Coca-Cola eyes home market in new partnership with Keurig maker
The move will bring the soft drink giant into competition with SodaStream.
Coca-Cola announced a new partnership with Green Mountain Coffee, maker of Keurig single-serve hot beverage machines.
Coke will buy a 10 percent stake in Green Mountain Coffee for $1.25 billion—though the soft drink maker isn’t looking to get into the coffee business. Instead, Coke plans for its company’s products to be featured in Green Mountain Coffee’s new Keurig Cold, set to debut in 2015. The move will position Coca-Cola as a competitor to Israel-based SodaStream, a home carbonization system that offers branded and private label flavored syrups.
For its part, SodaStream seems ready for a fight. Fox Broadcasting asked the manufacturer to edit its 2014 Super Bowl ad featuring actress Scarlett Johansson to omit the final line, “Sorry, Coke and Pepsi,” out of fear it would upset the halftime show sponsor, according to BusinessWeek.
SodaStream’s machines are in 7 million homes—although only about 1 percent of US kitchens sport one. It has deals in place with brands including Kool-Aid, Crystal Light, Country Time and Ocean Spray.
Brian Kelley, chief executive of Green Mountain, says Keurig Cold will deliver carbonated beverages without CO2 cartridges, unlike SodaStream units. Ease of use will also be a differentiator: Customers won’t have to calculate a drink’s required carbonation or syrup because the formulas will be stored in the system. Green Mountain Coffee stock rose over 25 percent the day after the announcement of its partnership with Coca-Cola.