PepsiCo buys SodaStream for $3.2bn
Following recent news that long-tenured PepsiCo CEO Indra Nooyi will step down in October, the company has moved forward with a high-profile acquisition.
SodaStream is the world’s leading sparkling water brand that transforms tap water into a flavored, sparkling beverage.
PepsiCo already owns 22 billion-dollar brands and generated more than $63bn in total net revenue in 2017. Top brands at New York-based PepsiCo include Frito-Lay, Pepsi-Cola, Gatorade, Quaker and Tropicana, sold in more than 200 countries around the world.
SodaStream International was relaunched in 1998 with an emphasis on healthy drinks. Its namesake product carbonates water at home using a pressurized cylinder, then flavors it with separately sold syrups.
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. I am excited our team will have access to PepsiCo's vast capabilities and resources to take us to the next level.”
Nooyi said, "PepsiCo and SodaStream are an inspired match. Daniel and his leadership team have built an extraordinary company that is offering consumers the ability to make great-tasting beverages while reducing the amount of waste generated. 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."
Environmental groups like Oceana, the largest international ocean conservation and advocacy organization, view this deal as a chance for PepsiCo to go a step further in its sustainability initiatives and commit to reducing its global single-use plastics production.
Jacqueline Savitz, Oceana’s Chief Policy Officer for North America, said "This acquisition creates an opportunity for Pepsi to go beyond recycling and commit to a significant reduction in the amount of plastic bottles it’s putting on the shelves. The imperative to reduce single-use plastic at the source has never been as clear as it is today, and the solution, alternative delivery systems like SodaStream, is literally at our fingertips.’”
Expansion to flavor offerings
Alexander Esposito, research analyst at Euromonitor International, said, “PepsiCo’s purchase of SodaStream is a logical continuation of the company’s plan to increase its offerings of products that respond to increasing demands for healthier, more sustainable beverages.”
“Following this acquisition, notable things to watch for will be expansions to SodaStream’s flavor offering as well as possible new introductions that may respond to increasing demand for carbonated waters that include functional ingredients such as electrolytes and digestive aids.”
SodaStream celebrated the deal by promoting a 20% off sale on its website on Monday. The transaction is expected to finalized by January 2019.