Sodastream International Ltd (SODA), PepsiCo, Inc. (PEP): Could “PepsiStream” Actually Work?

In the meantime, Pepsi was only able to increase its own net revenue last quarter by a meager 1% year over year, instead preferring to place greater emphasis on still-low 4.4% “organic revenue growth,” which doesn’t take into account the cost of structural changes or the negative effects of foreign exchange translation. Fellow industry giant The Coca-Cola Company (NYSE:KO) fared even worse, posting a net revenue decline of 1% last quarter. Like Pepsi, The Coca-Cola Company (NYSE:KO) also wanted to emphasize its organic net revenue, which did grow 2% when you take currency and structural changes out of the mix.

The bottom line is that, while these beverage titans remain massively profitable, it’s impossible for either of them to match SodaStream’s growth. For now, though, Coke and Pepsi are happy to do their best to maintain their current markets.

Between a rock and a hard place
However, while some people may believe SodaStream is a fad, the company is also happy to continue chipping away at the markets Coke and Pepsi have dominated for so many decades.

In the end, though “PepsiStream” certainly doesn’t make sense now, SodaStream has set itself up nicely to put the hurt on its larger competitors as consumers increasingly accept its at-home carbonation machines as a viable alternative.

It certainly won’t happen overnight, but if the trend continues over the next few decades, we may just see the folks at Coke and Pepsi ultimately forced to abandon their current business model in favor of SodaStream’s more efficient, environmentally friendly ways.

The only difference, however, is that SodaStream could just grow too large to acquire by then.

The article Could “PepsiStream” Actually Work? originally appeared on Fool.com.

Fool contributor Steve Symington 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.

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