Credit: Shutterstock photoShares of SodaStream International Ltd.SODA gained about 4% after the carbonation system manufacturer launched a new CO2 carbonator exchange pilot program, SodaStream Fizz Concierge, in select locations in the Northeast. The company intends to roll out the program nationally by 2016 end.
SodaStream Fizz Concierge provides customers access to an easy pick-up service from their homes for replacing their exhausted CO2 carbonator cylinders. The program allows customers to place order from their computer, tablet or mobile device. Each order will consist of two new 60-liter CO2 cylinders. To return empty cylinders, customers may use the pre-paid, pre-labeled boxes and schedule a pick-up time and location. Customers participating in the program will earn $30 worth of loyalty points for each return.
The newly launched CO2 carbonator exchange program has a couple of benefits. On the one hand, it encourages the reuse and recycle of used CO2 containers, thereby reducing the company's environmental footprint. On the other hand, it provides SodaStream customers with easier access to new cylinders and entices them with attractive loyalty schemes.
We note that SodaStream is known for manufacturing innovative beverage carbonation systems that can transform ordinary tap water into soft drinks and sparkling water. The company's products are sold at major retail stores like Kohl's, Corp. KSS , Macy's, Inc. M and Bed Bath & Beyond, Inc. BBBY .
The new program should drive demand for SodaStream products, which has been quite weak of late. In fact, this Zacks Rank #3 (Hold) company has been witnessing soft sales in the U.S. over the past few quarters due to low demand for its products, which include soda/sparkling water machines and flavored syrups.
Moreover, the U.S. carbonated soft drink market is struggling due to consumers shifting away from traditional soda, toward more natural, lower-calorie and water-based beverages. In this scenario, introduction of this carbonator exchange program appears strategically sound and should drive top-line growth.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
