Pepsico. inc agrees to buy the maker of carbonated-water dispensers for $3.2 billion as consumers shift toward healthier products

the latest move by the cola giant to diversify away from sugary sodas and salty snacks ,Israel-based SODASTREAM makes countertop machines that allow consumers to carbonate tap water and other beverages at home by filling a reusable bottle and flavoring with an array of syrups. The company has in recent years focused on promoting itself as a maker of homemade sparkling water instead of a maker of homemade soda.PepsiCo has been under pressure this year to restructure its North America beverage business amid weak sales of its core brands Pepsi-Cola, Mountain Dew and Gatorade. The sales slump came after the company last year shifted too much shelf space and advertising money to new, healthier brands.

pepsico had previously test- sold its cola with SodaStream machines in a few dozen stores, describing the experience at the time as a learning opportunity

The soda giant’s deal to buy SodaStream comes as consumers shift away from sugary soft drinks towards bottled water. More broadly, big brands are losing shelf space to smaller, trendier entrants and established players are scrambling for growth.

Chief Executive Indra Nooyi, Pepsi has expanded from its cola roots into hummus, kombucha and other healthier products, although results have been mixed. The company has set a target for sales growth out nutrious products to outpace the rest of the portfolio by 2025.

PepsiCo sells the Aquafina and LIFEWTR water brands in the U.S. and earlier this year launched a new brand of sparkling water called Bubly.

Sparkling water has grown far more strongly than the overall bottled water category in the U.S., clocking volume growth of 38% last year up from 35% in 2016 according to data from industry tracker Beverage Marketing Corp. That compares with 7% growth for the overall packaged-water industry, down from 9% in 2016

Growth is being driven by a continued move away from carbonated soft drinks that use sugar or sweeteners and toward healthier, low-calorie drinks that lack artificial ingredients, say analysts. By contrast still, bottled water—a much bigger category—has seen sales slow amid competition from sparkling water, tea, coffee and other beverages.

On Monday, PepsiCo said buying SodaStream would give the company the muscle it needs to expand geographically while helping it accelerate its research and development.