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With Clever New Ads, SodaStream International Ltd. Takes Aim at Big Soda

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A new ad positions the at-home carbonated beverage maker as the more evolved, greener alternative in a sorely outdated market.

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Since its IPO in 2010, there has been debate over whether SodaStream International Ltd. (NYSE:SODA) is the next big thing in the beverage industry, or just a niche product. Analyst opinion aside, a new full-page, color print ad by SodaStream in today's USA Today shows the company is confident that it's in direct competition with PepsiCo, Inc. (NYSE:PEP) and The Coca-Cola Company (NYSE:KO).

Take a look for yourself:



The labels on the products in the ad may lack the iconic "Coca-Cola" label, but the familiar red color does little to veil SodaStream's pointed insult; the two flavoring syrups shown at the bottom righthand corner of the ad subtly happen to reflect Pepsi's colors. The message is clear: The age of store-bought and waste-producing soda is nearing its end.

This aggressive campaigning against the major soda producers is nothing new to SodaStream. The company's "Game Changer" commercial was prohibited from airing on CBS (NYSE:CBS) during the Super Bowl for being too forward in its attack, forcing it to run an alternative, less direct ad. The original ad -- which was banned on other major networks including NBC and ABC, who would only air the version that doesn't specifically feature Coke and Pepsi -- can be seen below.



The image of Pepsi and Coke bottles exploding as delivery men race to deliver them doesn't really seem all that unacceptable, but Alex Bogusky, the creator of the ad, speculated that Pepsi's role as sponsor of Super Bowl XLVII's Half Time Show could very well have been a factor in preventing the commercial from airing.

"Soda Stream has the right to show competitors, so I wonder why this Superbowl spot was rejected? Pepsi half-time show?" tweeted Bogusky.
As a less widely recognized company, SodaStream will certainly struggle to gain the the big sponsorships necessary to establish long-lasting relationships with major networks and organizations. It did, however, take Coca-Cola's place as the sponsor of the American Pavilion at the Cannes Film Festival this May.

SodaStream's ad claims that each of its units results in 2,000 fewer plastic bottles being used by the average family in one year. The ad does not specify the specific country used by the source to attain this number, but we've contacted SodaStream asking for clarification and await its response. Meanwhile, SodaStream also worked with The Carbon Trust to measure its carbon footprint throughout the lifecycle of its product. That study showed that SodaStream's footprint was 75% smaller than those of its competitors in the beverage aisle. The company has been equally aggressive in marketing this benefit, all the while criticizing the current kings of the beverage industry.

In an ad run in Belgium, done as part of a partnership between SodaStream and 5 Gyres, an environmental activist group, a man who appears to be a prominent federal minister delivers a speech slamming the use of plastic and announcing an increased tax on the troublesome material. You can see for yourself, however, that not everything is exactly as it seems (subtitles can be turned on via the 'CC' button):



The green angle to SodaStream's positioning could potentially provide for key partnerships going forward as environmental activism continues to be a pertinent issue. The additional exposure that comes as a result of such alliances could be critical for a company like SodaStream, whose product has a bit of a learning curve for the average consumer.

The process of creating at-home beverages is not, in itself, complicated. But the steps of purchasing the soda maker, a reusable bottle, a canister of carbon dioxide (that must be replaced periodically), and syrup are a far cry from stopping by the store for a 24-pack of Pepsi or Coke.

Pitting itself against market leaders is a start for SodaStream, but if its numbers fail to back up the bravado, there's not much hope for a market shake-up. In respective first quarter reports, Coke saw net revenue decline by 1%, Pepsi's organic revenue grew by 4.4%, and SodaStream's total revenue increased 33.9%. Pepsi and Coke are far more established companies, of course, and the SodaStream brand is just beginning to gain traction, but its growth figures are still attractive.

Swirling rumors of Pepsi's plans to acquire the aspiring competitor for $2 billion saw SodaStream stock surge 30% pre-market on June 6. When Pepsi swiftly put this gossip to rest, SodaStream's 30% jump was cut to a 4.5% gain with two hours still remaining before the opening bell.

With an acquisition off the table for now, SodaStream is left to continue its efforts to acquire new supporters and will almost certainly go on striking Big Soda where it hurts.
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