Strauss Group, a global food manufacturer with strong presence in dairy, coffee and chocolate, is developing a water-technology business - and is now developing a home-carbonation device to make soda water in the home. Once launched, Strauss will become a direct competitor to SodaStream International.
Making soda at home is big business, it turns out.
SodaStream is a success story. The company, which makes devices to turn ordinary water into soda, operates in 41 countries and went public on Nasdaq in late 2010 at a market cap of $900 million. True, as of yesterday its market cap had fallen to $876 million, but still. On April 25, Mad Money guru Jim Cramer picked SodaStream, giving it a buy rating. For 2010 SodaStream posted revenues of 160 million euros, an increase of 53% from 2009. Israel, its home base, contributes just 3% of its revenues.
SodaStream has competitors but it's the dominant forces in most places it operates.
Strauss began its foray into the water business in 2007, making filtering and purification systems for tap water. In July 2009 it acquired Tana Industries, maker of the Tami 4 water dispensers that produce filtered, purified water. When Strauss bought Tana, Tami 4 sold 90% of the water dispensers bought in Israel, and faced no real competition.
Recently however the Electra Consumer Products group launched a water dispenser of its own, called "Electra Bar," at an investment of NIS 15 million - promising to be 15% to 20% cheaper than the Tami 4 offering.
Strauss tried to block Electra's launch, motioning the court for a temporary injunction on the grounds that the rival company was violating the Tami 4 patent covering the folding dispensing tray. Electra admitted that the patent had indeed appeared in its prototype, but said it had been removed from the final product. Strauss then withdrew its motion.
Meanwhile, Strauss has turned its attention elsewhere. In October 2010, company chairwoman Ofra Strauss held a press conference together with CEO Gadi Lesin, announcing a water-dispenser venture in China. Strauss Water has allied with the giant Chinese corporation Haier. Each is investing $10 million in building the new venture, which will make, market and sell Strauss Water technology in China, using Haier's marketing system.
Strauss refused to comment for this article, saying it doesn't discuss devices under development.
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