It's Looking a Lot Like a SodaStream Christmas

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The latest Bed Bath & Beyond (NAS: BBBY) circular leaves little doubt about what the home goods retailer feels are SodaStream's (NAS: SODA) chances this holiday season.

The cover features a SodaStream Fizz Soda Maker machine, decked out with a Santa cap aboard a sleigh. Pulling the sleigh are nine SodaStream mix bottles with reindeer antlers on. Cola's leading the way with a Rudolph-red shiny nose.

Bed Bath & Beyond owes a lot of its success over the past year to SodaStream. Sales, earnings, and store-level comps are growing nicely, and being a popular hub for SodaStream's ecosystem must be helping with in-store traffic.

Bed Bath & Beyond enjoyed the Green Mountain Coffee Roasters (NAS: GMCR) craze in previous years, but these days every supermarket and department store has growing shelf space devoted to Keurig K-Cups. SodaStream mixes will undoubtedly follow suit, but only a few retailers are up for exchanging carbonators the way that Bed Bath & Beyond has been since last year. In other words, the retailer knows that it can count on steady repeat business from customers looking to stock up on CO2 and soda concentrate refills.

Thankfully for SodaStream -- and not so thankfully for Bed Bath & Beyond -- there are a lot more distributors onboard this holiday season. Staples (NAS: SPLS) and Target (NYS: TGT) began stocking SodaStream systems and consumables this quarter. Costco (NAS: COST) is in the game for the holiday run.

The momentum was already there before the seasonal push. Revenue soared 39% to $78.4 million in SodaStream's latest quarter, and adjusted earnings more than doubled.

SodaStream could have had a feisty competitor this season, but Primo Water's (NAS: PRMW) Flavorstation faced rollout delays earlier this year and is now dealing with retailer resistance to stock the rival platform.

A year ago, cynics figured that SodaStream's 2010 surge in popularity was a novelty. Now that momentum has continued to build through 2011, it's getting harder to deny the Israeli pop star's appeal.

The shares have climbed only 11% this year after a successful 2010 IPO, so it's not as if a strong 2011 holiday season has already been priced into the stock. In fact, the opposite appears to be happening. I'll take advantage of this opportunity to back our CAPScall initiative for accountability, initiating a bullish call for SodaStream on Motley Fool CAPS.

Drink up!

If you want to follow this pop star through its fizz and flat times, addSodaStream Internationalto My Watchlist.

At the time this article was published The Motley Fool owns shares of Costco Wholesale.Motley Fool newsletter serviceshave recommended buying shares of SodaStream International, Green Mountain Coffee Roasters, Bed Bath & Beyond, Costco Wholesale, and Staples.Motley Fool newsletter serviceshave also recommended creating a lurking gator position in Green Mountain Coffee Roasters. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Green Mountain. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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