Entrepreneur and CEO of SodaStream Daniel Birnbaum was born in Queens, the youngest of three sons. He made Aliyah to Sde Boker at the age of seven, and from there they moved to Netanya. He studied for an undergraduate degree at Hebrew University, returned to the United States for a master’s degree, and worked there for some time. Today, he lives in Israel, though travels often as the CEO of SodaStream, a company which was seemingly on its last breaths when he arrived, and which he then turned to a leader in the consumer home carbonation market. Here, an exclusive interview with The Jewish Agency's Yael Weiner.
You made Aliyah at a very young age. I’m assuming the decision wasn’t yours?
I’m still at a very young age. Age is a matter of attitude. But I do remember that when my parents decided to make Aliyah, when I was seven years old, this was a family decision. They didn’t throw it on us. My father was a rabbi in the US, and was committed to a congregation there, so we came for a sabbatical year to Israel and then had to return. At the age of 8, I remember, there was no alternative. We felt so strongly at home in Israel, we knew we would always come back.
Were you happy you made Aliyah?
As a child I was happy, but I also realized how much I was leaving behind. Friends, sports, I was very athletic, I played on the baseball team in school. I loved Sundays, the long weekends and camping and family trips, the simple lifestyle, the car, the big house. We came without knowing much, we knew it would be harder here but we were very Zionist. I felt like a halutz, a pioneer, especially when we moved to the Negev. I felt that we are in a military mission almost, to do something brave and much more important than my quality of life as a child. It was the real fulfillment of the Zionist vision we had since birth.
How was the experience of coming to Israel?
The first time we came on a boat, this was the cheapest way of coming to Israel. We came to the Haifa port for the first time, and I saw the lights on the Carmel and I was amazed. I didn’t know there was electricity in Israel, all I knew about Israel was biblical stories, and I thought that everyone lives in tents and works as shepherds. When we disembarked, those who greeted us saw the yarmulkes on our heads and sent us right away to Kfar Chabad, to the ultra-Orthodox absorption center. I remember that I didn’t understand any of the ultra-Orthodox children in the camp there. After around six weeks, we moved to Sde Boker.
So from a very young age you’ve been dabbling in entrepreneurship, yes?
Yes, I was involved in different projects. Even at a very young age, I began selling stones and all different things I found when hiking. I don’t think anyone bought them. In Sde Boker I opened a home-based pizzeria, where you could buy a pizza slice for 30 agorot. And I nseventh gade, I started a kiosk at the Sde Boker municipal pool. Tourists would come to visit on their way south to Eilat, and I would sell them ices and cold beers. I made a deal with the kibbutz tractor driver, he would deliver me merchandise for my kiosk and I I turn would teach him in English. I made enough money that summer than an adult makes in a year. I did this for two seasons, and then we moved to Netanya, where I began learning chazzanut, traditional liturgical singing. Somehow, I absorbed the traditional melodies in synagogue, and in high school they began to pay me for leading Shabbat services. With the years, this kind of work has become quite valuable to me, and for the past twenty years I travel to the United States for the High Holidays with my family, where I lead services as a chazzan.
And during university you also built up businesses, yes?
Yes, I graduated high school in Netanya, and I had several months before my draft. So I traveled to New York and traveled there a bit, staying with my uncle there. I had some free time, so I opened the Yellow Pages and searched—and found a school for dog-grooming. So I went there. When I got back to Israel, I was the first accredited dog-groomer in Israel. I served six years in the Israeli navy, took a captains’ course and was an officer in the submarine unit. After that I began to study economics and management in Hebrew University, and on weekends I would groom. This way I was able to buy myself an apartment, a car, and pay for my tuition throughout my schooling.
When you came to Israel, you worked for a few years for Pillsbury, and then you were successful at Nike, and then you moved over to SodaStream when it was barely surviving. What made you decide to take the risk?
I came to SodaStream through a friend from Harvard. He thought to buy the company and asked me to partner with him in doing due diligence on it. I told him that, for the right price, it might make sense to buy the company, but that I have no idea what he would do with it. He bought it for nothing and called me and asked me to run the company. I decided that I needed a new project and agreed. I took a company that was standing on its last leg, changed the management entirely, transformed the corporate culture, and somehow we made a goal of a billion dollars in sales. We wanted to make a revolution in the world of soft drinks. Now, seven years later, the success is great but we keep reaching higher. There’s plenty to do, and we are very proud.
With all the success, you also receive plenty of criticism.
We have the rights to a factory that I inherited, that for fifteen years has been in Mishor Adumim of the West Bank’s Area C. We decided to use the factory as an opportunity to offer jobs and professional training to local Palestinians, to serve as a bridge for peace. This is how we see our factory, a bridge that connects Jews with Palestinians. We have Jews and Arabs working side by side. Talented workers can move upwards to management positions. I have managers in all the group, everyone follows the same compensation hierarchy. Palestinian employees receive more benefits, because we know the kind of medical insurance that the Palestinian Authority offers, so we offer them and their families additional private insurance. We insure around 5,000 Palestinians, because every employee supports an average of ten others. Our employyes are very appreciative, but they are singular in this. We receive criticism from the right and left, from the right because we employ Palestinians at all, from the left because we are located over the Green Line and in their opinion against international law. But we continue to do this because it is right. The alternative, as we see it, is much worse.
Scarlett Johansen supported you passionately in this struggle. How did you approach her from the beginning?
She came to us. She is a customer of ours for five years already, apparently. Every time that she travels somewhere, she takes a SodaStream appliance with her, because she doesn’t want to waste plastic bottles for environmental reasons. Half a year ago, she was shooting a film in France and brought the SodaStream jet with her but forgot the gas tank at home, so her team got in touch with us, asking where they could find the product in France. My office sent our France office the request, and she received it immediately. I didn’t even know about all this, but then I received a thank you note signed “S.J.” I asked my staff who this was, and that’s how I found about this customer of ours. I asked if I could meet her in Paris, and then we met. She really connected to all the advantages of our product, as a way of improving one’s health, quality of living, and environment, and expressed interest in becoming involved with us. I told her about our factory in Mishor Adumim, and warned her that she may be criticized heavily for getting involved with us. Any company that every worked on a joint project with us suffered from harsh criticism. Scarlett said that in her opinion we are doing the right thing, and that she’s not afraid of criticism. In the end of the story, she really stood up to international pressure and stuck with us, because she believes that we are doing the right thing. She does this from ideology alone, not financial benefit, she doesn’t need our money…
What would you tell the entrepreneurs of the world about opportunities in Israel?
Israel is an amazing country, in technological and business development. There is so much opportunity in engineering and hi-tech. It’s a small country, so it’s easy here to import new ideas here and to transport merchandise too, it’s just simple to make things happen. There are all different kinds of incentives in different places here, there are investors and potential partners who all love fresh ideas. It’s not for nothing that we have so many start-ups here in Israel, but above all, the best incentive we have here is Israelis. There is something in the Israeli genome that makes things possible, that challenges and accelerates innovation and development, it’s something bold, this creativity and fearlessness to take risks…and I can tell you, as someone who has franchises in 45 countries around the world, there is no places like Israel. I would encourage every entrepreneur in the world to look at Israel as an anchor. It’s a phenomenal place.
“SodaStream” is passionate about the environment. Today, a billion plastic bottles are created daily. Of those, only 30% are recycled. That’s awful, these are awful numbers! Plastic is the largest cause for pollution worldwide, because it’s not expendable. And plastic drink bottles are the biggest part of this number. And we use these bottles without thinking twice. We’re here to say: Friends, we don’t need these bottles, and we don’t need the pollution that their factories are creating. Open the tap, make the water into what you want to drink. It’s good for the environment, and it’s good for your health.