SodaStream targets thrifty Italians with home drink machines

Wed Apr 10, 2013 1:24pm EDT

* Soda machine maker launching new products in Italy

* Aims to reach 25 pct of Italian households in coming years

* CEO says 2013 financial targets conservative

By Antonella Ciancio

MILAN, April 10 (Reuters) - Israel's SodaStream International, whose machines make carbonated drinks from tap water, expects to reach 25 percent of Italian kitchens in the coming years as consumers seek green, trendy and cheaper alternatives to bottled water.

The U.S.-listed group, which also makes flavours, carbon dioxide refills and re-usable bottles, said on Wednesday it was targeting style-conscious customers in Italy with designer machines and local flavours including bitter-sweet "chinotto".

"Globally we are changing the way consumers do beverages around the world and Italy is very much part of that revolution," Chief Executive Daniel Birnbaum told Reuters in an interview.

The company did not provide sales forecasts for the Italian market but said revenues in Europe have grown despite an economic slowdown, helped by the launch of new products which are more friendly on the environment than bottled beverages and are also cheaper after the initial outlay on a machine.

"In the United States they think that Europe is going to hell. But I have explained to them that Europe is not one place, but many countries," Birnbaum said.

The group's sales in Western Europe, which accounts for 44 percent of revenues, rose 33 percent in 2012, the company said.

Birnbaum said the company's forecast for 25 percent growth in global revenues in 2013 was conservative. "It's better to overdeliver, underpromise," he said.

Global sales at SodaStream, which sells at upscale department stores such as Harrods as well as at budget chains like U.S. group Target Corp, have risen more than three-fold since 2009.

The group, which is also investing in a new facility in Israel and expanding in Asia, booked sales of over $436 million last year, with net profits up 18 percent to $44 million.

KITCHEN BATTLE

Birnbaum said he expected Italy to grow like Sweden, where the group has reached a households penetration of 25 percent since 2004. SodaStream entered Italy three years ago, hoping to lure customers away from bottled water to flavoured drinks.

"We are living on the kitchen counter. This one-square foot is the most valuable real estate space in the world and we have to earn the right to be there," Birnbaum said.

The group, whose machines are priced at between 79 euros and 150 euros, said it would target Italian consumers with stylish models, including some covered in wood and stainless steel.

"We don't want to be a cheap brand but a smart alternative," the CEO said.

The company, which estimates 6 million households in 45 countries use its systems, said it aimed to achieve in Italy what Nestle's Nespresso has done with its single-serve espresso machines.

Single-serve coffee brewers, which use coffee-filled cups, promise a barista-quality espresso, cheaper than at the bar but more expensive than a cup made with a traditional moka machine, which uses ground coffee.

SodaStream has also launched "sodacaps", easy-to-use pre-measured flavours to prepare fruit drinks.

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