US/ISRAEL: SodaStream welcomes Coca-Cola Co's home carbonation play
SodaStream saw its share price increase
SodaStream has said The Coca-Cola Co's US$1.25bn investment in an at-home beverage machine maker proves the “enormity of the global opportunity” for its business model.
Shares in SodaStream jumped 7% yesterday after Coca-Cola announced its deal with Green Mountain Coffee Roasters late on Wednesday. The agreement gives Coca-Cola a 10% share of Green Mountain and a ten-year partnership with the forthcoming Keurig Cold machine.
The Keurig Cold will be similar to SodaStream's own carbonation machine, which makes single-serve carbonated beverages using flavour concentrate. SodaStream's products use carbon dioxide to carbonate water, while Green Mountain's is expected to use a chemical reaction.
In a statement to just-drinks today (7 February), SodaStream said Coca-Cola's tie-up is “further recognition that custom carbonation is the future of the at-home carbonated beverage industry”.
It added: “We are proud of the innovation we have brought to the category, and our leadership role is changing the way consumers around the world enjoy carbonated beverages today.
“Yesterday's announcement serves as further validation of the relevance of our unique business model and the enormity of the global opportunity that lies ahead for us.”
A Wells Fargo analyst yesterday said she believes Coca-Cola's latest deal “could help reignite CSD volumes”.
However, analysts at Nomura noted that “the opportunity was small” for Coca-Cola to meaningfully increase sales through the partnership.
Yesterday's shares boost was a shot in the arm for SodaStream, whose stock had declined by about 50% since June.
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