The increasing popularity of sparkling water over the past decade can be attributed to a rise in health consciousness among consumers, as well as the brand appeal of such major players as LaCroix Sparkling Water and Perrier. The global soft drink market (i.e. nonalcoholic beverages) is extremely lucrative, with revenue expected to be US$900 billion in 2022 and an estimated annual growth of 5.36 per cent. 

SodaStream International, a major presence in the sparkling water market, is a company that distributes seltzer-making units and syrups in 47 countries via 70,000 different retail locations, and has a long tradition and rich history. The company’s origins go back to 1903, when it was one of the first providers of a system that allowed people to make carbonated water (otherwise known as ‘sparkling water’) at home. Founded by W&A Gilbey, the famous London gin distiller, its first soda-making apparatus was very popular with the British upper class. Even the royal family was equipped with a seltzer-making unit in the early twentieth century.

The company, constantly improving and updating its technology, now sells systems that allow people to add flavouring and produce their own soda from regular tap water, whenever they want to. Since 2020, people with SodaStream units have been able to make Pepsi beverages such as Pepsi, Pepsi Max and 7UP in the comfort of their very own homes. SodaStream claims that its machines are cost effective, allowing people to make sparkling water for only $0.20 per litre and traditional flavoured sodas for about $0.57 per litre. SodaStream had a 23.6 per cent share of the US retail carbonated water market in 2021, but it is in the Scandinavian countries that the company has seen its greatest success, maintaining a market share of about 50 per cent for years. 

Questions

1. Do a SWOT analysis for SodaStream. 

2. What are the marketing challenges facing SodaStream? 

3. Apart from marketing, what other challenges is the company facing? 

4. What strategic action is SodaStream taking in reaction to its current challenges? Do you think the company will be successful? Justify your answer.