• by Karlene Lukovitz  @KLmarketdaily, December 10, 2014

Relationships and developments are getting increasingly convoluted as the action heats up on the latest battlefield between arch rivals Coca-Cola and PepsiCo: the emerging at-home beverage-making market.

This week, SodaStream, which has partnered with PepsiCo on a current, limited test of Pepsi HomeMade — a system enabling consumers to make versions of Pepsi soda brands at home — reported so-far positive consumer response, even as PepsiCo CEO Indra Nooyi publicly criticized the products' flavor. 

“Our existing SodaStream users are excited about the new flavors we are bringing to them through our PepsiCo partnership,” Scott Guthrie, general manager of the Americas for SodaStream, told Beverage Industry on Dec. 8. “We’ve received an overwhelming response from users requesting the flavors in their hometowns, so we are looking forward to the test results and deciding on next steps.”

Guthrie added: "It is hard to tell at this point until we complete the test and evaluate the results, but we are optimistic that these flavor caps will be welcomed by carbonated soft drink consumers.”

On the same day, Nooyi, speaking at a Beverage Digest conference in New York, said the taste of the versions of existing Pepsi and Sierra Mist flavors made with the HomeMade system fall short of the originals, reports Business Insider. "The original Pepsi, the original Sierra Mist, they are all great-tasting products," she said. "When I go to make my own it is very hard to replicate the taste." 

Nooyi said that people "taste the product at home and say it doesn't taste as good as Pepsi," and that the process "takes too long." She also said that to succeed with at-home soda makers, companies should create new flavors rather than try to replicate existing ones, according to Business Insider. 

Six flavors are included in the limited, 10-week test of Pepsi HomeMade that's being conducted in the Tampa and Orlando, Fla. market. Only  one of those, Sierra Mist HomeMade Peach, is a new flavor. The others are HomeMade versions of Pepsi and Sierra Mist and their existing line flavors Pepsi Wild Cherry, Pepsi Vanilla and Sierra Mist Cranberry Splash.

Two flavor-making formats are being sold in Walmart and Bed Bath & Beyond stores in the test markets, reports Beverage Industry: flavor caps ($3.49 for a four-pack) that flavor a 0.5-liter already-carbonated water; and Pepsi HomeMade 0.5-liter bottles ($4.99 for a two-pack) to use with a SodaStream device to make the PepsiCo beverages.

In October, both PepsiCo and SodaStream stressed that their newly announced partnership is, at least for the present, limited to the small-scale test, and that each is exploring opportunities in the home-dispenser sector with multiple other companies.

Strange Bedfellows

Indeed, prior to its test partnership with SodaStream, PepsiCo had already owned a minority stake in Bevyz Global, a Malta-based company that produces a Bevyz-branded machine that makes single-portion servings of a variety of hot and cold beverages. 

Last week, Keurig Green Mountain — which recently attracted a minority stake from Coca-Cola for the rollout of its new Keurig at-home cold beverage-making machine — acquired all outstanding shares of Bevyz Global (Keurig already owned a 15% stake in the company).

According to Capital Ladders research analyst Seth Golden, writing in Seeking Alpha, those Keurig-acquired Bevyz assets "included the portion of the investment which PepsiCo had decided to disconnect."

Golden is among many analysts who have weighed in on the potential pros and cons of that acquisition and the various strategies in play as Coca-Cola and PepsiCo and their partners jockey for advantage in this still-nascent sector. For the present, more complications and twists seem the safest prediction.