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US: PepsiCo confirms it’s on trial with SodaStream

The WSJ reported that PepsiCo and SodaStream have agreed to a “small-scale, limited-time test” that will begin in the coming weeks. In a statement sent to the newspaper, PepsiCo said that it is “exploring multiple technologies in this space” and that “SodaStream is one of several companies we’re talking to about potential ideas for the future.”

In a separate statement sent to the newspaper, SodaStream wrote that “there are currently no discussions between SodaStream and PepsiCo concerning any other form of broader business collaboration.”

The deal, which sent SodaStream’s stock soaring more than 15%, could potentially give a big boost to Sodastream’s sluggish performance, and help Pepsi navigate a marketplace that’s increasingly hostile to sugary, high-calorie soft drinks, analysts say.

The test run will feature beverages geared towards health-conscious buyers, including naturally sweetened Pepsi Homemade and Sierra Mist Homemade with 50-60 calories per 8 oz. serving. The 10-week trial will launch in the next few weeks in Orlando and Tampa, according to Pepsi.

“At-home, make-your-own beverages represent an emerging category that has generated interest among some consumers… Our discussions with SodaStream are specifically focused on a small-scale, limited time test scheduled for later this year,” according to the beverage giant.

PepsiCo’s test comes a few months before the Coca-Cola Co is expected to launch a new line of pod-based beverages for use in Keurig’s soon-to-be-launched Keurig Cold system, which will allow consumers to make a variety of beverages, including carbonated ones, using its capsule-based technology.

In February, Coca-Cola purchased a minority stake in Keurig and signed a long-term partnership with the company to produce a variety of pod-based Coke products.

Sodastream sales have dropped sharply in the past year. On Oct 7, the company announced third quarter revenues will dive an estimated 13% from a year earlier, to around $125-million. Even after its strong performance after the Pepsi announcement, Sodastream’s stock – which closed at $24.45 – still hasn’t regained the $30-plus level that preceded the sales warning.

It’s possible that joining forces with a global brand like Pepsi could ignite Sodastream’s growth prospects, in much the same way as Keurig coffee makers took off after the company struck a deal with Starbucks. If Sodastream’s sales were to spike, the machines could become a more powerful distribution system for Pepsi’s products.

Source:; Forbes