated water (with a lime squeezed in) and for dinner guests for a period of time, but admittedly is has been sitting on a shelf for many months now, unused.

 

alpha23

 

[CONeal]

i received one of these as a gift about 1.5yrs ago.  It was a pretty good product.  My wife liked the diverse no-calorie flavors.  However, when we ran out of the original syrups that came with it, we never bought more.  It has sat on our counter for over year untouched.  Its definitely another novelty kitchen gadget for us.  The cost benefit was minimal at best and I never thought about the envirnomental aspect.

 

Based on my experience, I do not see sodastream as a threat to coca-cola today.

 

This experience is basically the same thing that happend to Charlie O back in the 80's people liked the product and still have a nostalgic for it today.  But once you run out 1) you have to be able to find the refils which was a problem for Charlie O and 2)  You actually have to want to buy the refills on a regular basis.

 

Nothing is forcing you to buy the refills here, unlike a razor blade or printer. 

[Sportgamma]

A very interesting thread developing here (as is most often the case when Moore gets involved, btw).

 

A few random thoughts:

 

1. I must say that I find the marketing campaign in itself brilliant . Seems to me that no matter how Coke responds, it will play out right for SODA.

2. By comparing SODA to KO, where basically comparing apples and pears. These are totally different business models and target markets.  IMHO, I think the critical success factor for SODA, is if they can become a Nespresso gadget, rather than a toaster. Also regarding size, SODA can perform outstandingly without so much as putting a scratch into KO.

3. I think some people here are talking about Sodastream like its a new thing. My perception of the product is quite nostalgic. My grandfather was using sodastream 20 years ago and still is a frequent user today. I don´t think he uses much of Sodastream syrups though, as you can mix whatever you like (vodka being a personal favorite of his ;) ). Come to think of it, the viral factor of the product could be very strong. Imagine being a kid and being able to carbonate water, you press a button and voila! Your a master of the universe, a mad scientist and you want to show it to all your friends. The same goes for the tree huggers, if you are having a party, why not show everybody how you use your own tap water and herbs from the garden in the drinks. I think the un-automization of the mechanism is a strenght (remember the story about when Betty Crocker found away to make a cake mix where you only had mix it with water and it took the baking factor out of the cake-making?).

4. Despite being exposed to this product for over 20 years, I had never considered the environmental aspect before Moore posted the article. Actually, I could even think of buying it now after realizing the environmental aspect of it. IMO, if SODA wants to capitalize on the eco-factor, they should go all the way. Make organic syrup with natural flavorings etc.

5. Regarding the moat of Coke, I simply do not believe it is all in the recipe. The power of brand lies in the distribution channel. Consider for example Adidas and Nike: because of their power within the distribution chain, its very hard to compete with them. Are their products so superior to those of Under Armour, Puma, Asics etc. Absolutely not. Its their control of the channel. If you are a mainstream sports retail store, you´ll have to have Nike and Adidas because 90% of the best athletes, teams and leagues are dominated by those brands. Thats the moat, the power within the distribution chain and the ability to keep others out of the prime spots.

6. We´re not born with programed taste buds. Recently, I tasted an organic brand of Cola from a company called Whole earth. At first it tasted...well, different. After a few cans, I have acquired a taste for their product, the cola taste seems somehow more natural. What I am trying to say is that our tastes are based on prior experiences. Just like when I eat a pizza, I crave for cola....why? If your used to drinking Coke, why not test yourself by drinking only Pepsi for two months and then change back to Coke.

 

Are there any other similar systems on the market?

[moore_capital54]

A very interesting thread developing here (as is most often the case when Moore gets involved, btw).

 

A few random thoughts:

 

1. I must say that I find the marketing campaign in itself brilliant . Seems to me that no matter how Coke responds, it will play out right for SODA.

2. By comparing SODA to KO, where basically comparing apples and pears. These are totally different business models and target markets.  IMHO, I think the critical success factor for SODA, is if they can become a Nespresso gadget, rather than a toaster. Also regarding size, SODA can perform outstandingly without so much as putting a scratch into KO.

3. I think some people here are talking about Sodastream like its a new thing. My perception of the product is quite nostalgic. My grandfather was using sodastream 20 years ago and still is a frequent user today. I don´t think he uses much of Sodastream syrups though, as you can mix whatever you like (vodka being a personal favorite of his ;) ). Come to think of it, the viral factor of the product could be very strong. Imagine being a kid and being able to carbonate water, you press a button and voila! Your a master of the universe, a mad scientist and you want to show it to all your friends. The same goes for the tree huggers, if you are having a party, why not show everybody how you use your own tap water and herbs from the garden in the drinks. I think the un-automization of the mechanism is a strenght (remember the story about when Betty Crocker found away to make a cake mix where you only had mix it with water and it took the baking factor out of the cake-making?).

4. Despite being exposed to this product for over 20 years, I had never considered the environmental aspect before Moore posted the article. Actually, I could even think of buying it now after realizing the environmental aspect of it. IMO, if SODA wants to capitalize on the eco-factor, they should go all the way. Make organic syrup with natural flavorings etc.

5. Regarding the moat of Coke, I simply do not believe it is all in the recipe. The power of brand lies in the distribution channel. Consider for example Adidas and Nike: because of their power within the distribution chain, its very hard to compete with them. Are their products so superior to those of Under Armour, Puma, Asics etc. Absolutely not. Its their control of the channel. If you are a mainstream sports retail store, you´ll have to have Nike and Adidas because 90% of the best athletes, teams and leagues are dominated by those brands. Thats the moat, the power within the distribution chain and the ability to keep others out of the prime spots.

6. We´re not born with programed taste buds. Recently, I tasted an organic brand of Cola from a company called Whole earth. At first it tasted...well, different. After a few cans, I have acquired a taste for their product, the cola taste seems somehow more natural. What I am trying to say is that our tastes are based on prior experiences. Just like when I eat a pizza, I crave for cola....why? If your used to drinking Coke, why not test yourself by drinking only Pepsi for two months and then change back to Coke.

 

Are there any other similar systems on the market?

 

Fantastic response along the lines of what I was planning.

 

Bmichaud here are some examples of drink brands that came out of nowhere over the past decade demonstrating the KO moat is not as strong as you may think:

 

1) RedBull, I remember being poured my first Red Bull at a resort in Thailand almost a decade ago, never giving it more thought, now RedBull is more profitable, pound for pound, than KO generating in excess of $800mm of FCF to it's owners.

 

2) Vitamin Water - Some may view KO's acquisition as brilliant, I see this case as analogous to FB acquiring instagram, was it really brilliant of KO to acquire Vitamin Water for $4.1B? Or did J. Darius Bikhof prove that KO does not maintain as strong a moat as is often perceived. On the Vitamin Water, note my family consumes a ton of these, we don't allow Soda but we do drink vitamin water, they are about a buck each and I predict the wife and I go through 30 a month. We were drinking Vitamin Water before it was acquired by KO.

 

3) Monster Energy, how hard did KO try with the Rockstar acquisition but yet HANS with their Monster Energy have been able to cannibalize market share. No matter what KO has done they have not been able to break into the energy drink category.

 

There are several other examples. The fact of the matter is, I don't need SODA to outshine KO, all we need is for SODA to capture just 1% of the population (70mm units) and this will be a multi billion dollar business.

 

Year Ended December 31,

(in thousands) 2007 2008 2009 2010 2011 2011

Other financial and operating data:

           

Total number of soda makers sold (unaudited) 730 877 1,057 1,922 2,711 N/A

Total number of CO2 refills sold (unaudited)(1) 7,518 (*) 7,700 (*) 8,506 (*) 10,299 (*) 13,292 N/A

EBITDA(2) € 2,744 € 10,218 € 12,588 € 15,502 € 27,197

 

As long as this trend continues, SODA is an interesting investment. Debating whether the brand has achieved critical mass or network effect at this point, or whether it resonates with the consumer is too premature. I don't think it is going to end up being a toaster.. I think it will end up being more of a Nespresso type product. With that said we are bottoms up investors, and the investment case for SODA is there..

 

 

 

[bmichaud]

I'm not at all saying it can't be a wonderful investment - it's just that the original premise of the thread was SODA finally being able to penetrate KO"s moat, which I don't think it has the capability of doing. Guess it depends on the definition of moat erosion - I view the fact that KO and MCD have maintained superior returns on capital for decades depsite the influx of inumerable competitors demonstrates the impenetrable nature of their brands/moats.

[mranski]

I'm at the low end of the market. I used to drink plain Pellegrino and Perrier carbonated water and now drink President's Choice with lime or lemon squeezed in, primarily due to cost savings. It is about 33 cents per can. Maybe net 27 cents with the returns.

 

My relative has a sodastream, likes it and uses it. He tried to talk me into one, but i balked at the refill cartidge issue and the upfront cost, although it would be cheaper i'm sure. For him, he is a gadget guy and he likes things where he can push buttons and make stuff.  i'm not sure he bought it for the cost savings or environmental factor.

 

 

[hyten1]

moore i hear ya

 

gmcr vs soda

 

i assume you like soda, both are doing similar things within their respective segment. gmcr is more further alone, also it has its issues.

 

hy

[moore_capital54]

I'm not at all saying it can't be a wonderful investment - it's just that the original premise of the thread was SODA finally being able to penetrate KO"s moat, which I don't think it has the capability of doing. Guess it depends on the definition of moat erosion - I view the fact that KO and MCD have maintained superior returns on capital for decades depsite the influx of inumerable competitors demonstrates the impenetrable nature of their brands/moats.

 

KO and MCD are two different models imho. You cannot compare a direct to consumer model to a distribution model. KO is in the distribution business relying on their brand to maintain market share. MCD controls its own distribution, it is a vertically integrated business model. I would be much more worried about KO over the next 50 years than MCD, as MCD can adapt much quicker due to owning its own distribution. The lesson learned from Vitamin Water or Instagram is that paying a huge multiple for a moat is not intelligent over time. It's one thing when you can buy KO in the 80's as Buffett did, but buying KO over the last decade falls under the same category as buying other cult large caps we have discussed here. We have had these discussions before, I simply do not subscribe to that investment process.

 

I also don't think SODA and GMCR are exactly alike, GMCR is in the make your own coffee business and while they have a patented method for making your own coffee they are in a highly saturated market. With that said, the coffee market is more credible than the soda market which is more of a novelty/discretionary segment, but SODA is practically alone in the make your own soda segment which is why it's so interesting. I always like betting on first movers!

 

One more thing.. Someone here posted a Michael Burry commencement speech @ UCLA. I watched it and something he said truly resonated with me, it was along the liens of when you are given an option in life where the potential long-term payout exceeds the short-term risk press that button over and over again. That is how I view buying smaller cap investments as opposed to the larger cult stocks. When you buy those super large caps @ 20-30x fcf you are essentially taking long-term risk in exchange for short-term security, that is not asymmetric. We like asymmetric risk/reward scenarios, KO or MCD absolutely do not fall under that category.

 

 

[PlanMaestro]

Fantastic response along the lines of what I was planning.

 

Bmichaud here are some examples of drink brands that came out of nowhere over the past decade demonstrating the KO moat is not as strong as you may think:

 

1) RedBull, I remember being poured my first Red Bull at a resort in Thailand almost a decade ago, never giving it more thought, now RedBull is more profitable, pound for pound, than KO generating in excess of $800mm of FCF to it's owners.

 

2) Vitamin Water - Some may view KO's acquisition as brilliant, I see this case as analogous to FB acquiring instagram, was it really brilliant of KO to acquire Vitamin Water for $4.1B? Or did J. Darius Bikhof prove that KO does not maintain as strong a moat as is often perceived. On the Vitamin Water, note my family consumes a ton of these, we don't allow Soda but we do drink vitamin water, they are about a buck each and I predict the wife and I go through 30 a month. We were drinking Vitamin Water before it was acquired by KO.

 

3) Monster Energy, how hard did KO try with the Rockstar acquisition but yet HANS with their Monster Energy have been able to cannibalize market share. No matter what KO has done they have not been able to break into the energy drink category.

 

Not easy to keep a moat these days. From an interview I did a couple of years ago:

 

JA: Assuming you were offered a fair price, if you had to choose one stock to buy for the next 30 years, which business would it be and why?

 

PM: The Buffett question... To tell you the truth I am very skeptical of moat investing going forward so I do not pay fair price for any stock.

 

I just reference Bill Ruane’s pick in the ‘90s: Eastman Kodak (EK). Or Buffet’s pick in the ‘80s: The Washington Post (WPO). Five years ago I probably would have said eBay (EBAY). Fifteen years ago maybe Dell (DELL) or Microsoft (MSFT).

 

Even a great business like Coca-Cola (KO) is under threat: noncarbonated is gaining share, PepsiCo (PEP) as a group is gaining share, Wal-Mart (WMT) and retailers in general are increasing their power, and private labels and low price copycats are also gaining share in developing countries.

 

The competitive forces are just too strong.

 

There is a recent study by Deloitte: the Shift Index. The only industries that are defending themselves are regulated, where there is some control of the level of competition and innovation. Where are Buffett and Berkowitz investing recently? HMOs, railroads, utilities, defense, insurance, and banking for the most part.

 

But my concern with most of these industries is that you need good capital allocation for the excess cash flow. I prefer situations where I do not depend on smart management, especially on a 30-year timeframe.

 

I recommend reading Richard Foster and Sarah Kaplan’s book Creative Destruction that shows the performance of long-term survivors. From 1917 to 1987, only two survivors beat the 7.5% stock market—General Electric (GE) and Kodak (EK)—and a large part of the rest has perished.

 

JA: Very interesting answer. I think it’s important to recognize that almost no business can survive for a long period without good management. From my vantage point, the “ham sandwich” business doesn’t really exist – even Coke almost killed itself more than once due to bad management.

 

PM: I am still scratching my head over the $4 billion Glaceau acquisition at the top of the market. Maybe someday someone will explain to me what vitaminwater® is.

 

JA: What do you believe has changed in the world that will pierce the strength of moats going forward? How has competition accelerated?

PM: You might regret asking that of a former management consultant. I should probably answer with the overused “Happy families are all alike; every unhappy family is unhappy in its own way” but instead I will recommend Unstoppable by Chris Zook. I would not buy the book, but if you can borrow it or read the introduction at amazon.com it makes some nice points.

 

By the way, I am not saying that I do not believe in good businesses. In turnarounds, a good business can pardon many sins. My point is that it is getting more difficult to detect who will still be king of the hill after a 30-year period on a consistent basis. I much rather buy very cheap.

[AAOI]

"I also don't think SODA and GMCR are exactly alike, GMCR is in the make your own coffee business and while they have a patented method for making your own coffee they are in a highly saturated market. With that said, the coffee market is more credible than the soda market which is more of a novelty/discretionary segment, but SODA is practically alone in the make your own soda segment which is why it's so interesting. I always like betting on first movers!

 

Take a look at Primo Water (PMRW), its quite interesting and is in the process of launching a competitor to SODA called Flavorstation. It's essentially broken IPO that besides being dirt cheap, owns a high quality water businesses (refill and exchange) they bought from Cargill. Water businesses are at an operational inflection point and my initial impression is that Flavorstation could emerge as a worthy adversary.

 

Still doing the work on it, but I would note that the company appears to have the management, requisite relationships, and distribution potential to give a good go at it. With SODA's marketing spend being what it will be over the next couple of years perhaps a rising tide will lift all boats. That, and at a mid single digit multiple to normalized earnings your not paying for any of it as PMRW could be double or more based on a rerate of the core water businesses alone (which given the operating momentum, seems likely) - so you get a massive call option on the success of Flavorstation for free. Anyhow, worth checking out.

 

[moore_capital54]

"I also don't think SODA and GMCR are exactly alike, GMCR is in the make your own coffee business and while they have a patented method for making your own coffee they are in a highly saturated market. With that said, the coffee market is more credible than the soda market which is more of a novelty/discretionary segment, but SODA is practically alone in the make your own soda segment which is why it's so interesting. I always like betting on first movers!

 

Take a look at Primo Water (PMRW), its quite interesting and is in the process of launching a competitor to SODA called Flavorstation. It's essentially broken IPO that besides being dirt cheap, owns a high quality water businesses (refill and exchange) they bought from Cargill. Water businesses are at an operational inflection point and my initial impression is that Flavorstation could emerge as a worthy adversary.

 

Still doing the work on it, but I would note that the company appears to have the management, requisite relationships, and distribution potential to give a good go at it. With SODA's marketing spend being what it will be over the next couple of years perhaps a rising tide will lift all boats. That, and at a mid single digit multiple to normalized earnings your not paying for any of it as PMRW could be double or more based on a rerate of the core water businesses alone (which given the operating momentum, seems likely) - so you get a massive call option on the success of Flavorstation for free. Anyhow, worth checking out.

 

PMRW is an interest cigar butt, but I don't like the debt situation there.. That being said I could see it feed off a SODA frenzy should one ensue... CFO has been buying shares as well.

 

 

[AAOI]

I wouldn't quite classify it as a cigar butt as the characteristics of the refill business are masked by historical losses on dispensors (which I believe should cease going forward given recent price increases) and the costs associated with ramping up flavor station. The refill business is stable, high margin, highly predictable business with recurring revenues so its definitely not a bad business and obviously your attracted to the economics and growth potential of Flavorstation's model so I would actually characterize it as a decent if not good business with a non-negligable chance at becoming great if Flavorstation takes off. I'm pretty sure the PMV of Primo is substantially higher than what is implied by the share price. Something to think about/look into. As an aside, my hunch is that Billy prim's long term plan here could be to build it to a certain scale in order to eventually sell it to SODA, much like he did previously with his last company Blue Rhino (which he sold to Ferrel Gas for ~$340m).   

 

I hear you on the debt but that's also I think a big part of why it's mis-priced as the optics look much worse than reality if I'm reading things correctly. I'm still doing the work and getting to know the business (I don't own it) but it would seem the combination of (1) the stability of the core business, (2) improving operating performance across all segments, and (3) some decent financial flexibility given what remains on their revolver and the recent refinancing, should make the leverage more than manageable. The fact that Billy Prim participated in the refinancing and has been buying stock it seems he agrees. Lastly, I would keep in mind that the water business was basically unaffected by the great recession (as is intuitive once you understand it) and that odds are the business should continue to steadily grow (as volumes steadily grow) regardless of general economic turmoil. No small potatoes in this environment.

 

 

[StevieY]

There is nothing to say that SODA can't be a successful investment, however I think we'd all agree that COKE or PEPSI would allow us to sleep better at night. The Sodastream machine will predictable end up like the sandwich maker, crock pot, egg boiler, etc. Nothing against the product or the concept, but it will be another seldom used kitchen device in most homes. Sure some households will use it daily but with the attack on soft drinks itself due to people's ever increasing health conscious decisions, this makes it risky to me. Two other points for me here....the first is that many consumers simply prefer drinking a brand name beverage of any kind...call it ego or whatever but society has dictated to us that a person with a can of Coke in their hand is a little "cooler" than the person who just made their own. It's a simple fact...not saying it's proper, just saying it exists. Secondly, where SODA will never be able to compete is in the impulse buying sector at retail outlets...convenience stores, restaurants, movie theatres, etc. Consumers purchasing a beverage want the real thing (no pun intended!). I don't know what that leaves for SODA. To me, I would feel more comfortable shorting SODA, but not I will remain the most comfortable avoiding it altogether.

[rkbabang]

Upon first reading this discussion I was thinking that this would be a great product just to use to make carbonated water that I could put my own lemon/lime/or other fruit juice into with no sugar or artificial sweetener.  But then I started thinking that I can do that now already by simply buying a bottle of carbonated water and adding what I want to it.  I see no advantage to the appliance.  Bottles of carbonated water aren't that expensive and buying syrups of any type isn't going to happen in my house.  I don't see this catching on.  I know I'm generalizing here but I think the type of people that make their own food/beverages at home are usually health conscious types.  The type of consumer who drinks lots of soda are usually concerned less about health and more about convenience.  It is certainly more convenient to simply buy something already made.  The reason K-cups caught on is that they made drinking coffee at home more convenient, not less.

[tooskinneejs]

I saw one of these being demonstrated in my local Costco store.  I sampled the cola flavor, which was fine.  My impression was that using the machine would involve a little too much clean up work after each use to make it worth my while.  I have friends who have, over time, bought bread makers, juicers, etc.; after a few months of heavy use they all start collecting dust.

[ragnarisapirate]

I saw one of these being demonstrated in my local Costco store.  I sampled the cola flavor, which was fine.  My impression was that using the machine would involve a little too much clean up work after each use to make it worth my while.  I have friends who have, over time, bought bread makers, juicers, etc.; after a few months of heavy use they all start collecting dust.

 

I did a bit of scuttlebutt on this today, and, am kind of confused... Not long yet, but, I do see potential for it. I really need to sleep a bit on it.

 

That said, this is what would scare me if I was a long: http://www.primoflavorstation.com/ As was pointed out, they are public as well (though, their numbers look absolutely atrocious): http://finance.yahoo.com/q?s=PRMW They are a cigar but because of share issuance!

 

The difference, is that Flavorstation is just at Lowe's from what I can tell. When I went to one in town, they didn't have it.

 

I went to 4 places that all had Sodastreams.

 

I think that this could turn out to be an Ipod vs Zune or Zen. Sodastream seems to have a product that is more expensive, but, they just seem to have killed everybody at making it "cool" and available everywhere. One other point that should be made about it, is that you can have 12 liters of pop that are stored in an area that is about the size of a single 2 liter of pop... You also have the freedom to have a wide array of drinks without taking up ANY refrigerator space. I would think that this would be a big hit with people in multi housing units where they are pressed for space and have to take their groceries up a few flights of stairs or in an elevator (a la NYC).

 

That said, I don't know that there is a HUGE future for the company in 15 years. The do it yourself soda industry will probably thrive better than this company. Furthermore, the difference between this and the company doing this in the 80s that fizzled out, is that we now have the internet and can order product, rather than have to go to a store for it. Distribution problems are essentially solved (which, I am under the impression is what killed the idea in the past)

 

There is probably a post coming up on this, and I will put a link up when it's done. I want to be perfectly clear: I don't think that this company will hurt KO or PEP, or, that they will come out with their own versions in any way. I wouldn't be surprised if they tried to buy it out and shutter the operation, but, don't put any stock in that idea.

 

Thoughts?

[Parsad]

I saw one of these being demonstrated in my local Costco store.  I sampled the cola flavor, which was fine.  My impression was that using the machine would involve a little too much clean up work after each use to make it worth my while.  I have friends who have, over time, bought bread makers, juicers, etc.; after a few months of heavy use they all start collecting dust.

 

Don't forget slowcookers!  My cousin swore by hers when this slowcooker fad started a couple of years ago.  She cooked with it at least 3-4 days a week...the convenience, tender meats, efficiency and savings were all touted.  It now sits in her cupboard and gets used once every couple of months!  Cheers! 

[keerthiprasad]

I saw one of these being demonstrated in my local Costco store.  I sampled the cola flavor, which was fine.  My impression was that using the machine would involve a little too much clean up work after each use to make it worth my while.  I have friends who have, over time, bought bread makers, juicers, etc.; after a few months of heavy use they all start collecting dust.

 

Don't forget slowcookers!  My cousin swore by hers when this slowcooker fad started a couple of years ago.  She cooked with it at least 3-4 days a week...the convenience, tender meats, efficiency and savings were all touted.  It now sits in her cupboard and gets used once every couple of months!  Cheers!

 

I have a Vita-Mix, not sure if anyone here has one, but it is an awesome kitchen gadget.  I may not be using it regularly in a year or so, but for now I really enjoy it!

[hyten1]

also just want to point out this minor detail

 

the funny thing is the cola industry started out (long time ago) with machine that mix drink for you. back in the olden days you go to a shop, you ask for cola, they mix it right there with a machine

 

how things come around etc.