Drinking From the SodaStream Fountain

Full disclosure: I love soda. I probably drink more than I should, and have tried unsuccessfully to cut back in the past. After this past Thanksgiving weekend, I may have found a solution to this problem, as well as a company with real growth potential.

My friend Shawn (you may remember him from this other article) had been raving about his new SodaStream (NAS: SODA) machine and all the great soda that it made. Every new flavor was a flurry of text messages of adoration for the product, which led to a purchase of a flavor pack for my Thanksgiving visit. And after trying an assortment of flavors, I'm sold.

Won't replace the big boys, but...
As many of my coworkers can attest, I am a fan of Diet Dr. Pepper, a brand owned by Dr Pepper Snapple (NYS: DPS) . I knew that SodaStream would not be able to replicate the flavor of regular-brand sodas: The cola wouldn't really taste like Coca-Cola (NYS: KO) ; the Fountain Mist would pale in comparison to PepsiCo's (NYS: PEP) Mountain Dew. But I was pleasantly surprised after trying Dr. Pete, the SodaStream equivalent of my favorite beverage. It was close enough to Dr. Pepper that I could see myself replacing it in the future.

Beyond taste, it is also a healthier alternative to the real thing, with regular Dr. Pete checking in at 37 calories per serving, compared to Dr Pepper's 100 calories. This is repeated over its other brands as well. Even its energy drink, which could probably be mistaken for Red Bull or Hansen Natural's (NAS: HANS) Monster, has a third of the calories of its competitors, as well as less sugar and sodium.

Enough about the product!
SodaStream the company has had a bit of a rough patch this year, down more than 60% from its 52-week high. This is surprising to me, especially considering its recent quarterly results that showed 39% revenue growth and boosted guidance for the remainder of the year. Unlike some competitors, like Primo Water (NAS: PRMW) , SodaStream products are available in more than 7,000 retail outlets in the U.S., compared to Primo Flavorstation's presence in only 500 Lowe's (NYS: LOW) stores.

This retail presence will only help expand SodaStream's customer base here in the U.S. The company already has a strong European presence, including a presence in more than 20% of Swedish homes. If the company could reach even a quarter of the same market saturation in the U.S., it would sell nearly 6 million machines in this country. This 15-fold increase in customers would net even more profits for the company, which might make it a great buy at today's price.

A healthier alternative
I will be moving in the next few months, and one of the first things that I will buy for my new home is a SodaStream machine. Not only is the process to make your own soda ridiculously easy, the health benefits alone will make it a great purchase, especially at the volume of soda I drink. If you would like to keep an eye on all the exciting developments with this company, I invite you to add SodaStream to My Watchlist today. Using My Watchlist investors can stay current on all of the exciting news and relevant investing information.

At the time thisarticle was published Fool contributor Robert Eberhard holds no position in any company mentioned. The Motley Fool owns shares of PepsiCo and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Lowe's Companies, PepsiCo, Hansen Natural, SodaStream International, and Coca-Cola. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo. Motley Fool newsletter services have recommended writing covered calls in Lowe's Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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