Dam About to Break on At-Home Soda Brewing

A look at initiatives that aim to revolutionize the business of CSDs

Steve Holtz, Editor in Chief, CSP Daily News

Keurig Kold

An early look at the Keurig Kold system

OAKBROOK TERRACE, Ill. -- The way at-home soda brewers are ratcheting up their offers, you'd never guess "The Soda Industry is Dying," as NASDAQ declared last week on the heels of a report that carbonated-soft-drink sales were down in 2014 for the 10th year in a row.

Instead, the makers of carbonation machines are ramping up their product plans and their marketing hyperbole.

SodaStream is revamping its CSD offer to include single-serve pods, while Keurig Green Mountain continues its slow but insistent march toward the launch of its Keurig Kold single-serve beverage brewer sometime this fall. At the same, a third entry--the Bonne O--will soon enter the market.

Why the interest in a "dying" market? It's the opportunity to revolutionize the business, to move it to a new level. How much impact any of these efforts will have on convenience-store beverage sales is anyone's guess.

Here's a look at where these three initiatives stand:

Kold Comfort

Keurig Green Mountain has become the dominant name in the single-serve coffee brewing business, which revolutionized the way many consumers drink coffee. It hopes to do the same with Keurig Kold.

Unveiled during the company's presentation at the Consumer Analyst Group of New York (CAGNY) Conference in February, Keurig Kold is on schedule to debut this fall with single-serve pods similar to those used by the company's coffee brewer.

"Our partners, the Coco-Cola Company and the Dr. Pepper Snapple Group are working closely with us in virtually all aspects of the Keurig Kold system in preparation for launch," president and CEO Brian Kelley said during a recent earnings presentation. Several flavors of Snapple teas are already available for use in the Keurig coffee brewer.

With in-home testing and fine-tuning under way, Keurig Kold is expected to launch with "30 beverage varieties across 16 brands, including carbonated soft drinks, craft sodas, ice teas, sports drink, seltzers and flavored waters.

"By the following spring, we expect the Keurig Kold system will offer more than 60 varieties and more than 28 brands," Kelley said.

Streaming Pepsi

Pepsi, meanwhile, has maintained its partnership with SodaStream, currently the largest home-soda brewer on the market. While the current SodaStream unit typically makes 1 liter of soda at a time, the company is working on a machine that produces single-serve beverages.

The next-generation "e-carbonation machine" will "carbonate any liquid and ... provide on-demand single-serve and multi-serve cold sparkling flavored and hot beverages, including coffee all purified and filtered," CEO Daniel Birnbaum said in February.

"This Wi-Fi-enabled internet of things device will produce any beverage you can think of at a touch of a screen providing great value, the responsible environmental footprint and empowering consumer experience as the consumer will control carbonation level flavor intensity and temperature all with a beautiful design representing kitchen jewelry."

The New Name

Finally, the dark horse in this race is the Bonne O, a home-carbonation system that encourages consumers to "create carbonated drinks using fresh, healthy ingredients found in their kitchen."

Rather than use a CO2 tank like the SodaStream, Bonne O (loosely French for "good water") is an electrical appliance that uses disks of citric acid, sodium bicarbonate (baking soda) and fumaric acid to carbonate the water. The system, which will hit the market in May, carbonates beverages in 750-ml bottles.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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