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Soda manufacturer PepsiCo is acquiring SodaStream for $3.2 billion to catch the eye of health-conscious consumers.
SodaStream is an Israel-based company that develops machines used in making carbonated water. The machine allows people to create homemade fizzy drinks, which are healthier alternatives to store-bought beverages like soda.
The acquisition, which is expected to be finalized by January 2019, is PepsiCo’s move to veer away from the company’s image as a soda maker. Once the deal is closed, SodaStream will continue operating on its own and will retain its current management.
The deal is a response to consumers’ shift from soda products to homemade and less sugary options. As a result of this shift, PepsiCo’s sales have declined significantly in North America. With the acquisition, the company is hoping to meet the demand for products that are healthier.
SodaStream CEO Daniel Birnbaum [beern-BAWM] describes the acquisition as a great achievement for his company. PepsiCo’s strengths, such as its marketing and global visibility, will pave the way for the Israel-based company’s expansion.
The acquisition is not PepsiCo’s first initiative to attract health-conscious consumers. In 2016, the company took advantage of the booming bottled water industry and released a high-end bottled water line called LIFEWTR. To drive sales, PepsiCo featured artwork by different artists on the bottles’ labels.
Two years after LIFEWTR’s release, Pepsi debuted “bubly,” a carbonated water brand. Consumers can choose from eight different flavors like limebubly, mangobubly, and cherrybubly. According to a business analyst’s prediction, the product will bring in $100 million worth of retail sales in 2018 alone.