Is Sodastream International Ltd (SODA) a Fad?

A quick word on water

Finally, Rick attempts to debunk my bottled water comparison by claiming that people purchase bottled water for health-related reasons. In my original article, I had reasoned that, given the growing bottled water industry, consumers find it more convenient to buy their drinks pre-packaged.

While I’m sure Rick is right to some extent — case in point, those people spending $5 on a bottle of Fiji Water — the evidence suggests that, most of the time, people purchase bottled water for convenience, not health.

A 2009 study published in the journal BMC Public Health, concluded that consumers purchase bottled water for its on-the-go convenience — not for health reasons.

SodaStream’s growth potential

All that said, while I continue to have serious doubts about the company’s underlying business, I’m not shorting it. SodaStream could continue to grow in the US, and may be able to carve out a larger niche of die-hard fans.

But at the same time, I find the notion that it will fundamentally change the US soda industry to be quite far-fetched. The stock might continue to work, but I think there are better growth opportunities out there.

Salvatore Mattera has no position in any stocks mentioned. The Motley Fool recommends Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) and SodaStream. The Motley Fool owns shares of Sodastream International Ltd (NASDAQ:SODA).

The article Is SodaStream a Fad? originally appeared on Fool.com.

Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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