PepsiCo wants $3.2bn Sodastream acquisition to help it reach people 'beyond the bottle'

The buy could help PepsiCo respond to consumer demand for products that are better for both their bodies and the enviroment / YouTube

PepsiCo is hoping its acquisition of SodaStream for $3.2bn will not only open up fresh ways of getting its products into consumers' homes, but will also advance the group's purpose-driven sustainability push.

Outgoing PepsiCo chief executive Indra Nooyi described the pairing with the Israeli firm – which sells machines and refillable gas cylinders so people can make fizzy drinks at home – as an "inspired match".

SodaStream will now have access to PepsiCo’s capabilities and resources to take the firm to "the next level".

With a range of healthier alternatives to traditional sodas, the purchase should go some way in helping PepsiCo respond to consumer demand for products that are better for both their bodies and the environment.

The move comes as the Mountain Dew owner is trying to strike the balance between pumping marketing spend into its flagship products and promoting healthier products to salve changing consumer appetites.

At the start of this year, PepsiCo said it would "double down" on marketing fizzy drinks brands like its namesake cola and Gatorade, after a focus on less sugary ranges saw its drinks division in the US – which accounts for a third of its business – perform the worst in Q4 of 2017, falling 3%.

'Beyond the bottle'

In recent years, SodaStream's marketing has been focused on its potential as an alternative to single-use plastics.

​Nooyi said that the company's strategy on reducing waste was "well-aligned" with PepsiCo's own 'Performance with Purpose' drive which seeks to deliver long-term growth for the business alongside making "a positive imprint on society and the environment".

To do this, Pepsi has been working on a number of initiatives including a collab with The Recycling Partnership to reverse the decline in US residential recycling rates over the next five years.

PepsiCo exec Ramon Laguarta, who is set to replace Nooyi in the top job come October, said: "SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalysing our ability to offer personalised in-home beverage solutions around the world."

He added that the acquisition dovetailed with Pepsi's strategy to "reach consumers beyond the bottle".

"Today marks an important milestone in the SodaStream journey," said Daniel Birnbaum, SodaStream's chief executive in a statement. “It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world.”

As a business, SodaStream has faced its fair share of controversies.

In 2014 a Super Bowl spot featuring actor Scarlett Johansson was banned by Fox for making reference to both Coca-Cola and Pepsi.

The same ad then caused further furore when criticism was leveled at Oxfam for working with Johansson as an ambassador when she had associated herself with SodaStream. The charity came under fire from pro-Palestinian campaigners because the drinks firm had a factory in a disputed Israeli settlement in the West Bank territory.

The row prompted Johansson to step down from her Oxfam role, citing "a fundamental difference of opinion".

In 2015 SodaStream closed down its West Bank factory and moved to Israel’s Negev Desert.

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