SODASTREAM IS GOING BANANAS

Sodastream shares are spiking in morning trade on Friday after a report in trade publication Beverage Digest said that Sodastream will test some Pepsi-branded products for its at-home soda brewing system.

In late morning trade, Sodastream shares were up as much as 20%.

Following the news, Pepsi shares were up about 0.8%.

In its report, Beverage Digest, citing a source, said the Sodastream test using Pepsi products will involve "major SodaStream customers Wal-Mart and Bed Bath & Beyond" in some Florida markets.

The news was first reported by Bloomberg, which also said a Pepsi spokesperson confirmed it is testing products with Sodastream.

The test, which will be a 10-week test selling some Pepsi-branded products, will involve "naturally sweetened" brands not sold at retail: "Pepsi Homemade" and "Sierra Mist Homemade," Beverage Digest said.

Beverage Digest reports that the actual flavors will be: Pepsi Homemade, Pepsi Homemade Vanilla, Pepsi Homemade Wild Cherry, Sierra Mist Homemade, Sierra Mist Homemade Peach, and Sierra Mist Homemade Cranberry.

Beverage Digest's report also said that Pepsi is looking at "various in-home dispenser opportunities and has partnered with another manufacturer of in-home dispensers, Bevyz, in Europe."

Bevyz is set to launch machines in the US under a partnership with Cuisinart.

And in a regulatory filing, Sodastream said:

Further to press reports that were published today, SodaStream International Ltd. (the "Company") confirms that as the leader of the at-home, make-your-own beverages, category it has entered into an agreement with PepsiCo, Inc. ("PepsiCo") specifically focused on a small-scale, limited time test to make certain of PepsiCo's brands available for use on the Company's system. The limited test is scheduled for later this year. Consistent with the Company's practice to date, the Company is also exploring multiple relationships with other leading beverage brands.

Exceptionally, the Company would like to stress that this is a limited test and that there are currently no discussions between the Company and PepsiCo concerning any other form of broader business collaboration. Following this report and consistent with past practice, the Company undertakes no obligation to provide any updates and will not comment on rumors or speculation.

Sodastream and Pepsi have long been the subject of market and industry rumors, including speculation that Pepsi might one day want to buy Sodastream, but to date nothing has come of that speculation.

Here's the intraday chart showing the huge spike in Sodastream shares after the news broke.