SodaStream – Its All in the Mix

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Talk about turning lemons into … well … fizzy lemonade. Ever heard of the company named SodaStream? It’s a company located in Israel and is a United Nations of workers who, politically, are supposed to be bitter enemies but in reality are a testament to the strength of diversity and finding opportunity in adversity.

SodaStream makes counter-top units that inject bubbles into a liquid turning any drink into a carbonated beverage. Back in 2007, SodaStream was on the verge of bankruptcy, but was bought by a private equity company for $6 million. The new company then hired a new CEO, Daniel Birnbaum, who turned the company around and has achieved incredible results. The path to success in a geographical area that is constantly embroiled in protests, hostilities and sometimes all-out war has been anything but easy.

Early in his tenure, Birnbaum needed to increase sales, so he decided to pick a fight with the mega-drinks bottlers. He accused Coke and Pepsi of bottling pollution, declaring that their throw-away plastic bottles were a threat to the environment and plugging landfills. Though lawsuits were initiated, the publicity made SodaStream a household name and boosted sales to environmentally conscious consumers.

Our story could happily end here but it gets wayyyyy more interesting! With the increase in sales SodaStream needed to hire more workers to staff the production lines to meet market demand. Since only a few Israelis applied for the new jobs SodaStream went looking for workers outside of Israel in the occupied territories of Palestine. This raised more than a few eyebrows in both Israel and Palestine but SodaStream persisted.

Today, SodaStream is a multicultural salad bowl of different factions including a variety of Jewish sects, and ethic groups including Bedouins, Palestinians, Druze, and Black Hebrews. They all work side by side but don’t think for a moment it’s been easy. The workers, well, they get along just fine; the problem is that the various political entities do not. The CEO, who is Jewish, has had to go toe-to-toe with both the Israeli government and the Palestinian authority. Both governments use SodaStream for their own political purposes. The CEO noted, “At times it seems their hate for each other is stronger than their love for their own people”.

Despite the political controversy SodaStream continues to thrive both in business and society. What lessons can we draw from SodaStream that could have some implications for your business?

  1. Adversity is opportunity: SodaStream has consistently positioned itself as the underdog starting fights with large beverage bottlers such as Coke and Pepsi and also with the Israeli and Palestinian governments in an effort to promote social and environmental responsibilities and their business.
  2. Diversity can be a strength: SodaStream hires and promotes based on merit regardless of race, religion, gender, sexual orientation, skin color or political views. Staff are united by a common goal and incentives are based on performance.
  3. Any publicity is always good: SodaStream is constantly in the news either as a solution to the middle east crisis or as an ambassador for the environment. The name is always on someone’s lips.
  4. You can’t fake it: SodaStream fights are real, top of mind and relevant in today’s world. Regardless of your personal view, topics such as the Environment, Peace, Women’s rights and so on are all areas of social concern companies can choose to champion.

Since its original purchase price of 6 million dollars in 2007, the value of SodaStream has increased significantly and is now listed on the NASDAQ. They employ over 1700 people on their Israeli campus from very diverse ethnic backgrounds. However successful the company has become, Daniel Birnbaum would tell you his greatest achievement has been to show the world how to be environmentally responsible and how to achieve peace in the Middle East. Wouldn’t it be nice if more companies could do that!

For more reading:

How SodaStreams Makes and Markets Peace Devin Leonard and Yaacov Benmeleh Business Week Dec 2017

SodaStream Boycott: At West Bank Factory, Palestinian Workers Reveal What They Think About Their Employer; Kate Shuttlworth, International Business Times 02/03/14

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