Bloomberg News

SodaStream Counts on Super Bowl Ads for Sales: Israel Overnight

December 06, 2012

SodaStream International Ltd. (SODA:US), the Israeli maker of home soda machines that is set for the longest stretch of weekly gains since July, is counting on advertising during the Super Bowl and on YouTube to boost revenue.

“We are the anti-establishment brand,” Ilan Nacasch, the chief marketing officer at SodaStream, said in a telephone interview on Dec. 5. “We are challenging the status quo, conscious that moving to SodaStream is a big behavioral change for the consumer. We want to be seen as a rebel, and raise awareness of bottle and can pollution.”

The former marketing executive at Procter & Gamble Co. (PG:US) has overseen the production of commercials and advertising events aimed at portraying the Airport City, Israel based company’s products as environmentally-conscious alternatives to the cans and plastic bottled beverages made by companies from Coca-Cola Co. (KO:US) to PepsiCo Inc. SodaStream will probably report that 2012 sales rose 37 percent to $424.4 million, according to the mean estimate of eight analysts surveyed by Bloomberg.

Shares of SodaStream have gained 0.3 percent this week, poised for a third weekly advance, the longest rally in five months. The stock fell 1.1 percent yesterday to $40. The Bloomberg Israel-US Equity Index (ISRA25BN) of the largest New-York traded Israeli companies was little changed yesterday at 87.39. Mellanox Technologies Ltd. (MLNX:US) rebounded from a five-month low as UBS AG (UBS:US) rated the shares neutral in an initial coverage.

Banned Commercial

The U.K. regulator Clearcast banned a SodaStream television commercial last month showing crates of bottled beverages exploding, sending viewers to Google Inc. (GOOG:US)’s YouTube where the video has gotten more than 1.4 million hits. The publicity generated by the banning, led the company to announce on Dec. 4 that it had bought a commercial to run during the fourth quarter of the Super Bowl on Feb. 3.

“Some would say that any publicity is good publicity but that wasn’t what we were looking for,” Nacasch said in an interview from Auckland, New Zealand, where he had traveled as part of a marketing trip that included Australia. “We would like our message to be heard.”

SodaStream has aired the same commercial in the U.S. and in Europe, he said.

In addition to environmental themes, SodaStream plans to focus on health and wellness in a new U.S. marketing campaign scheduled to begin later this month, Nacasch said, declining to reveal the subject of the company’s Super Bowl spot.

‘Connecting Emotionally’

“Sustainability is the message that really sets SodaStream apart,” Nacasch says. “We’ll look to rotate that with messages about health and convenience as we move toward connecting more emotionally with consumers.”

Israel’s TA-25 Index (TA-25) slipped 0.2 percent yesterday to 1,228.53 as the Tel Aviv gauge fell for the first time in three weeks.

Allot Communications Ltd. (ALLT:US), the developer of technology that helps wireless carriers including AT&T Inc. (T:US) manage traffic, lost 7.6 percent to $18.96 to extend the decline this week to 13 percent. Allot shares traded in Tel Aviv sank 7.5 percent on the week to 77.26 shekels, or the equivalent of $20.2.

Allot is vulnerable to a reduction in wireless-related capital spending next year by AT&T Inc., Verizon Wireless and Sprint Nextel Corp, Jay Srivatsa, the managing director of equity research at Chardan Capital Markets LLC, said. AT&T Chief Executive Officer Randall Stephenson warned last week that a failure to strike a U.S. budget deal will lead to “businesses pulling in investment.”

Mellanox Advances

“The service provider market is clearly weak,” Srivatsa, who has a neutral rating on the shares, said by e-mail from New York yesterday. “Any cut in capex would be a huge setback for Allot.”

Mellanox Technologies Ltd., the maker of technology used to transfer and store data, gained for the first time in eight days, adding 1.6 percent to $68.73 after the stock traded in Tel Aviv increased 0.4 percent to 257.80 shekels, or the equivalent of $67.29.

Steven Milunovich, an analyst at UBS in New York, said in an investor note that while Mellanox remains the leading provider of InfiniBand products, the likelihood that Intel Corp. (INTC:US) will produce similar products in 2014 and 2015 serves as a “dark cloud” on the shares.

Mellanox shares have plunged 19 percent since Nov. 26 on concern that Intel Corp. will take market share from the Israeli comapny’s InfiniBand products.

“We are better at execution” compared with Intel, Mellanox Chief Executive Officer Eyal Waldman said in a phone interview yesterday from Sunnyvale, California. “It will be a challenge for Intel to take some of the design wins.”

To contact the reporter on this story: Leon Lazaroff in New York llazaroff@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at Eobrien6@bloomberg.net


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Companies Mentioned

  • SODA
    (SodaStream International Ltd)
    • $31.98 USD
    • -0.51
    • -1.59%
  • PG
    (Procter & Gamble Co/The)
    • $84.47 USD
    • 0.28
    • 0.33%
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