Sodastream International Ltd (SODA) Is a Fad

Third, using Sodastream International Ltd (NASDAQ:SODA) isn’t any more convenient, and it doesn’t save people a significant amount of money. Soda, if purchased intelligently, can be bought for next to nothing. Most grocery stores run sales on soda constantly — three packs of 12 for $10 seems to be a common promotion in my area. That means that a typical can of The Coca-Cola Company (NYSE:KO) or PepsiCo, Inc. (NYSE:PEP) could be bought for roughly a quarter.

Compare that to the combined cost of Sodastream International Ltd (NASDAQ:SODA)’s expensive machines (~$100), syrups (~$10), and regular gas refills (~$15). The savings is minimal or nonexistent.

In terms of convenience, I would argue that people prefer their beverages prepackaged. As evidence, I would point to the bottled water industry. In the US, water is nearly free and can be captured with any plastic bottle or cup — no expensive machine is required.

And yet, the bottled water industry continues to explode in popularity. In 2012, sales jumped 6.7% to $11.8 billion!

If consumers are increasingly willing to pay for bottled water (something that they can get at home basically for free), why on earth would anyone believe that they no longer want to pay for bottled soda?

Investing in SodaStream

Like many popular appliances that have come before it, Sodastream International Ltd (NASDAQ:SODA) will find a home in a small number of American households. But it will not disrupt the market to any meaningful extent.

Ultimately, the established soda players (The Coca-Cola Company (NYSE:KO), Pepsi) have no reason to fear it.

The article SodaStream Is a Fad originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, PepsiCo, and SodaStream. The Motley Fool owns shares of PepsiCo and SodaStream. 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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