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Kold and Single Serve Beverage Expansion

Green Mountain Keurig has been one of the hottest performing stocks of the last few years. Keurig and its K-Cup system have sold millions of brewers and billions of capsules to consumers seeking the consistency, variety and ease of preparation that come with pushing a button to make a cup of coffee or tea. While major brand names like Starbucks and Lipton sell K-Cups with their coffee and tea, Keurig has been working with another partner to develop a new line of single-serve drinks that are compatible with its system.

Coca-Cola has placed a large bet on Keurig. It believes consumers will shift away from pouring drinks out of large bottles or cans toward a by-the-cup method. The idea, like that of hot drinks, is to offer a range of beverage options available in smaller capsules that take up less space. The machine will provide the carbonated water needed to mix these libations.

Although the first machines are not yet on the shelves, many analysts are concerned about how they will be received. Initial concerns have been raised about the high retail machine cost as well as the price of capsules relative to cans of soda. Because of these early uncertainties, stock prices are down 40 percent.

The new system is called Keurig Kold. While the holiday season will indicate if consumers are ready to shift their purchasing preferences for cold, carbonated drinks, early feedback is lukewarm.

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