The entire tone of this op-ed strikes me as either impossibly naive or full of manufactured outrage. How a Forbes contributor is somehow oblivious to the nature of entrenched (and lucrative) corporate relationships is beyond me.
Not to mention that beneath all the free-market rah-rah chest thumping, he entirely disregards the fact that a private company is quite within their right, laws permitting, to decide with whom they wish to do business.
Forbes.com is essentially all crowd sourced 'contributors' at this point, each running their own separate blog. There's very little oversight/screening of contributors. There's been a pretty noticeable drop in quality since they started doing this, I'm curious how long they have before the brand is entirely diluted.
There is a break even point after which you do save money, but the up-front costs are fairly steep. This is best for someone that drinks soda on a daily basis.
From someone in my family that owns one, some flavors are good while others (fake Dr. Pepper, for example) are horrible.
Compared to bottled/canned soda, you're right that there are high up-front costs and an eventual break-even point to using a SodaStream.
Compared to the more DIY version of buying a CO2 tank and the proper fittings to carbonate a 1- or 2-liter bottle (all easily found at a homebrewing store), the opposite is true: the initial buy-in of a SodaStream is about half the price of a CO2 tank and dual-gauge regulator, but refill prices for a 5lb tank are pennies on the dollar compared to SodaStream's refill cartridges. SodaStream's ultimately a razor and blades business model.
It is possible to hook the Soda Stream up to a more reasonable CO2 tank. The Amazon reviews[1] are actually quite helpful and interesting, especially the top one-star.
What this sounds like to me, is SodaStream is likely owned as some tiny subsidary of coke or pepsi already, or is secretly in talks of being absorbed, and this is all a 'manufactured outrage virial marketing campaign'
>SodaStream has a product that could be wildly disruptive to the soda industry, if successful.
Not really. Maybe with a different business model, but from the cost analysis I've seen, SodaStream comes in at about $0.40/L, which is a little over half of what Coke and Pepsi cost, but the cost of Coke and Pepsi is about 50% branding anyway. A fair comparison would be generic sodas, which are are closer to $0.50/L. So you're only saving about 20%, even though you've cut out the cost of bottling water, warehousing it, and shipping it around the country (aka, most of the actual cost of soda).
Which is to say that the SodaStream is a rip-off. They lock you into buying their proprietary CO2 tanks (which are specially threaded so you can't shop around), so it's sort of a similar business model to printers or razors. Except, of course, that you can actually build a DIY carbonation system for not much more than the cost of the SodaStream fountain itself (and it's not a difficult build; you just have to connect some hoses to some off-the-shelf parts, and you can find plenty of guides on the internet).
One of the reviews that I linked to talked about this. According to them, they talked to several suppliers who said the food-grade difference was make by turning the (source! I think) canister over and running it for a couple seconds.
Take that with a big grain of salt. I'd certainly look into it more before I used it. :)
Their early movers target market isn't all that price sensitive. They mostly sell on emotion/cause and the rejection stuff is a perfect fit for that audience.
Guess they try to fill the chasm with hipsters so that joe-shmoe can walk right over it.
They make it a publicity point when their ads are banned. It creates an aura of forbidden fruit. And by god do people love to feel sanctimonious about their consumer choices as political speech.
The genius move to me is the fact that after 100 years of marketing by PepsiCo and Coca-Cola to create a multi billion dollar global market, here comes these guys that just piggy back on all that to sell the same sugar water but delivered in in shiny metal/plastics proprietary gadgets.
John Sculley should have jumped on board with these guys instead.
Yes, but for less than the cost of the SodaStream, not even counting the adapter to attach it to arbitrary tanks, you can build your own DIY setup [1] (which involves screwing some parts together) which you can attach a standard tank to and which you can adjust the pressure on.
Great analysis. Though, odd choice of numbers. In the "carbonated water" chart, they assume 2 liters/week (i.e. 104 liters/year), yet further down they mention that the average American consumes 170 liters/year of soda each year.
I don't really drink soda. But I love carbonated water, as probably anyone with a sodastream probably does. I drink 2 liters of Sodastream per DAY, and thus my breakeven point was at 90 days, not 90 weeks.
Not to mention that in some places, carbonated water at the supermarket costs way more than USD0.8 per bottle, and that you don't need to pay 17USD for a refill of gas, at least in Europe you pay for the gas bottle, but the refills are about half that price.
We've had a sodastream for over 4 years now, and have actually saved a big chunk of change on it...
With the caveat that all of this falls into the category of first world problems...
Regarding the economics, as someone with a serious diet coke addiction, the SodaStream has been a godsend. My first step in getting off diet coke: switching to seltzer water. But seltzer still costs roughly 1$ / 2 liter bottle (and I usually see it for 1.19 here), or at least .50/liter, whereas the sodastream is estimated to be ~.30/liter. I drink at least 1 liter / day, 2-3 on weekends, which means .20-.60 saved/day, or ~70-220/year saved. Plus, you always have it when you need it, and you don't have to lug around water bottles from the store.
I wouldn't recommend it for the actual soda flavors, however, or if you don't use it very often. But if you have a problem like I do, it's well worth it, and pays for itself fairly quickly. But mostly I like avoiding the vast amounts of plastic waste I'd otherwise be generating.
This isn't true. It's cheaper than lots of small bottles of sparkling water, which is what we use it for. Big bottles of sparkling water, meanwhile, lose most of the fizz before they are half empty. Don't buy any sodastream flavours; use double-concentrate sugar free cordials from the local supermarket instead. Sodastream isn't really a replacement for things like cola, the flavours are too low quality.
Ad firm makes ad they already know CBS wouldn't allow. Ad gets rejected. The outrage! The controversy! Ad then gets 10x more exposure and they can resell the spot.
SodaStream, like Godaddy, Peta, many others before. Pretty smart.
This wasn't an advertisement that was going to shock value, but crossed the line. This is an advertisement that was 'too competitive' with entrenched interests. CBS saying that its advertisement sales are not a 'free market.'
It's less disturbing then the issue with CBS + CNET + CES2013, but it shows a pattern.
Companies regularly do things to keep good relations with their sponsors. Isn't that assumed? I'm not in the ad space in any way, shape or form - and maybe I am jaded - but this seems like something I would expect from a multinational corporation
PornHub.com also submitted an offer to buy a Super Bowl ad, but was rejected by CBS. Without a doubt, they knew it would be rejected, and were hoping for the free publicity. Based on the proposed ad, I think they got their money's worth.
SodaStream puts a deliberately incompatible and patented connector on their CO2 bottles just to charge a huge markup on refills. They sort of deserve to face someone else's anticompetitive shady deal.
I fill up my SodaStream with bottles from AGA here in Denmark (they have a "get the 6th one free" special so the effective refill cost is about 15 USD). There's also this system: http://www.wassermaxx.com/ -- again compatible.
Perhaps SodaStream etc. is more popular here in Europe as we don't drive quite that much in cars. I'm sure I drink 20-30l of carbonated water per week; I wouldn't want to have to carry that home from the shop every week and return the empty bottles the next week.
Except making my water fizzy, AGA's CO2 production is apparently used to extinguish exotic fires. There's a particular type of compressed wood pellets used in heating power plants here, that wood is stored in large silos which apparently can catch fire internally. They spent 2 weeks trying to slowly extinguish this fire using 170 ton of CO2 shipped by trucks from AGA (equivalent to 400,000 SodaStream compatible containers).
You basically need carbonated water on tap! That's a pretty amazing consumption volume. I wouldn't drink much more than half that in a day if you combined all my fluid intake I don't think.
Really this is a big deal? I remember soda stream from the 80's in the UK. I'm sure they even eventually had official coke and Pepsi syrups that could be used with them. Didn't kill the market there and I'm sure it won't here.
The whole "being green" thing has contributed a lot to their recent success. Also their flavors (afaik) use actual sugar instead of HFCS and diet flavors have no aspartame. I use mine just to make soda water and love it.
SodaStream tries everything they can to stop people competing with them to refill their gas cylinders or supply competing gas cylinders for use with the equipment they sell, and have largely succeeded, allowing them to sell carbon dioxide at a significant mark up.
For comparison, considering only the cost of obtaining carbonated water, and assuming water is free (since it isn't a significant cost), in New Zealand dollars:
1 L of store bought carbonated water: ~$0.99
1 L of water at the lowest Sodastream carbonation: $0.20
(assuming $12 / 450g of CO2, 450g makes 60L).
1 L of water using market rate food grade CO2: $0.0032
(assuming a 3.5 kg cylinder makes 467 L and costs $15
to fill).
Note that if you do buy a cylinder, there are additional costs (in NZ, a cylinder must have a safety warrant of fitness issued in the last three years to be filled, which costs ~$15 - so that is an additional $5/year to add to the cost of ownership).
If I am currently paying $1 per bottle of store bought (2L) club soda, and I get make 2 L of water using Sodastream for $0.80, I will make my money back in no time (considering I drink 3+ liter a day).
Sure it might be cheaper to go food grade and do it that way, but I am more than happy saving even a smaller amount of money, because it adds up quick.
Who drinks just pure soda water? I'm American and I never see this. My wife visited the Ukraine and it's apparently quite common there. I also found Argentina drinks a lot of "agua con gas". Still, I'm just fine with plain flat water and some ice.
In every of the European countries I've been to, every time I go to a nice restaurant I've been asked whether I wanted my mineral water plain or fizzy. The less nice places might bring you tap water by default (which is generally perfectly fine and safe).
Some eco-friendly system places here in Copenhagen now have their own water filtration system and make higher-quality still and fizzy water on site.
An aside, if in a high altitude country that speaks Spanish, if you learn nothing else, learn the difference between aqua sin gas and aqua con gas (excuse my possibly incorrect spelling). The resulting explosion marks you as a tourist for the rest of the day.
I'm from Europe ... and yes I get funny looks when I ask for club soda at bars and restaurants. I stopped drinking Soda with sugar/HFCS/fake sugar about 2 years ago for health reasons. I like the carbonation.
There are quite a few people I know personally that drink it as well (non-Europeans), mainly because it is better for them than regular soda.
I wonder why they don't market that more widely, I was looking for refills around a display and couldn't find them. There was nothing about where or how to get a canister that I could find on the outer packaging.
The CO2 canisters are refilled/exchanged and not disposable. It certainly passes the smell test to me and they have a ton of info on their carbon footprint on the website. For me, I love the convenience of not having to go buy bottles of soda water and then recycling them after. You just fill the sodastream bottle, carbonate, drink, rinse, repeat.
Not only are the canisters "not disposable", they also are not the property of the purchaser of a SodaStream device. Instead, canisters remain property of SodaStream and are licensed to the purchaser.
Seems well within CBS's rights. This isn't a "ban". SodaStream could show the ad anywhere they can convince companies with advertisement space to show it. There is not an inalienable right to air any commercial CBS is given and clearly CBS stands to lose much more from damaging their relationship with customers who consistently advertise with them than the one time payoff from SodaStream. I'll save my outrage this time.
Well, I think this is somewhat tricky. If CBS truly decided on their own to not do this, it is within their rights. If there was any coordination between CBS and a competitor of SodaStream, then things get a lot more questionable.
Much like the CEO of a company selling all shares right before bad news hits is not necessarily illegal. Is a pretty high sign of insider trading, though.
Of course, usually caveats about random internet person possibly being completely confused on some topics apply. (And please, if I am, correct me.)
I'd have to guess that there are significant costs associated with producing a commercial for the Super Bowl, and I'd have to think SodaStream had some sort of arrangement with CBS to air the ad, perhaps even paid for a Super Bowl spot. Even if there aren't breaches of contract, it's still pretty crappy behavior.
This could still work out in SodaStream's favor. The public outrage against CBS and big soda (?) creates the sort of David vs. Goliath dynamic that people gravitate to.
I would've sided more with you if CBS were a cable network, but it uses the public airwaves. That isn't to say that it should be forced to show every ad, but I think it raises the bar needed to refuse an ad.
How does using public airwaves change the bar? I don't see how using tax payer funded spectrum really affects the situation at all. It isn't like it is in the American taxpayers' interest to have an Israeli company's interest put over three American companies' interest.
I don't see how the fact that it's an Israeli company has much to do with it. Sounds like they would have denied the ad it if it were an American company too.
I agree with that even if SodaStream were American CBS wouldn't have aired the ad (which honestly was created to get this exact article published), but I thought the nationality of each company underlined how irreverent using public airwaves are to this particular issue.
The United States Government is involved with guaranteeing to the over-the-air CBS stations certain protections of their frequencies. It is reasonable to make certain demands on them as a result, and certain demands are indeed made. For instance, over-the-air TV is subject to some restrictions on content that cable is not. Similarly, when the phone companies were the beneficiaries of a great deal of funding to get the entire country wired up, and given government monopolies, it was and is reasonable to make certain demands in return.
Personally I don't think rises to the level of requiring the big stick o' government to come smashing down, but opinions can reasonably vary.
>If the SodaStream product is a better “soda idea” than Coke and Pepsi, then shouldn’t it be given a fair shot within any medium it decides to risk its dollars?
They are a private network running on public airwaves. That spends millions on trying to buy legislation, including things like SOPA and PIPA. They are showing the Superbowl, and the NFL has a special antitrust exemption.
Given all that, I don't have any particular problem mandating that they run a fair advertising market.
I might be misunderstanding you, but what is fair here? If I was Coke spending many millions per year with CBS then in a prime spot an advert was played which made CBS a tiny fraction of what I had spent appeared and made fun of my company, if be calling foul. At a bare minimum I'd be calling for some heavily discounted advertising.
In this case I believe a fair market is the fair situation. That is, CBS would sell the advertising without special favor.
I agree that people with privilege get all cranky when upstarts challenge them. And so Coke might cry "unfair!" when somebody with 1/100th of their marketing budget outmaneuvers them. To which I say: boo hoo! Marketplaces exist for the benefit of consumers, not producers.
Playing the devils advocate here as I agree with you: What if Coke walks away from CBS - it wouldn't be very fair from the perspective of CBS as they applied the same rules to everyone, and a lost a massive customer.
CBS probably doesn't care what consumers think, CBS are effectively dumb pipes, and can charge through the nose for their service.
Interesting point. I think that's only a problem if the different TV networks had different standards. If the fair-market setup comes about because the FCC says that anybody who takes broadcast or cable ads has to sell air time fairly, then Coke won't have any incentive to leave CBS for somebody else.
> The EU's highest court ruled in 2010 that Sodastream was not entitled to claim a "Made in Israel" exemption from EU customs payments because of the companies' primary manufacturing plant location outside of Israel in the Israeli-occupied territories West Bank settlement of Mishor Adumim.[68][69][70]
> Sodastream has been criticized for operating a manufacturing plant on land in the West Bank by the Israeli non-governmental organizations Coalition of Women for Peace[71] and Peace Now,[72] as well as other human rights organizations.[73]
They are going through a resurgence, but from what I can tell it is mostly driven by people who want to make healthier carbonated drinks at home (like carbonated water + a bit of juice), not by people wanting to make a cheaper alternative to coke or pepsi at home, who were the main market in the 80s.
I don't think that cost is the main reason for getting this product. It's just convenient to always have soda water here without having to carry it through the city.
I recently bought one for convenience reasons (after i learned about th glass caraves) and am totally happy with it - I guess as more (young) people in the bigger cities don't own a car (and only buy small quantities of food in the supermarket around the corner), more will use products like SodaStream.
Yes, this is it exactly. I have never even bothered to price it out per liter, even if it cost a bit more it would be worth not having to lug bottles of carbonated water home.
At least where I'm from in the US, un-flavored/sweetened carbonated water is a bit uncommon and more expensive. It was a shock to me the first time I visited Europe and was served "fizzy water" when I asked for water. Unless you explicitly ask for "soda water" or a name brand of bottled carbonated water, you'll get uncarbonated water. Also, mineral water does not imply carbonated here.
Everywhere I have lived seltzer water (straight carbonated water, no minerals, salts, sugars, anything) is pretty common, supermarkets almost always have a section of it. Usually you are looking at $0.50-$0.80 per liter if you buy liter bottles, and a bit cheaper if you buy 2-liter bottles.
Pricier than it should be perhaps, but I honestly think I have an addiction to it; I've been drinking carbonated water at home almost exclusively for years. I'm considering getting a professional carbonation setup like a bar might use.
I knew I'd heard the name "SodaStream" before. The other day, walking around in the Castro in SF, I came across a bunch of protestors who were calling for a boycott of SodaStream: http://www.codepink4peace.org/section.php?id=470
As a person who hates the throwaway bottle culture of soda (and the HFCS, etc.), but who also supports middle-east peace, I'm torn here. :-/
On what grounds are you torn? If you don't like the business model of Pepsi / Coca Cola etc, avoid their products. If you don't like what SodaStream does, avoid their products. No one is forcing you to choose?
I got one a few months ago, it's really really nice not having to keep a bunch of bottles/cans/whatever all over the place. The local Target stocks tons of syrups and canisters. It's fantastic that it's cheaper and slightly healthier as well.
Plus I've been experimenting with different mixins, juice, instant tea, that sort of thing.
They seem like a cool company, I've love for them to get more popular.
I've cut back a lot on my diet cola, but I really like fizzy drinks. Seeing the Crystal Light (my goto non-caffeinated drink) and others makes me highly intrigued. The 30 day money back guarantee makes it a certainty.
I hook the bottle full of water up to the soda stream, press the button to shoot in carbonation, and the carbonation just shoots out because the seal isn't airtight. I've tried pressing it short and quick, long and hard, etc. I just can't seem to get it to carbonate properly. Thoughts?
Is there any confirmation of this at all? Did CBS actually "ban" the ad? This all smells a little like viral marketing, coupled with the "act of defiance" posting of a youtube video, as if that is really a defiance of anything.
(on a related sidenote, each year various ad trolls intentionally submit unairable commercials and then post them online claiming that they were censored by the Man. Not only do they get attention, they don't have to pay for the original expensive timeslots either)
The entire tone of this op-ed strikes me as either impossibly naive or full of manufactured outrage. How a Forbes contributor is somehow oblivious to the nature of entrenched (and lucrative) corporate relationships is beyond me.
Not to mention that beneath all the free-market rah-rah chest thumping, he entirely disregards the fact that a private company is quite within their right, laws permitting, to decide with whom they wish to do business.