Pepsi just made a sparkling new acquisition—carbonated water machine company SodaStream. The move reflects a wave of healthier, low-sugar drinks taking over the beverage sector. As consumers shift toward healthier foods and beverages, legacy firms are adapting their portfolios to take a share in growing categories. Among these have been the water trend—specifically sparkling water—which is healthier than soda, but more interesting than still water.
This trend also supplied the vessel of popularity that turned La Croix into a cult favorite. Pepsi’s rival Coca-Cola announced a sparkling water acquisition last year. A penchant for healthier drinks can also be seen on e-tail giant Amazon’s Best Seller line-up, with juice, water, and sports drink brands owning a large share, according to Gartner L2’s Digital IQ Index: Beverages.
Pepsi’s SodaStream acquisition comes shortly after CEO Indra Nooyi announced her decision to step down this October, but fits the bill in terms of her tenure, with was defined by a lean towards highlighting health-focused products under the brand’s belt. That said, this isn’t the first time Pepsi is indulging in healthier streams of revenue. Previously, it did not make much of a digital effort when it came to water. Despite this, water brands grew, perhaps leading to Pepsi’s recent decision to introduce an online flavor pod system called Drinkfinity that targeted the new online and health conscious consumer and launch its own sparkling water brand, Bubly.
For Pepsi, riding the water wave might be the best thing to do right now. The brand has been in a sales slump for the past four quarters, but diving deeper into water could help keep it afloat as healthier taste buds blossom and competition stiffens in the new environment.