A few years ago, Sodastream, a DIY carbonated beverage company, decided to take out a Super Bowl commercial, introducing itself to the American and International public. Sodastream thus far has been pretty successful. Though it is not an everyday name we hear, it has certainly found its way into a large amount of households.
But it seems that the honeymoon period is over.
Coca-Cola has just announced that it is investing $1.25 billion dollars into Green Mountain Coffee Roasters (GMCR), which translates to a 10% ownership share. A goal in the partnership? Providing GMCR the resources and brand recognition it needs to build and market a DIY carbonated machine that will compete with Sodastream.
GMCR will be allowed to carry products like Coke, Fanta, and Sprite. Sodastream, on the other hand, has not reached any deals with companies to offer a branded product. It still relies on its generic goods.
Who knows, Sodastream. Maybe this move by Coca-Cola will move Pepsi to become a little more fond of you.
We love moves like this, because Coca-Cola saw the opportunity to take sales away from Sodastream. For too long has Sodastream been in its own niche. Coke found a reason and a way to challenge.
On the flipside, from where we are, it looks like Sodastream made no effort to make competition more difficult for potential entrants. Constantly improving the product and adding additional and complementary features are ways Sodastream could have cemented itself in an industry it found.
So instead of willingly doing it, Coca-Cola is forcing Sodastream to compete.
And competition is great for the consumer. Let's see what they come up with.
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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