SodaStream expands operations in Israel

The soda maker is also launching new flavored capsules, using Israel as the first test market for the new product.

Soda maker SodaStream International Ltd. (Nasdaq: SODA), one of the most successful Israeli companies on Wall Street, launched expanded operations in Israel yesterday. At a press conference in Tel Aviv, CEO Daniel Birnbaum said that the company would invest NIS 4 million in brand development in Israel (a negligible amount for the company) through a series of marketing campaigns on television and billboards. SodaStream picked ad agency Fogel Ogilvy Israel Ltd., run by Edna Maor, for the campaign.

In Israel, SodaStream will sell its latest product, the Revolution, for NIS 799, and a simpler version for NIS 349.

SodaStream is also launching new flavored capsules, using Israel as the first test market. Birnbaum demonstrated the capsules, which are sufficient for a one-liter bottle. The capsule is placed over the bottle's mouth, and with the press of a button, the syrup mixes with the carbonated water.

"Globes": Why choose Israel for the launch of the capsule?

Birbaum: "I wanted to come to the Israeli market with something different. Everyone perceives SodaStream as an old, archaic, product. I needed something innovative to change this perception."

SodaStream previously existed in Israel under its old name, Soda Club. The company sells its product to the Israeli public, but with little investment in marketing or ad campaigns, as the country was not a priority. However, following SodaStream's dizzying success in the US market, Birnbaum is now devoting some of his time to the company's origins.

Why did you decide to launch Israeli activity, and why now? Israel is a small market compared with SodaStream's other markets.

"SodaStream is an Israeli company. It makes sense to operate here."

Besides the slogans, how can a small market like Israel contribute to SodaStream's growth in general?

"True, Israel is a small market, but there are a lot of small markets, similar to Israel, where we operate, such as Slovenia and the Czech Republic. It's true that if SodaStream's management was not based in Israel, we might have rejected the launch by a year or two. For us, this is a strategic market, because SodaStream is an Israeli company."

Israel's soft drinks market, including mineral water and juices, had a turnover of NIS 44 billion (retail) in 2011, and grows by a few percent a year. Coca-Cola is the leading brand, with NIS 636 million in sales last year, Coca-Cola brands have a 14.5% share of the market, and this is the share that SodaStream will try to syphon off.

Published by Globes [online], Israel business news - - on August 29, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

View comments in rows
Update by email about comments talkback
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018