Can Pepsi Pivot Away From Soda And Offer Customers Healthy Alternatives?

In the 20th century, Americans guzzled soda by the boatload. Pepsi, Coke, it didn’t matter; soft drinks became the beverages of choice for countless people in all sorts of settings. Whether it was a day at the beach, a night at the movies, or just lounging around the house, everyone loved a good soda. 

Now, though, people are starting to become more conscious about their health, and they’re wary of the massive amounts of sugar in their old favorite soft drinks. This raises a crucial question for the future: How will soft drink companies adapt?

Here’s one possible answer: They can pivot to healthy soda alternatives. For example, The New York Times reported that PepsiCo is investing $3.2 billion into buying SodaStream, the popular manufacturer of home carbonation machines, in an effort to offer their customers less sugary beverages moving forward. Indra Nooyi, Pepsi’s departing CEO, and Ramon Laguarta, who’s now poised to take over, are both on board with the idea of calling more attention to healthier food and drink products. This includes not only seltzer water but also premium bottled water, baked foods, and veggie chips.

“PepsiCo is finding new ways to reach consumers beyond the bottle,” Laguarta said. “Today’s announcement is fully in line with that strategy.” 

SodaStream has been around for more than a century. It was invented in Britain in 1903 by a gin distillery employee who wanted to make his own sodas at home; the brand grew slowly and was sold several times over the years. Most recently, the Israeli beverage company Soda-Club bought SodaStream in 1996. In the last decade, with awareness of healthier drink options on the rise, SodaStream has seen its popularity surge, eventually getting the attention of the execs at Pepsi.

Questions still remain about the long-term strategy at Pepsi. Some shareholders have criticized the company for straying from its original business model (after all, Pepsi is Pepsi-Cola). That’s always been their brand. Nooyi has held strong, though, and she’s been rewarded for her bold business decisions thus far. The New York Times noted that under Nooyi’s leadership, sales at the company have increased by 81 percent.