Coca-Cola signs deal with Green Mountain
Coca-Cola partnering with a coffee roaster? They couldn’t get Nespresso, so they bought a stake in the U.S. company Green Mountain instead? Wrong guess. The transaction, which was announced on 10 February 2014, has got nothing to do with hot drinks. It’s all about cold drinks in capsules. Coca-Cola will pay USD 1.25 billion (EUR 913 million) for a 10 percent stake in coffee roaster Green Mountain in order to expand Green Mountain’s “Keurig Cold” capsule system globally.
Keurig Cold is designed to dispense carbonated beverages, energy drinks, teas, sports drinks, enhanced waters, and more. Initially, the coffee maker will produce “precisely formulated” single-served pods for Coca-Cola’s cold beverages. The partners said they also planned to “explore further opportunities to collaborate on the Keurig platform.”
To date, Green Mountain is said to have sold more than 30 million machines for use in homes, offices and other locations.
The partnership is clearly a shot at SodaStream International, the Israeli manufacturer of home fizzy-drink dispensers. I did not know that it was still going strong. I thought it had gone the way of Sipholux, a bottle that created soda water when charged under pressure with carbon-dioxide gas, which all Israeli newly-weds were given for a present circa 1973. As the UK satirist Ron Liddle jibed, “SodaStreams were pretty useless, weren’t they? You got this thick sludge of uranium sulphide, or something, at the bottom of the glass and your parents never remembered to buy new gas canisters.”
SodaStream made headlines globally after this year’s Super Bowl exciter involving the actress Scarlett Johansson and the UK charity Oxfam. The “scandalette” diverted attention from the fact that SodaStream’s management expects 2013 full-year revenue (ending 31 December 2013) to hit USD 562 million, representing 29 percent growth. While that may sound impressive, it’s about half the pace of growth from the prior year. SodaStream booked 51 percent revenue growth in the previous year.
Perhaps Coca-Cola’s investors should be mildly concerned about the slowing pace of growth for at-home soda machines.
