Innovation driven by competition has taken us amazing places in the food and beverage industry. Take pizza for example. If it wasn’t for hair-yanking competition, you wouldn’t see a pizza with hot dogs baked into a pretzel crust (thanks, Pizza Hut). You wouldn’t see new wildly successful fast casuals like Blaze Pizza, Pieology, and MOD Pizza—or Chipotle entering the pizza space in a partnership to open Pizza Locales.
Homemade carbonated beverages is another market about to explode before our eyes, and it will be awesome to watch and benefit from.
We begin with the company SodaStream. It has sold sparkling water makers for some time. But do you know anyone who has one? Few people probably even know they exist. According to The Wall Street Journal, SodaStream’s revenue fell 23% in Q1. Retailers that were selling the units, which use carbon-dioxide cylinders, for $80 to $180, have already started scaling back on inventory for lack of consumer interest.
But everything is set to change the second Keurig launches its Keurig Kold drinkmaker this fall. It is partnering with Coke, allowing consumers to make Sprite, Fanta, Coke and Dr. Pepper Snapple drinks at home.
Now, note that the Keurig Kold isn’t drink utopia. The units will cost $300, and $1 a serving. However, the unit doesn’t use carbon cylinders, and it’s a mini refrigerator, actually serving cold drinks without the need for ice cubes.
In anticipation of the impending competition, SodaStream woke up. That lower price point it enjoys? It’s developing its next generation upscale machine that will cost half of Keurig’s at $150. No doubt it will also boast that the per-serving price (8 cents to 20 cents) is also lower than Keurig’s $1.
Oh, and in May, SodaStream announced a new partnership with Le Cordon Bleu culinary schools to develop co-branded flavors using natural ingredients—like raspberry lychee rose. They will put out recipe books to give consumers ideas for the types of trendy soda waters they can make. No doubt, they are armed with the knowledge that carbonated water sales increased 10% last year—the third year of double-digit growth, according The Wall Street Journal.
Previously, SodaStream tried to sell self-branded soda syrups. Now it will sell low-calorie naturally sweetened waters like lime basil and yuzu mandarin. It will also work on its marketing message to encourage drinking more water, flavorfully. And it’s working on a new unit for later in 2016 that will carbonate things other than water.
That, my friends, is the power of competition.
And there’s even more competition to fuel the fire. Bonne O is a newer Canadian company that sells sparkling water makers without CO2 tanks for $150 through Williams-Sonoma and other outlets. It has its own sparkling marketing proposition. For one, it offers a new natural sparkling water recipe every week on its blog, via email and on social media.
Be watching as these companies try to outdo each other. As always, the winner will be us. That’s the beauty of American enterprise.
Tell me what you think.
Jody
