SodaStream_Lineup

SodaStream plans new sales pitch as US business loses effervescence

SodaStream says it isn’t winning over enough new customers in the U.S. and reported preliminary sales that fell short of Wall Street expectations.

CEO Daniel Birnbaum said Tuesday that the Israeli company’s U.S. business underperformed in the third quarter because of lower-than-expected demand for its soda makers and flavours. While it successfully established a base of repeat users in the U.S., Birnbaum said SodaStream isn’t attracting new users at the rate the company would like.

SodaStream International said revenue for the third quarter is expected to be about $125 million. That’s down from $144.6 million a year ago, and below the $153.6 million analysts expected, according to FactSet. The company is scheduled to report final results for the period Oct. 29.

Birnbaum said the company has shifted its focus to play up SodaStream’s “health and wellness” benefits.

SodaStream has touted its machines as a cheaper, more environmentally friendly alternative to buying bottled or canned drinks such as Coke and Pepsi. It has been trying to make a splash in the U.S. and advertised in the last two Super Bowls, with the latest commercial featuring actress Scarlett Johansson.

In Canada, the company embarked on a Toronto-focused summer press tour to help build brand awareness. A branded truck made stops at various Toronto locations to demonstrate to passersby how the product works. SodaStream Canada also used the tour as an opportunity to build a customer database. At each stop, people are asked to register to receive recipes, ideas and special offers. Those who sign up are also offered a discount code for making a purchase on the spot.

Depending on the model, SodaStream machines cost between $80 and $130 and are powered by CO2 cartridges, which cost about $30 and need to be replaced after a certain number of uses. Customers who bring back used canisters can get a discount on a refill. 

Though the machines are in just 1% of U.S. homes, the company has noted it’s in as many as 25% of homes in Sweden.

SodaStream’s machines will soon face some formidable competition, however. Keurig Green Mountain, which is known for its single-serve coffee makers, is expected to introduce a machine for cold drinks in the coming months. Earlier this year, Coca-Cola Co. announced it was buying a stake in Keurig and that it would make some of its well-known beverages available for the Keurig Cold.

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