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Israeli business takes on soda giants

By The Associated Press
Published: December 08. 2012 4:00AM PST

JERUSALEM — An Israeli maker of home soda machines hopes to make a splash in the U.S. soft drink market through a global advertising campaign it will launch during Super Bowl XLVII.

For SodaStream, the advertising push marks a bold — and risky — bet on tapping into the tastes of the world’s largest soft drink market. But opposition from major beverage makers and criticism of the company’s operations in a Jewish settlement in the Israeli-occupied West Bank could hinder SodaStream’s goal of making it big in the U.S. The company has long been a target of pro-Palestinian activists who promote boycotts of settlement products.

The company says it is the world’s biggest manufacturer and distributor of home beverage carbonation systems, which it is trying to position as a cheaper and environmentally friendly alternative to bottled soft drinks. SodaStream says its machines offer a simple and compact, do-it-yourself solution for those who want to carbonate their own drinks.

“This is the new way to do soda. We’re revolutionizing it," said SodaStream CEO Daniel Birnbaum. “There exists a smarter way to enjoy soft drinks, getting the bubbles without the bottles."

He said the world’s soft-drink giants are relying on an outdated business model, and have hurt the environment by generating some 1 billion bottles each day. SodaStream’s drinks can be made one glass at a time, or can fill reusable bottles, then flavored with juices or other mixers.

SodaStream has enjoyed widespread success in Europe. It says 25 percent of Swedish households use its products, and reports similarly high rates in countries like Finland and the Czech Republic.

But in the U.S., the household penetration rate is just 1 percent.

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