The world's biggest beverage maker is planning to let people make their DIY Coca-Cola and other drinks at home.
Coca-Cola said that it's buying a 10 percent share in Green Mountain Coffee Roasters Inc., famous for its single-serve coffee makers, but is developing a machine for cold drinks as well, for $1.25 billion as part of an agreement to bring its well-known brands into the fast-growing at-home market.
Coca-Cola's assessment to partner with Green Mountain also comes as soda consumption in the U.S. and other developed nations continues to decline for the reason that the growing number of selections people have in the beverage aisle.
Green Mountain's “Keurig Cold” machine is expected to roll out in the company's 2015 fiscal year, which starts this fall. The machine will let people make sodas, sports drinks and other beverages with the touch of a button. Like its coffee machines, the cold machine would use pods to make a selection of drinks.
According to Jonas Feliciano, a beverage industry analyst for market researcher Euromonitor International noted that Green Mountain has said its machine will not require CO2 carbonation cylinders that need to be replaced. The inconvenience of having to replace the CO2 cylinders in SodaStream's machines has been seen as a barrier to the company's potential.
CEO Brian Kelley of Green Mountain said during the call with reporters that the company plans to do with cold beverages what has been done with hot tea and coffee.
Coca-Cola and Green Mountain said they have signed a 10-year contract. As part of that agreement, Coca-Cola, based in Atlanta, will acquire nearly 16.7 million new Green Mountain shares. Green Mountain, based in Waterbury, Vermont, said it plans to use earnings to buy back stock and finance expenses related to Keurig Cold.
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