- PepsiCo Inc. is expanding its distribution partnership with SodaStream International as all three soda giants bet on at-home cold beverage makers to help offset fizzling soda sales.
- SodaStream will sell Pepsi and Sierra Mist caps for its machines on the SodaStream website and about 50 Bed Bath & Beyond Inc. stores in the U.S.
- SodaStream and PepsiCo performed a "small-scale, limited-time test" for retail of Pepsi caps in Florida late last year.
The race is on to find a way to reverse the past decade of slumping soda sales, and the three biggest soda companies have all bet on at-home beverage machines like SodaStream and the upcoming Keurig Kold. The Keurig Kold has partnership agreements with Dr Pepper Snapple Group and Coca-Cola Co., which owns a minority stake in Keurig Green Mountain.
While PepsiCo may be expanding its partnership with SodaStream, the company has not let on that it would be pursuing any type of minority stake deal like Coca-Cola struck with Keurig. PepsiCo is actually looking into "multiple technologies in this area and SodaStream is one of several companies we’re talking to about potential ideas," the company told The Wall Street Journal.
Unlike its chief competition, PepsiCo hasn't been as quick to involve its name or its money in at-home beverage machines. "At an industry conference last December, PepsiCo Chief Executive Indra Nooyi said it is tough to predict if such machines will take hold because it is tough to replicate the taste and users must wait 45 seconds for their drink, instead of the three seconds it takes to open a bottle or can," The Wall Street Journal reported.
The major players involved in these at-home beverage partnerships could all use a win right about now. SodaStream's second quarter revenue fell 27% from the year before, including a 44% drop in the Americas, after reporting similar drops in revenue in previous quarters. Keurig is seeing its own troubles, with sales down 5% last quarter, including a 26% drop in brewer and accessory sales and 1% decrease in pod sales, all of which led Keurig to announce job cuts for 5% of its workforce. There's also no hiding the steady sales declines for soda either, which includes Coca-Cola and PepsiCo, due to consumers' increased avoidance of sugary drinks.
What's interesting about SodaStream's expanded partnership with PepsiCo is that it comes not long after SodaStream announced that it would be changing its image to veer away from soda and align itself with the sparkling water market.