Sources inform ''Globes'' that Strauss Group Ltd. (TASE:STRS) subsidiary Tana Industries Ltd. (which operates under the Tami4 label) is planning to launch a competing product to home seltzer products of Sodastream International Ltd. (Nasdaq: SODA). 18 months after acquiring Tami4, Strauss is adapting Tami4's bottled water dispenser to provide carbonated water, flavored water, and flavored carbonated beverages.
Strauss's plan will directly compete against Sodastream, and its success could affect sales of carbonated beverages and hot beverages.
Strauss plans to market the Tami4 devices in Israel, but sees most of the potential overseas. Strauss saw Sodastream's success in international markets and it sees great potential in developing carbonated beverages.
Strauss acquired Tana Industries for NIS 303 million in October 2009, and merged it with its own water venture H2Q, which has intended to become an important international growth engine for Strauss. Since the acquisition of Tami4, its sales growth has been impressive, rising 20.8% in 2010 to NIS 382 million. Fourth quarter 2010 sales totaled NIS 103 million, 32.4% more than the NIS 78 million for the corresponding quarter of 2009.
Most of Tami4's sales are in Israel, and it has operations in the UK. Strauss is working hard to establish operations in other countries.
Right after the acquisition, Strauss said that it planned to integrate H2Q's water purification technology with Tami4's capabilities as a foundation of Strauss's water business in Israel and other countries. H2Q's technology gives Strauss an edge in emerging markets with drinking water quality problems, such as in China where Strauss has set up a joint venture with Haier Ltd. (HKSE: 1169; SSE: 600690) called Haier Strauss Water Ltd.
Strauss reportedly plans to add the water purification component to Tami4 dispensers, but it is hard to know when this will happen.
Meanwhile Strauss is developing a new Tami4 soda water prototype. The technologies needed are already on the market, and most of the work involves integrating everything into a compact and convenient product.
The creation of flavored and carbonated water reportedly uses a canister placed in the water dispensers, similar to the way coffeemakers work. Several months will reportedly pass before Strauss can market the new Tami4 device. In addition to developing the product, Tami4 will have to set up a gas canister sales and support network.
Tami4 has already tested the market potential in several countries, including Germany, Switzerland, and Sweden. The UK, where Tami4 already operates, also has fairly high soda consumption.
An industry source said, "Europe could be a great success. In general, such a proposal could hurt beverages sales. Some people who currently buy flavored and carbonated beverages may stop doing so."
Strauss said in response that it did not comment on its future plans.
Published by Globes [online], Israel business news - www.globes-online.com - on May 2, 2011
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