Dive Brief:
- SodaStream’s stock soared by more than 10% after the company posted a 12.9% increase in third quarter revenue to $124.2 million, according to the company’s earnings report Thursday.
- The company’s quarterly net income soared 217.4% to $14.9 million compared to $4.7 million in the year-ago period. Operating income hit a record high of $18.6 million, or 14.9% of revenue, a 243% increase year over year.
- Sales of sparkling water maker starter kits jumped 23% to about 788,000 units, the highest quarterly total in almost two years. CO2 refill sales also increased by 9%, while sales of flavors fell 19%.
Dive Insight:
SodaStream’s about-face to rebrand itself as a sparkling water rather than soda company has so far inspired a major turnaround for the company. In the earnings news release, the company says it now leads the global sparkling water category by volume, in addition to being the leading manufacturer and distributor of at-home sparkling water makers.
Soda companies have been increasingly aligning their portfolios with better-for-you beverages. These often include different types of water — ranging from bottled and sparkling to coconut and aloe — cold-pressed juices, and RTD tea and coffee. But SodaStream didn’t just diversify its portfolio — it completely rebranded its company to shed its “soda” persona as much as possible. That’s except, of course, the reference still contained in the company name.
The company didn’t speculate on why flavor sales were down, or why they declined so much. This doesn’t necessarily suggest a slowdown in adoption or usage because of the sales growth for both the machines themselves and CO2 refill canisters. While that’s positive news, SodaStream may want to find a way to return flavor sales to growth, whether that is through exploring more innovative and exotic flavors, using different premium ingredients or experimenting with new marketing approaches.