Business

Winnipeg Free Press - PRINT EDITION

New city business bubbles up

Home-carbonation units expected to sell strongly

By: Martin Cash

Posted: 07/13/2012 1:00 AM | Comments: 0

Marta Mikita-Wilson with her SodaStream display at Richardson International Airport. Starter kits sell for $100 to $279. (BORIS MINKEVICH / WINNIPEG FREE PRESS) Photo Store

LAST month, Coca-Cola lawyers in South Africa sent a cease-and-desist letter to officials at Israel-based SodaStream to get the company to shut down its exhibit full of empty soda cans and plastic bottles at the airport in Johannesburg.

But of course, that just made matters worse for Coke. SodaStream put together a cage full of empty Coke cans and set it up near Coke's headquarters in Atlanta.

SodaStream is the world's leading manufacturer of home beverage-carbonation systems, which let consumers convert ordinary tap water into carbonated soft drinks without worrying about waste disposal.

Marta Mikita-Wilson, a Winnipeg businesswoman who owns the exclusive Canadian rights for SodaStream, is proud to have a SodaStream cage exhibit at the Winnipeg airport. She's working on having one at Winnipeg's city hall as well.

"When I got into this business it was not just because of the dollar signs," said the former rehabilitation therapist. "I am so happy to be involved in a product that will do something great for the planet and for people's health."

SodaStream's stylish carbonating systems -- with starter kits selling for $100 to $279 -- are much healthier propositions than the high sugar content of most soda, with an average of 60 per cent less sugar and zero sodium content.

After only two years in the Canadian market, SodaStream's patented carbonating systems, bottles and syrups are in about 1,100 stores.

This week, the product launched in 140 Walmart stores in Canada after last month's introduction of the product in 3,000 Walmarts in the United States.

With just under $10 million in sales in Canada, thanks to prominent shelf space in stores such as the Bay and Sears, Mikita-Wilson's 16-employee Winnipeg operation is looking forward to be in another 1,000 stores by the end of next year.

Canadian sales are doubling every year, in line with the pace of SodaStream's global sales.

SodaStream is deeply entrenched in the European market where it's been for a few decades, and accounts for more than half of the company's total annual sales which are expected to be close to $400 million this year. Its U.S. business is booming.

Mikita-Wilson acquired the exclusive rights to the Canadian market in 2009. It's one of only 16 of the 52 countries in which SodaStream products are available that are not corporately controlled.

"When I went to Israel in 2008, I was a woman on a mission," she said. "At the time, the company was still more concerned about the U.S. market and figured they would let me have Canada and see how it goes."

In a former venture, Mikita-Wilson had the exclusive Canadian distribution rights for the Swiss SIGG water bottle.

She said she believes she's found an even better product with the SodaStream system.

Many others agree. In a recent report, Oppenheimer & Co. analyst Joseph Altobello said he is bullish on the company's performance, which regularly sees better-than-expected results.

The recent rollout in Walmart in the U.S. and Canada is a significant indication of the product's potential for mass appeal.

"It's interesting to note," Altobello wrote, "that this (Walmart launch) marks SodaStream's first rollout at a major U.S. retailer without a trial period, which we believe validates both the category as well as the company's ability to execute."

But, Gary Hemphill, managing director of the Beverage Marketing Corp., New York-based consultants to the $265-billion global beverage industry, sounded a more cautionary note on the product's growth potential.

"Consumers are becoming aware of SodaStream, which has been gaining profile. The environmental benefits of the system may resonate with some consumers. But in general I think consumers want convenience."

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 13, 2012 B4

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required

In which story did you find the error? *
Please post the headline of the story or the title of the video with the error.
What was the error? *
Please post exactly what was wrong with the story.
What should we have written?
Please indicate your source for the correct information.
Who else should we interview to improve this story?
Please include any contact information you may have.
Can we contact you in the future for advice on stories about this topic?
Yes

No
First Name: *
Last Name: *
E–mail Address: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Phone: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Colour:
Are you blue? If you can see this, leave it blank and get some CSS support.
Enter the words that you see: * This is to prevent our forms from being filled out automatically.
You have failed to correctly identify the words in the box above. Please try again.

More Business

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.