10 Dec 2015

Weak Sell-through at retailers, higher rebates indicates fad winding down

After Thanksgiving week it became apparent SodaStream’s (SODA) Holiday season was generating substantially less interest among consumers despite beefed up TV and internet marketing. Throughout the 2013 holiday season our proprietary online composite indicated demand was not ramping at the same pace as in 2012. Despite much wider distribution, consumer were doing much less searching online for Sodastream starter kits, they also spent less time browsing different flavors. Perhaps even more concerning was the fact that newer Sodastream products were not among the leader holiday items at key wholesale clients such as Bed Bath & Beyond. We were able to identify similar trends at Target where other holiday novelty kitchen appliances such as the Nutribullet and Ninja blender were seeing stronger demand. The week after Christmas, consumers often search for new products they recieve as gifts or register them. In Sodastream’s case this volume appeared well below similar levels over Christmas 2012. For the first time we also saw significant discounts for the starter kits, at 25% off. Prior to the ICR conference, SODA pre-announced worse than expected results citing both weaker demand and lower sales prices. With investors concerned about the long term viability in the US of carbonated beverage makers, shares dove 25% in just one session.

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