It wasn’t that long ago that all we knew about at-home carbonation soda was Sodastream following their banned SuperBowl ad in 2013. In the years since, Coca-Cola has joined up with Keurig and Pepsi has partnered with Bevyz to develop home brewing units and syrups. We can now add another known competitor to the mix. Sparking Drink Systems (SDS) International has a product called Viberation that produced carbonated soda all within one beverage pod. It’s entirely possible that other companies are developing at-home carbonation units with its growing appeal. Consuming carbonated beverages in an environmental-friendly way helps remove some guilt by reducing the plastic waste. Sugar intake is another problem, but that’s a focus for another day. As more competitors enter this expansive home-brewed beverage space, what will define their success?
One of the stronger products in the marketplace would be the SDS Viberation. This Viberation has the capability to produce sparkling and enhanced waters, carbonate sodas, and even carbonate alcoholic beer without a CO2 cylinder. The elimination of a CO2 cylinder increases the usability of the device, and possibly increase its adoption rate. At this time, the Viberation is distributed across a variety of regional US-based distributors. In order for this device to succeed, it must gain more exposure through securing distribution, marketing, and innovation. Gaining distribution brings the Viberation to consumers that shop in bricks and mortar stores, or online. Marketing efforts educate the consumer on the product benefits and its unique selling proposition (great-tasting carbonated beverages without a separate CO2 device). Innovation makes meeting the consumer needs paramount with more flavors and assortment. All three could end up being done through collaboration. With a branded player (ie Starbucks? Dr Pepper Snapple Group) helps increase its reach, awareness, and appeal.
SodaStream’s main challenge appears to be part of its business model: carbonation cylinders. With the competition’s ability to carbonate a beverage without any CO2 tanks, the Israeli-based company is facing an uphill battle to innovate. Despite their recent marketing efforts at the SuperBowl to gain worldwide exposure, their growing stable of branded syrups, and their international distribution, the product still requires customers to invest in purchasing a CO2 device. As the market shifts toward “all-in-one” devices, SodaStream’s may need to develop an at-home carbonation unit that can brew soda without a CO2 cylinder. One of the core challenges SodaStream now faces is understanding whether their business model is still viable given the competitive landscape. The C2 cylinders is a lucrative revenue stream, but it is also the barrier toward their adoption with more home-brewing appliances available.
Coca-Cola’s partnership with Keurig brought greater attention to this product segment. Distribution and innovation likely are not challenges for the world’s largest beverage manufacturer. In fact, these areas exist as its core strengths. Keurig Cold will have the ability to not only brew Coca-Cola carbonated drinks, but also produce teas, sports drinks, juices, and a host of other Coca-Cola-manufactured beverages. Marketing may actually be where Coca-Cola’s Keurig Cold device sees the biggest challenge. The majority of their marketing dollars still reside with bottled beverages, and intensely promoting Keurig Cold will cannibalize their sales. Another marketing challenge would be Coca-Cola’s ability to create the demand for beverage format when their bottled format is so successful and widely available. Similar to Kraft MiO entering the liquid enhancers space first and Coca-Cola following, SodaStream pioneered the at-home carbonation space. The challenge for Coca-Cola within liquid enhancers is not their product assortment, but their marketing efforts to create the demand for the liquid enhancer form of their beverages. Coca-Cola beverage pods may endure the same fate as their liquid enhancers: broad assortment and distribution but limited marketing funds preventing the product line from reaching its full potential.
Pepsi’s Bevyz partnership will release an at-home carbonation unit to the market sooner than Coca-Cola. The Pepsi Bevyz Fresh Machine was launched in the U.S. this past May. Despite first-mover advantage, one of their core challenges appears to be marketing. The market has not heard of Bevyz, and the majority still do not know Pepsi has developed an at-home carbonation unit. While the product’s distribution and innovation are strengths, the marketing aspect seems to be the most significant barrier to overcome. Despite the product’s versatility to carbonate beverages, produce teas, juices, and waters, and even serve as a water cooler, consumers are simply unaware of this machine. Check out their 2011 Bevyz in Action video below. Pepsi has been slow to react when Coca-Cola moved first in other spaces, such as in liquid enhancers and intelligent fountain units. If Pepsi continues to think methodically before acting, they may stand to lose more ground to Coca-Cola and other competitors.
Each competitor faces their own challenge within this home-brewing beverage space. Roadblocks toward growth include marketing, distribution, and innovation – it just depends on your business stage. What is certain is more organizations are dedicating resources to small home appliances to help consumers make their own beverages. This in turn helps the segment approach critical mass toward being available in every consumer’s kitchen counter space.