Dive Brief:
- PepsiCo's SodaStream and Bubly sparkling water brand have partnered to create Bubly Drops, the company said in a statement. The new product, which the beverage giant said is intended to be used with its SodaStream sparkling water platform, creates six Bubly flavors by adding a few drops into the liquid.
- Bubly Drops, which will come in Grapefruitbubly, Blackberrybubly, Limebubly, Strawberrybubly, Mangobubly and Cherrybubly, will officially be available starting January 2021.
- The matchup between the two PepsiCo brands gives consumers another way to partake in carbonated water that is increasingly popular among shoppers. Earlier this year, Coca-Cola entered the space with the release of its new sparkling water brand called Aha.
Dive Insight:
While PepsiCo is and will probably always be known for its iconic soda and chips, the beverage and snacking giant has been among the most active in the CPG space in positioning more of its portfolio to be in line with better-for-you trends.
Just two years ago, PepsiCo spent $3.2 billion to purhcase sparkling water maker SodaStream as the beverage giant works to minimize its dependence on sugary drinks. In February 2018, it launched Bubly, its drink with no artificial flavors, calories or sweeteners to take on industry leader LaCroix. So far, it's been a success with more than $100 million in sales recorded in 2019.
Sparkling water has moved from a niche category to a powerhouse beverage, growing at such a fast clip it has outpaced the growth of still water — America’s most popular beverage category by volume since 2016. In 2018, bottled sparkling water volume grew by 26% while the still water category rose 4.2%, according to data from Beverage Marketing reported by CNBC. Euromonitor International predicted the sparking water category is on pace to hit $3.1 billion in sales by 2022.
The fact that PepsiCo and now Coca-Cola have entered the segment speaks volumes about its future growth potential. Even smaller players are getting into the space. Sparkling water brand Spindrift, which flavors its product with real fruit, was able to benefit from the popularity when it raised $29.8 million in a new funding round in March.
In bringing Bubly and SodaStream together, PepsiCo is giving consumers another way to enjoy several of its popular canned sparking water flavors in the comfort of their own home. With people spending less time going out during the pandemic, individuals with a Sodastream looking to cut out sugary drinks are undoubtedly using the machine more frequently. Now, those who like Bubly can make their favorite drink with a few flavoring drops from their kitchen. The drink also is almost certainly cheaper per serving than it would be picking up a pack of Bubly in the store, comes with the fresh component of being just made from the SodaStream and helps reduce use of aluminum cans or plastic bottles.
SodaStream already allows consumers to add flavorings to make their own sodas, ginger ales, lemonades, fruits and energy drinks. By adding Bubly as an option to the system, PepsiCo gives consumers more choice while tapping into the popularity of sparkling drinks. It could also give people on the fence about buying a SodaStream a reason to finally do it.