Sodastream

Wikipedia:

SodaStream (NASDAQ: SODA) is the maker of a consumer home carbonation product based on the principles of making a carbonated drink as originally invented by Guy Gilbey in 1903. The device allows users to take ordinary tap water and carbonate it to create soda water (or carbonated water) to drink. Along with the addition of concentrated syrups and flavorings, owners can create carbonated beverages that are similar to the most popular brands of soda and energy drinks available to the general US and international marketplace. It was popular in the 1970s and 1980s when there were a number of brand name syrups available, and, after the company merged with Soda-Club in 1998, it was relaunched with an emphasis on healthier drinks. Soda-Club is currently headquartered in Israel, and has 13 production plants.

Sodastream has been involved in numerous environmental projects, including waste reduction, beach cleanup and reforestation. In the UK (where it was first sold) the SodaStream machine is strongly associated with 1970s/1980s childhood nostalgia.

Product

The SodaStream drinksmaker is a device that forces carbon dioxide gas (stored under pressure in a cylinder) into water, making it fizzy. The product includes a machine, a carbon dioxide cylinder, and one or more reusable beverage bottles (suitable for pressurizing). The bottle, filled with water, is threaded onto the machine, and with a button push, compressed CO from the cylinder is injected, creating carbonated water. Varieties of concentrated syrups are available, to create regular or diet soft drinks by adding a small amount of concentrate to the bottle after carbonation. When a cylinder is empty, it is returned to a supplier and a replacement cylinder is rented.

Different flavours are created by adding fruit-flavored concentrates. During its heyday, several famous brands were available in SodaStream concentrate form including Tizer, Fanta, Sunkist and Irn-Bru. SodaStream also offers diet concentrates sweetened with Splenda, and is used as much for plain sparkling water as for soft drinks.

Milkstream was a variation on the SodaStream for making milkshakes, created by the same company. The ingredients (milk, ice cream and Crusha syrup) were mixed in a tall glass and inserted into the machine, so that the wand extended into the glass to froth up the shake.

History

The forerunner of the machine, the "Apparatus for aerating liquids", was created in 1903 by Guy Hugh Gilbey of the London gin distillers, W & A Gilbey Ltd., and was sold to the upper classes (including the royal household). Flavoured concentrates such as cherry ciderette and sarsaparilla, were introduced in the 1920s, along with commercial carbonation machines, and the first machine for home carbonation of drinks was produced in 1955. The SodaStream was originally sold in the UK, but later spread to other countries, including Australia, New Zealand, and Germany.

SodaStream machines were popular during the 1970s and 1980s in the UK, and are associated with nostalgia for that period. Their slogan, "Get busy with the fizzy", started as an advertising jingle in 1979 and proved so popular that they added it to their logo. They finally dropped it in 1996 after 17 years, however this was reinstated in 2010 along with a new marketing campaign in the UK.

Originally the company operated as a subsidiary of W & A Gilbey, Ltd. In 1985, after various changes of ownership, SodaStream became a wholly owned subsidiary of Cadbury Schweppes, although it operated as an autonomous business within the group. In 1998 SodaStream was bought by Soda-Club, an Israeli company founded in 1991 by Peter Wiseburgh, who from 1978 to 1991 had been Israel's exclusive distributor for SodaStream, creating the world's largest home carbonation systems supplier. In 2003 Soda-Club closed the SodaStream factory in Peterborough, moving the company's gas cylinder refilling and refurbishment department to Germany. Under the ownership of Soda-Club the brand has been relaunched in many markets with new machines, and new flavours, as of 2007 available in the United States, The Netherlands, Belgium, Sweden, Denmark, Finland, Germany, Italy, Norway, Iceland, Australia, New Zealand, Canada and South Africa.

Soda-Club still markets its drinks under the SodaStream brand in some countries, its application for the trademark "soda-club" having been successfully opposed in 1998 by Cantrell & Cochrane (Belfast) Ltd, owner of the trademark "club soda".

In Sweden, some 20% of households own SodaStream machines. In January 2011, the company marked the sale of its millionth soda-maker in Sweden.

2010 Nasdaq IPO

Sodastream International Ltd. went public on the Nasdaq stock exchange in November 2010. The stock offering was jointly led by J.P. Morgan Securities and Deutsche Bank Securities. At the time, the IPO was the eighth largest for an Israeli company on the Nasdaq and during the year 2010 one of the top-performing IPOs generally. To celebrate Sodastream's listing on the Nasdaq, CEO Daniel Birnbaum was invited to ring the exchange's closing bell on 3 November 2010. By August 2011, Sodastream's market cap had risen from $367 million to $1.46 billion.

Production facilities

SodaStream has 13 production facilities worldwide, including one in the Alon Tavor industrial zone near the Israeli city of Afula, that began operation in 2011. Its principal manufacturing facility is located in the West Bank settlement of Mishor Adumim. Another manufacturing facility is began construction in July 2011 near the Lahavim junction in the Negev, just north of Beersheba.

Gas canisters

Pressurized carbon dioxide canisters are leased to consumers for a variety of applications, including paintball, welding, and fire extinguishers, and local vendors will refill them at low cost. Sodastream machines are not compatible with these canisters, nor are local CO vendors generally permitted to refill Sodastream canisters ("carbonators"), which include a proprietary valve designed to defeat refilling. Sodastream does not sell their CO canisters to consumers, but lends them and expressly limits how they can be used in their User License Certificate. These mechanisms effectively elevate the cost of refilling a tank to 10 to 20 times the going market rate.

In Sweden in 1984, carbonic acid supplier Sydbrand, primarily a supplier of fire equipment, was sued successfully by Sodastream for trademark infringement for refilling Sodastream-labelled CO canisters. In 2006, Sodastream lost a suit against the resale of its Alco2jet brand canisters on eBay on the grounds that the canisters were only lent, not sold.

Environmental awareness

According to Sodastream's website, use of home carbonation systems reduces the amount of packaging waste from cans and bottles as well as the amount of pollution caused by the transport of bottled beverages. In 2011 Sodastream partnered with the Israel Union for Environmental Defense to launch a joint initiative promoting waste reduction and an improvement in the quality of tap water. Also in 2011, Sodastream launched a joint campaign together with Erin O'Connor to raise awareness to the effects of plastic bottle waste on the environment. As part of the company's support for Climate Week, in 2012 Sodastream donated £1,000 to a school in Crediton, Devon in the United Kingdom to fund an educational beach cleaning initiative. Sodastream partnered with Trees for the Future in 2012 to launch the Replant Our Planet initiative: for each home beverage carbonation system sold from its Rethink Your Soda product line, Sodastream committed to planting ten trees in Brazil.

Controversy

Sodastream is included in a list of Israeli companies to be boycotted as part of the Boycott, Divestment and Sanctions initiative.

The EU's highest court ruled in 2010 that Sodastream was not entitled to claim a "Made in Israel" exemption from EU customs payments because of the companies' primary manufacturing plant location outside of Israel in the Israeli-occupied territories West Bank settlement of Mishor Adumim.

Sodastream has been criticized for operating their manufacturing facilities on land in the West Bank occupied territories by the Israeli non-governmental organizations Coalition of Women for Peace and Peace Now, as well as other international human rights organizations. These groups have also called for a boycott of Sodastream until they move all of their business facilities out of the occupied territories.