Wednesday, June 20, 2012

(BN) SodaStream Takes Marketing Tactic to Coca-Cola’s Hometown

SodaStream Takes Marketing Tactic to Coca-Cola's Hometown

June 20 (Bloomberg) -- SodaStream International Ltd. already told Coca-Cola Co. it wouldn't stop using Coke bottles in its marketing. Now SodaStream is taking the fight to the company's front door -- or at least the park across the street from Coke's World of Coca-Cola museum in Atlanta.

On June 22, SodaStream, which sells do-it-yourself soft- drink machines, plans to erect a car-sized cage at Centennial Olympic Park, filled with thousands of used soft-drink bottles and cans. The point: Buying packaged drinks clogs up landfills, while making soda at home helps save the planet.

A similar display at a South Africa airport has drawn threats of a lawsuit by Coca-Cola, the world's largest beverage maker with a market value of about $170 billion, 228 times larger than SodaStream. The upstart uses 30 such displays around the globe to take issue with the waste created by big soda companies.

"No one's going to shut us up with a lawyer's letter," SodaStream Chief Executive Officer Daniel Birnbaum said today in a telephone interview. "Not in South Africa or anywhere."

After SodaStream, based in Airport City, Israel, refused to comply with a lawyer's letter from Coca-Cola dated June 8, Coke hand-delivered a second letter which Birnbaum got this week, he said. Coke went after a display at O.R. Tambo International Airport in Johannesburg and demanded all others be removed, as well, according to the first letter. The company alleged trademark infringement and a breach of local advertising standards.

Reusable Bottles

SodaStream's devices employ reusable bottles, rechargeable CO2 cannisters and tap water, which Birnbaum says are more environmentally friendly. Its products are sold in 42 countries.

"Coca-Cola is a leader in recycling and sustainable packaging as demonstrated by our aggressive goal to collect the equivalent of 50 percent of the bottles and cans we sell globally by 2015," the company said in a statement. Kent Landers, a spokesman, declined to comment further.

The bottle installations coincide with a stepped-up marketing push. SodaStream will run its first global ad campaign in 20 countries in the fourth quarter, at a cost of between $15 million and $20 million, said Yonah Lloyd, executive director of corporate development. The company is also introducing its first automatic electric carbonation appliance, the Revolution, which went into production yesterday, Lloyd said today.

Wal-Mart Sales

SodaStream also will begin a carbon dioxide-exchange program at Wal-Mart Stores Inc. by early July after recently introducing the devices there, Lloyd said. SodaStream's products are now in 2,900 Wal-Marts in the U.S.

The company jumped to a three-month high in New York after Moness Crespi Hardt & Co. said SodaStream products are selling out at Wal-Mart. The number of Wal-Mart stores in the U.S. that are out of stock or have a limited number of the company's soda makers has grown every week since June 4, according to the e- mailed Moness Crespi report dated today.

SodaStream surged 4.4 percent to $37 by 11:58 a.m. in New York, the highest price since March 16. The shares have advanced 13 percent in 2012 and trade at 17.6 times estimated earnings, compared with a 15.8 multiple for companies on the Nasdaq Composite Index.

A major focus for the company next year will be getting CO2 cannisters and flavor syrups into major grocery and drugstore chains, Lloyd said.

"We expect to land some next year," he said.

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