Homemade Soda Is the New Store-Bought Soda
On Monday, Green Mountain Coffee Roasters filed a trademark application for a soda maker that looks like it could compete with SodaStream . The Karbon trademark is set to be used for soda making and sparkling beverages, according to the company's filing. The success of Green Mountain's Keurig coffee brewers should give SodaStream pause, and perhaps a reason to re-evaluate the aggressiveness of its marketing.
SodaStream is currently in a comfortable position as the only real name in homemade soda. While other companies have made attempts, none of them have had the clout that Green Mountain could bring to the venture. The move makes sense for Green Mountain, and the long road for SodaStream just got bumpier.
Why Green Mountain would want soda
The beauty of the soda-maker model is that it parallels the company's existing coffee model. There's a countertop machine that uses disposable cartridges, and the company sells the machines at close to cost to make long-term cash off the cartridges. In its last quarter, for instance, Green Mountain earned 79% of its revenue from its single serve packs. Homemade soda is almost the same thing. SodaStream generated 60% of quarterly revenue from consumables last quarter, and that revenue grew 37% year over year.
For Green Mountain, the ease of transitioning into soda makes it a natural fit. The company already gets how the system works, and it has a great network of companies that it can work with. While SodaStream has mixes from Kool-Aid, Country Time, and Crystal Light, Green Mountain has coffee connections that it's ready to put to work in the soda business.
Green Mountain works with Newman's Own, Starbucks , and Snapple, to name a few. Those brands all have flavors that would work well with the new carbonating system, and Starbucks in particular has a gold mine up its sleeve. The company's Refreshers line of energy drinks has been a success, and the beverages lend themselves to carbonation.
The good news for SodaStream
While the idea of Green Mountain getting into carbonated beverages may seem like bad news for SodaStream, I think the increased competition is going to work well for the company. By adding its bulk to the industry, Green Mountain should bring more consumers into the "make your own" world.
If SodaStream continues to produce high-quality machines, it's going to get more and more attention as consumers compare the Karbon to the SodaStream line. That should result in more sales for both companies, and give SodaStream a nice little boost to its bottom line. Overall, I think the addition of Green Mountain to the soda system business is going to be a good thing for everyone.
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The article Homemade Soda Is the New Store-Bought Soda originally appeared on Fool.com.Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Green Mountain Coffee Roasters, SodaStream, and Starbucks and owns shares of SodaStream and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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