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SodaStream’s path to its $3.2 billion Pepsi deal

The future of soda is carbonated water.

Two women participate in a blind taste test to see whether they can tell which soda water is which.
Can people tell the difference in taste between sparkling water brands?
John Sciulli/Getty Images for SodaStream USA
Rani Molla is a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.

As Americans try to eat healthier, junk-food brands are trying to become healthier, too. That’s part of the rationale behind Pepsi’s $3.2 billion purchase of refillable seltzer water maker SodaStream.

While PepsiCo is expected to grow 2.3 percent this year, SodaStream recently increased its growth forecast for 2018. It now expects to grow 23 percent this year, up from its previous projection of 15 percent growth.

SodaStream brought in a record $171.5 million in revenue last quarter, most of which came from the sale of carbon dioxide capsule refills, reusable bottles and flavorings. Large refill capsules can cost $60 before deposit refunds.

Sales of SodaStream had fallen off after 2013, thanks to competition from cheaper, pre-packaged soda waters, but have since more than recovered thanks to overall growth in the carbonated water category.

Here’s the same chart but with the data averaged over the past 12 months so there aren’t seasonal swings.

SodaStream sales reflect a broader move toward non-sweetened carbonated water as the sale of sugary drinks — like Pepsi — has stagnated.

Since 2008, U.S. sales of carbonated bottled water has grown 129 percent and flavored bottled water — which includes flavored carbonated water like La Croix — has grown 91 percent, while soft drink sales overall grew just 19 percent, according to Euromonitor International.

In 2017, unflavored carbonated bottled water sales grew more than 10 percent; soft drinks — essentially all non-alcoholic beverages — rose 1.6 percent.

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