Establishing that the concept has been around for quite some
time does not help answer the question that many investors have in mind about
Sodastream: ‘Is this a fad, or could this be a disruptor of long established
bottlers such as Coca Cola & Pepsi?’ A few retail investors-oriented
research firms touting Sodastream stock seem inclined to believe that there is
little in the way of an almost inevitable multi-year expansion.
Israeli-headquartered Sodastream International is a leading
enterprise developing, manufacturing and selling home beverage carbonation systems
worldwide. Its business model appeals very much to investors in that it
resembles the razor/razor blades, which made the fortune of companies such as
Gillette, whereby high-margin consumables are sold to repeat customers.
In Sodastream’s case, the carbonation system is sold in the
USA at prices ranging from 69$-200$ depending on design and features, while
refill CO2 canisters after first purchase can be swapped when emptied for new
ones at around $15. The company’s turnover is further fuelled by the
distribution of a great variety of syrups, many of them licensed by well-know
brands, sold in bottles or mono-dose caps to dissolve in carbonated water.
The concept of a home made carbonated drink is know from a
long time, as it originated with G. H. Gilbey, a gin distiller who came up with
the first system in 1903. Although the first commercial systems were already
marketed in the 1920s, the first home systems were sold only in the 1950s and
became very popular in the 1970s and 1980s.
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