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Sodastream Situation Analysis

2433 words - 10 pages

Since SodaStream is an appliance, the ideal customer is of the older millennial and baby boomer generation owning a home or living on their own; people usually buy appliances for their own space, and a younger millennial will not buy one for his parents’ house. The ideal customer profile is a health conscious male or female who enjoys carbonated beverages; they have found the healthy alternative in SodaStream; SodaStream consumers are active and in shape, or are looking to be. They enjoy healthy and organic foods and are also environmentally friendly.

The needs of the ideal customer are to have a carbonated beverage that is healthy and ...view middle of the document...

In the years between 2010 and 2014, SodaStream managed to increase its revenues from around $208 million to about $436 million; this figure’s growth was spearheaded by its phased distribution strategy which allowed SodaStream to increase US revenues from $15 million in 2009 to $143 million in 2012. SodaStream also has a marketing budget of $153 million.

SodaStream value proposition revolves around giving customers the ability to create personalized and healthy carbonated drinks, in an eco-friendly manner. Its short-term competitive advantage is to be the first-mover in the home-carbonated drinks in the USA.

SodaStream sells 4 products:
1) Soda makers: this appliance allows for glass bottle to be filled with carbonation and flavouring. The soda maker is only compatible with SodaStream carbonators.
2) Carbonators: the carbonators come in two sizes; 60L and 120L
Customers buy SodaStream carbonators and exchange them for new ones at select retailer when the carbon dioxide runs out. The unique design of the carbonator prevents it from being refilled, so users have no choice but to get a new one through SodaStream’s exchange program.
3) Flavours: flavour packets that can be added to the carbonated water, come in different soda flavours such as regular, diet and energy calories.
4) Bottles: These high pressure resistant bottles were designed for use with its soda makers.

* Soda maker: between $80-200
* Flavours: $4.99 per bottle (makes 33 servings)
* Bottles: $19.99 for a pack of two bottles
* Carbonator: $30-35 for 60L, $50 for 130L (90% gross margin)
SodaStream operates in 45 different markets; the company distributes directly in 21, while the appliance is sold through independent distributors in the others.
For its entry in the USA market, SodaStream used a phased distribution strategy.
* First phase: SodaStream sold at ‘innovative” home goods specialty stores such as Williams-Sonoma and Sur la Table). The customers here those who were not only fashion trendsetters, but were also interested in European products.
* Second phase: make the product available at the many “early adopter” stores such as Bloomingdales, Macy’s and Bed, Bath and Beyond.
* The final phase was to move into the mass market category in two steps.
* through large chains such as Walmart, Costco, Best Buy and Staples
* into grocery and drug stores.
SodaStream also created a network of retailers that participated to the carbonator exchange program. The result? Its retail store presence grew from 325 stores to 15,000 in the USA between 2008 and 2012.

SodaStream’s brand identity was that of the “stylish rebel” in the industry and also as the eco-friendly alternative in comparison with traditional soft drinks companies. The company believed that a key societal trend that would differentiate their brand was an...

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