The company’s profit model had several major parts. First, the company was vertically integrated into the manufacturing of gas cylinders, SodaStream machines, and flavor concentrates. The company counted on economies of scale in its Israeli gas cylinder production facility to keep margins high, Its patented fittings in gas cylinders and the SodaStream machines made it difficult for potential competitors to copy this critical element of the SodaStream system. Moreover, regulations on handling and storing hazardous materials-the CO2 canisters were pressurized-made retailers leery of selling competing cylinders. Second, SodaStream intended to increase both its geographic reach and household penetration of SodaStream machines, which would allow the firm to benefit from the sale of higher-margin consumables to each household with a SodaStream machine in the future. Over time, management expected the company’s already high profit margins to increase as its product mix shifted from low-margin machines to high-margin CO2 refills and flavor concentrates. As part of its move to increase household penetration and encourage repeat purchases of consumables, SodaStream aggressively pursued licensing partnerships with established beverage brand such as Country Time and Crystal Light. The company also formed a relationship with Samsung to sell a line of refrigerator retailed for $3,900 in 2013. Third, SodaStream pursued relationships woth competing home soda machine manufacturers in order to try to establish the SodaStream gas cylinder as the industry standard. As of summer 2013, SodaStream had no significant competitors in the U.S. market.