Coca-Cola, Keurig Maker Partner on Home Beverage Machine

Cola Giant Makes Sodastream-Style Play in Pact with Green Mountain

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The Coca-Cola Co. is getting into the home beverage-making business.

The soda giant today announced a deal with Green Mountain Coffee Roasters in which the two companies will collaborate on the development of Coca-Cola branded products for use in Green Mountain's forthcoming Keurig Cold at-home beverage system. As part of the pact, Coca-Cola will purchase a 10% stake in Green Mountain, which already markets hot systems that use so-called K-Cups to brew single-serve coffee.

The Keurig Cold single-serve beverage system is under development and expected to hit stores in fiscal year 2015, according to the company. It will use pods to dispense carbonated drinks, enhanced waters, juice drinks, sports drinks and teas, according to the company. As part of the deal, Green Mountain becomes Coca-Cola's exclusive partner for the production and sale of Coca-Cola branded single-serve, pod-based cold beverages. The companies will also explore "future opportunities to collaborate on the Keurig platform" according to a statement.

With the Coca-Cola partnership, "we believe there is significant opportunity to premiumize and accelerate growth in the cold-beverage category by empowering consumers with an innovative, convenient way to freshly prepare their favorite cold beverages at the push of a button," Brian Kelley, Green Mountain's president and CEO, said in a statement.

Muhtar Kent, chairman-CEO of The Coca-Cola Co., said: "This agreement demonstrates our creative approach to partnerships and ability to identify and stay at the forefront of consumer trends driving the industry." He added that by pairing Coca-Cola's "brand leadership and global footprint with GMCR's innovative technology, together we will be able to capitalize on the many exciting growth opportunities in the single-serve, pod-based segment of the cold beverage industry."

The deal comes as Coca-Cola faces new competition from Sodastream, which sells machines designed to turn syrup flavors into sodas at home. The company's marketing, including a recent Super Bowl ad, touts the convenience, health and environmental benefits of the system.

John Sicher, editor and publisher of Beverage Digest, said he doesn't think the Coca-Cola deal is "a response to Sodastream as much as I think it's a response to Green Mountain's success with K-Cups and pods in the coffee business."

"The pod business has been driving growth in the coffee category," he added, while the "soft-drink business has been relatively flat." Consumers, he said, are drawn to the pod systems "because of convenience and because of an interest in cool technology."
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