Bursting the Bubble: PepsiCo Adds Fizz With SodaStream

With the popularity of seltzer water rising in America, PepsiCo has jumped on the wagon and purchased SodaStream International for $3.2 billion.

Israeli company SodaStream, maker of the do-it-yourself sparkling water household devices, offers concentrated flavorings and syrups to add to water after being carbonated that are made with alternative sweeteners or unsweetened. The company transforms ordinary tap water into flavored sparkling water. The seltzer water brand also promotes health and wellness and that their devices are environmentally friendly.

Sparking water is the fastest-growing segment in the bottled water category and sales of seltzer have grown 42 percent in the past five years, according to Beverage Marketing Corp. As consumers are trading in sugary drinks for healthier and cleaner options, sparkling water is quickly becoming a growing trend.

“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world… PepsiCo is finding new ways to reach consumers beyond the bottle,” said Ramon Laguarta, CEO-Elect and President of PepsiCo.

PepsiCo’s rival, Coca Cola, recently purchased seltzer water company Topo Chico, which has grown into a popular, household name. Coca Cola recently purchased BodyArmor to join the competition in sports drinks against PepsiCo’s king Gatorade. The competition only continues to heat up between these two giants as both companies acquire brands to enrich their portfolios and consumer trends.

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Acquisition of SodaStream aligns with PepsiCo’s Performance with Purpose journey

The acquisition is in line with PepsiCo’s Performance with Purpose journey, promoting health and wellness through environmentally friendly, cost-effective and fun-to-use beverage solutions, according to the company.

Daniel Birnbaum, SodaStream CEO and Director said, “Today marks an important milestone in the SodaStream journey. It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world. We are honored to be chosen as PepsiCo’s beachhead for at home preparation to empower consumers around the world with additional choices.”

The acquisition has been unanimously approved by the Boards of Directors of both companies and is expected to close by January 2019.

“PepsiCo and SodaStream are an inspired match,” said PepsiCo Chairman and CEO Indra Nooyi. “That focus is well-aligned with Performance with Purpose, our philosophy of making more nutritious products while limiting our environmental footprint. Together, we can advance our shared vision of a healthier, more-sustainable planet.”