Friday, March 25, 2011

SodaStream: Reinvigorating a 104 Year Old Firm

I read a great article about SodaStream in Fast Company this month. I had no idea that the firm was 104 years old when current CEO Daniel Burnbaum took over. I thought it was a start-up from the past few years. For those who are not familiar with the company, it sells a countertop machine that enables families to make their own soda. The firm has seen its business skyrocket in the past few years.

What is interesting about the firm's revitalization and growth? Four issues jumped out at me.

1. Burnbaum says, "The first thing we did was change the mind-set of the product from functional to lifestyle -- an object of desire. That kitchen counter is some of the most expensive real estate in the world."

2. They borrowed the concept of a razor-and-blades business model from other industries. They don't just make money off of the machines. They make money off of the CO2 refills, the flavor syrups, and the bottles that they sell. Complementary products are key.

3. They have marketed the green advantage with their product. After all, using SodaStream means not having to buy products from large beverage companies which require all that packaging.

4. The company made their products healthier, capitalizing on the wellness trend.

What a terrific strategy. It really hits on a number of different trends, and it provides a sound economic model for the business.

1 comment:

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