Come 2015, Keurig is aiming to put its home-brewing business on ice -- all with a little help from one of the biggest beverage brands on the planet, Coca-Cola.
In what could portend a tidal shift for the soda industry, Coke has signed a 10-year agreement with Keurig-maker Green Mountain Coffee Roasters, under which its illustrious portfolio of brands -- including Sprite, Fanta, Minute Maid and many more -- will be developed for use by a forthcoming Keurig Cold at-home beverage device.
Green Mountain will serve as the “exclusive partner for the production and sale of” Coke-branded “single-serve, pod-based beverages,” the company said in a release. “The two companies also will explore other future opportunities to collaborate on the Keurig platform.”
Further cementing the partnership, Coca-Cola acquired a 10 percent ownership stake in Green Mountain -- or roughly 17 million shares -- in a deal valued at $1.25 billion. In response to the news, Green Mountain shares were up 25 percent on Thursday morning. Coke shares were up about 1 percent.
Competitor Sodastream was down as much as 13 percent in after-hours trading yesterday when news of the partnership first broke, but recouped all of its losses and was back in the green when trading opened on Thursday. This might’ve been due to chatter that, in response, Pepsi could snap up the Israel-headquartered company.
Though Pepsi's CEO Indra Nooyi told CNBC today that the speculation was " totally and completely untrue."
The move by Coke “demonstrates our creative approach to partnerships and ability to identify and stay at the forefront of consumer trends driving the industry,” the company’s chairman and CEO, Muhtar Kent, said in a statement.
While the home brew paradigm revolutionized the coffee industry, Keurig is hurrying to bring the technology and open-architecture platform (in which anybody can create pods for use by the system) into other categories.
Last September, the company partnered with Campbell’s Soup to unveil Fresh-Brewed Soup K-Cups that can be made by Keurig coffee brewers in a two-part preparation that includes a broth brewed over a packet of dried pasta and vegetables.
Related: Consumers Fed Up With Canned Soup?