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Target, Best Buy bubbly over SodaStream

Posted by: under Best Buy, Department stores, Retail, Target Updated: January 3, 2012 - 4:44 PM

 

 

What were the most popular gifts this past holiday season?

Hmmm. Well, there was Let's Rock Elmo. And that weird Elf on the Shelf thing. I'm sure iPads made the cut (though someone neglected to purchase me one.)

All worthy entries. But I'd like to make one more suggestion: a home soda machine called SodaStream.

Made by an Israeli company called SodaStream International (NASDAQ:SODA), the device turns ordinary home tap water into tasty carbonated beverages. The company also sells syrups with flavors like cola, lemon-lime and pink grapefruit, along with energy drinks, iced tea and cocktail mixers.

SodaStream first debuted in the United States through Costco but is now available through a hodgepodge of retailers including J.C. Penney, Macy's, and Staples.

The device is apparently a huge hit. In an research note, Monness Crespi analyst Jim Chartier surveyed more than 1,500 stores and reported "widespread stockouts" at retailers like Target and Best Buy. SodaStream shares promptly jumped nearly seven percent to close Tuesday at $34.86.

Is SodaStream just a fad? Perhaps. But it has at least two things going for it.

One: Its distribution system in the United States is quite impressive. When formats as divergent as supermarkets, department stores, discounters, gas stations and electronics retailers are selling the same product, you know you got something big.

Two: SodaStream is marketing its machine as earth friendly. Using ordinary tap water at home precludes the need for plastic bottles. Cities like New York and San Francisco have been trying to curtail the use of bottled water.

Best Buy, in particular, has been trying to position itself as retailer that believes in sustainability. The retailer has increased purchase locations for SodaStream from 700 stores to all 1000.

I suddenly crave soda.

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