"Bubbles for the post-plastic generation," is the mantra of Finnish scaleup, Mysoda, a global challenger in the at-home carbonation industry. With financing help from Nordea, the company has pursued an ambitious growth strategy, with a focus on constantly becoming more sustainable and reducing its carbon footprint.
Helping to “create fizzy moments that don’t recklessly tax the planet’s resources.”
That’s the goal of Mysoda, the Finnish scaleup that launched in 2013 as a challenger in the at-home carbonation industry. Many of the founders were industry veterans, having worked at SodaStream, the global market leader owned by PepsiCo.
Mysoda started with the idea of taking an already green concept – carbonated beverages made at home using tap water, carbon dioxide and flavour concentrates – and making it even more sustainable. That has included producing locally, using wind power and, most recently, in collaboration with Finnish forestry company UPM, launching a new line of wood-based sparkling water makers made from forest industry residues instead of fossil-based plastic.
The company is constantly trying to improve its products and reduce its carbon footprint, says Mysoda COO Jussi Aura.
“Not only are consumers looking for more sustainable products and solutions, it’s also a passion for us – to be more sustainable in everything we do,” he says.
The strategy appears to be paying off. Before the coronavirus pandemic, Mysoda had managed to almost double its sales every year for the past three years. With Nordea as its financing partner, it has pursued an ambitious growth plan, expanding rapidly to new markets across Europe. Mysoda products are currently sold in around 3,000 shops across Europe.
“Homemade is the most local”
The global market for at-home carbonation has taken off in recent years, with environmentally-conscious consumers turning away from single-use plastics. Instead of buying soda in plastic bottles from the store, customers can add bubbles and flavours to their tap water at home, using a sparkling water maker, refillable cylinders of CO2 and drink mixes.
Mysoda decided to take that concept of local even further, questioning why the empty CO2 cylinders needed to be shipped long distances when they could be filled locally. The company started by setting up a CO2 filling station for used cylinders in Helsinki to serve the Nordic markets.
When it entered a deal with retailer Coop in Switzerland in 2019, Mysoda hired a German subcontractor to serve that market. The company is currently building a filling station in France to serve customers there as well as in the Benelux countries.
“That’s our ideology: to be as local as possible. If we get customers in central Europe, we will need to open another factory there,” says Aura.
A need for working capital
The company’s rapid expansion and local focus has required a sizeable amount of capital, according to Aura.
“Nordea has been a good partner for us, backing our investments. We have a really good, open relationship. We share our information, and Nordea has been really flexible with our needs, finding solutions for us,” he says.
Riku Tiainen, a senior relationship manager in Nordea’s Startup & Growth unit in Finland has worked with Mysoda for around a year.
“This kind of business model needs quite a lot of working capital to set up new local production facilities. At the same time, the local operations will allow the company to save costs on shipping and logistics, while also limiting the transport emissions from shipping air and CO2 back and forth,” Tiainen says.
Working with companies in the growth stage, Tiainen says most companies he encounters are giving more thought to how they can be more sustainable, both to mitigate risks and identify opportunities.
“If the end-consumer is buying more sustainable products, shops are too, and all suppliers need to be interested in more sustainable models,” he says.
Staying on top of ESG risks
With a product that’s branded as the sustainable choice, it’s even more critical to stay on top of potential ESG risks from a brand reputation perspective.
“Some people might ask: Are you really that sustainable? As a result, we’re not just doing the minimum. We’re always trying to do more,” says Mysoda’s Aura.
The company describes its bubbles as “guilt free,” coming from the gas residue of industrial plants that’s filtered, cleaned and turned into food-grade CO2. The cylinders are filled using wind energy. Mysoda has even replaced the traditional plastic caps of the CO2 cylinders with ones made of sugarcane. Next will be to find a replacement for the plastic brand label around the cylinder.
Mysoda has also vetted its supply chains, another source of ESG risk. It has used third-party auditors to check the standards of suppliers, such as the company manufacturing the sparkling water makers in China.
“It’s a small investment to avoid any potential problems,” says Aura.
A pioneer for the circular economy
Mysoda has recently taken its level of sustainability another big leap forward, working together with UPM to develop a new generation of sparkling water makers from biocomposite. The wood-based, renewable material looks like plastic but is actually made from residues from the sawmill and pulp industries. That means no additional trees need to be cut down to make the material.
“Bubbles for the post-plastic generation,” the company advertises.
“We haven’t seen any major improvements in the household appliance product category in many years,” says Aura. “We’re proud, as a small company, to be able to bring something new to the table and show the way for bigger players.”
Aura says that within three to four years, Mysoda aims to be local in all major markets in Europe where the tap water is good and it can offer its products. The company is hopeful that its sustainability angle will help it grow in all of those markets.
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