Specialty coffee retailer Keurig Green Mountain Inc. (GMCR) formally announced that it has inked a multi-year agreement with Dr Pepper Snapple Group Inc. (DPS). Under the deal, Keurig to exclusively make Coca-Cola branded pods which can be brewed in Keurig Green Mountain’s upcoming Cold brewer. However, the terms of the deal have not been disclosed.
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.
The deal will make Keurig Green Mountain the exclusive producer of single-serve, pod-based carbonated beverages under the Dr Pepper brands which can be brewed in the Keurig Cold Brewer.
In February last year, Keurig Green Mountain inked a 10-year partnership deal with The Coca Cola Company (KO) to exclusively make Coca-Cola branded pods compatible with its cold brewer and also agreed to work toward the development and launch of the new brewer. (Read: Green Mountain Coca Cola Close Deal)
Per Wall Street Journal, the cold brewer will be able to serve at least 30 beverage varieties. Post the deal, the coffee company will have two of the three most popular soda brands in its Keurig Cold brewing machine.
Keurig, carrying a Zacks Rank #2 (Buy) company 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. Keurig Green Mountain has signed several strategic distribution agreements to incorporate popular brands like Dunkin’ Brands Group Inc. and Starbucks Corp. (SBUX) into its portion pack system. Post the deal, the coffee company will have two of the three most popular soda brands in its Keurig Cold brewing machine.
After Keurig Green Mountain’s phenomenal success in 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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