According to a Wall Street Journal report, Keurig Green Mountain Inc. (GMCR) recently inked a deal with Dr Pepper Snapple Group Inc. (DPS) under which the later will sell pods for Keurig Green Mountain’s upcoming Keurig Cold brewing machine,.
The Keurig Cold machine, expected to be launched in 2015, will use pods to make sodas, sports drinks and other beverages at the touch of a button.
The Keurig Cold at-home beverage system will introduce Keurig Green Mountain to the cold beverage market, which is much larger than that of hot beverage.
Post the Dr Pepper deal, Keurig will have two of the three most popular soda brands in its Keurig Cold brewing machine.
In Feb last year, Keurig Green Mountain inked a 10-year partnership deal with The Coca Cola Company (KO) to exclusively make Coca-Cola branded pods that makes its sodas agreed to work toward the development and launch of the new brewer. (Read: Green Mountain Coca Cola Close Deal)
Reportedly, the cold brewer will be able to serve at least 30 beverage varieties post its launch. The strategic partnership will not only aid the launch but also provide a strong platform for the brewer to grow globally.
Although the terms of the deal were not announced, reportedly Dr Pepper stated this deal prevents it from sharing its carbonated drink brands with SodaStream International Ltd..
Keurig Green Mountain carrying a Zacks Rank #2 (Buy) produces coffees, teas and other hot beverages that are sold in K-Cup and Vue portion packs. These packs are especially made for the single-serve Keurig brewers.
The coffee company has signed several strategic distribution agreements to incorporate popular brands like Dunkin’ Brands Group Inc. (DNKN) and Starbucks Corp. (SBUX) into its portion pack system. After Keurig Green Mountain’s success in the single-serve hot beverage category, the Keurig Cold brewer will mark its foray in the fast growing cold beverage category.
Coffee preferences vary from country to country, while soda and carbonated beverage drinks enjoy a fairly consistent global appeal. As a result, Keurig Green Mountain should be able to target a larger customer base with Keurig Cold than the other Keurig brewers.
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