Nestlé's Shame is SodaStream's Glory

Convershaken Staff
February 16, 2017
 

“There’s no such thing as bad publicity”, the famed circus owner Phineas T. Barnum supposedly once said. SodaStream provides a case in point: the Israeli maker of carbonated drinks machines received a major boost from rivals attacking its recent 'Shame or Glory’ marketing campaign.

SodaStream’s controversial advert features a man being publicly shamed for buying copious amounts of bottled water. The intended recipient, Thor Björnsson - who plays The Mountain on Game of Thrones - tells him off for being wasteful. He then lauds the environmental benefits of SodaStream's flagship machine, compared to purchasing “tens and tens of thousands of plastic bottles”, said CEO Daniel Birnbaum on a recent earnings call.

The scathing indictment sparked challenges from Nestlé - owner of Perrier and Poland Spring - and the bottled water industry. However, their opprobrium has brought the brand “a high level of global media attention and dialogue”, Birnbaum said. 

The 'Shame or Glory' video has been viewed by more than 60 million people and “garnered billions of impressions worldwide at a very, very small expense”, he added. And a recent challenge in Belgian court will give SodaStream "another wave of visibility”. He concludes that “you don’t have to go and invest millions in a Super Bowl ad when you can just tell a simple and true story and let consumers turn it into a viral message".

The consensus appears to be on SodaStream's side. Carbonating drinks at home avoids the environmental costs of carbonating tap water, producing and filling disposable plastic bottles, and transporting the finished product across the country to retail outlets. The same holds true for fizzy drinks, which also have to be bottled in thicker, pricier plastic.

SodaStream and other soda makers use tap water, and source carbon dioxide from industrial operations that produce the gas as a byproduct. Customers can also create cola, energy and fruit-flavoured fizzy drinks by purchasing and adding flavour concentrates. Moreover, they can exchange their empty cartridges of carbon dioxide for fresh ones. And the manufacturer can clean and refill the used receptacles for resale.

The success of the 'Shame or Glory' campaign helped to drive SodaStream's revenue up 17% in the final quarter of 2016, as it sold 941,000 sparkling-water makers - a rise of 22% and the largest volume in two years. Its gross margin also widened to 52.4%, reflecting the roll-out of more profitable machines and a new factory that lowered costs. The upshot was that quarterly operating income more than tripled to a record $18.8m. The soft spot was a decline in flavouring sales, as the company is focusing more on sparkling water to attract health-minded consumers.

SodaStream's bosses are planning to launch similar campaigns this year. The risk is their antagonistic marketing loses its novelty or backfires. For now, they're closer to glory than shame.