Dive Brief:
- SodaStream aims to benefit from the disappointing performance of the recently discontinued Keurig Kold by offering Kold owners a free SodaStream sparkling water maker. Keurig has already offered full refunds to all Kold owners.
- Kold owners can take a selfie of themselves with the device and send the photo and all required information to SodaStream. The company will then send back a promotional code that the Kold owner can redeem on SodaStream's website for a free SodaStream Fountain Jet machine (except for shipping and handling costs).
- SodaStream's stock spiked intra-day on Tuesday following the news of Keurig pulling the Kold machine and laying off 130 employees.
Dive Insight:
The promos are limited to the first 2,000 qualified applicants, who must be contiguous USA residents ages 18 or older and must send their photo and required information on or before June 17.
While that means SodaStream will have to eat the costs of up to 2,000 machines, it also means up to 2,000 Jet recipients could be purchasing carbon-dioxide refills and flavored syrups to make the most out of the new device. If SodaStream hooks the consumer, the amount he or she spends on repeated purchases over time could make up for the revenue lost on the free promotional machine. In the latest quarter, both the refills and syrup revenue streams saw increased sales.
The question is whether consumers who bought a Keurig Kold, which primarily makes soda, tea, and related cold beverages, will actually want a sparkling water maker. Sparkling water is a fast-growing category — and what SodaStream CEO Daniel Birnbaum called "the future of beverage."
Since its massive overhaul to rebrand from an at-home soda machine to a sparkling water maker, SodaStream has started reporting revenues on the rebound, though profits remain flat. In addition to the Kold selfie promo, the company also recently announced its entrance into the home "crafted" beer segment with its new Beer Bar device.