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PepsiCo buys SodaStream for £2.5 billion
Fizzy drinks giant PepsiCo has snapped up sparkling water maker SodaStream for £2.5 billion in a bid to engage with health conscious consumers who are shunning sugary drinks and alcohol.
As part of the deal PepsiCo will buy all outstanding shares of SodaStream. The takeover has already been approved by the boards of both companies and the deal is expected to be finalised next January.
Founded in the UK in 1903, SodaStream became a subsidiary of Cadbury Schweppes in 1985 and was bought by Israeli firm Soda-Club in 1998.
The company is famous for its soda syphons that allow people to make their own flavoured sparkling waters at home by releasing carbon dioxide from a pressurised cylinder.
SodaStream has repositioned itself to appeal to health and environmentally conscious millennials who are are turning their backs on both sugary drinks and alcohol in favour of flavoured water and non-alcoholic beers, wines and spirits.
Keen to branch out “beyond the bottle”, PepsiCo is hoping the SodaStream acquisition will help the company engage with millennials in their own homes.
The SodaStream deal is PepsiCo’s first big acquisition since CEO Indra Nooyi revealed she would step down in October after 12 years at the helm of the firm.
PepsiCo president Ramon Laguarta said SodaStream was “highly complementary and incremental” to Pepsi’s business.
According to Euromonitor, bottled water sales rose 6.2% annually in the five years to 2017, while carbonated soft drinks sales were flat.
Sales of beers between 0.5 to 1.2% are up by 20%, while the value of non-alcoholic wine market rose by 66% last year according to Kantar.
According to a recent report by Accolade, 20% of UK adults are teetotal.
London bars like Dandelyan and Nine Lives are responding to this rise in abstinence by developing sophisticated non-alcoholic cocktail offerings.
Last month a booze free ‘Mindful Drinking Festival’ organised by Club Soda took place in Spitalfields featuring 50 non-alcoholic drinks brands for adults, from Fever-Tree tonic and non-alcoholic ‘gin’ Ceders to alcohol free wine Eisberg.
Non-alcoholic spirit Seedlip, one of the first of its kind to hit the market, recently released an orange expression and opened an office in the US.