Keurig Green Mountain teams up with Dr Pepper on Keurig Cold

By Elaine Watson contact

- Last updated on GMT

Keurig Green Mountain ties up with Dr Pepper on Keurig Cold
Keurig Green Mountain and Dr Pepper Snapple Group (DPS) have struck a deal to develop products for the hotly-anticipated Keurig Cold at-home beverage system, following Keurig’s 2014 deal to work with Coca-Cola on the Cold platform.

As a part of the multi-year agreement, Keurig will be the exclusive producer of single-serve, pod-based carbonated DPS brands utilizing fountain syrup in the Keurig Cold platform in the US and Canada.

Launching in the fall of 2015, Keurig Cold will enable consumers to make cold beverages at home, including carbonated drinks, enhanced waters, juice drinks, sports drinks, and teas.

Premium at-home experiences

Speaking at the company’s Q4 earnings call last year, Keurig Green Mountain CEO Brian Kelley said he expected that Keurig Cold, which will compete with SodaStream (with which Pepsi is working), will penetrate the market significantly faster than its hot beverage counterpart in part by building on the firm’s well-established brand awareness.

“The awareness of the Keurig brand today versus when it launched is obviously significantly different. We have 20 million households out there with the installed​ [hot] base today that have a strong interest looking at the cold system and a number of other consumers who are not in the hot system who want it,​" he said.

Disruptive technology?

While some analysts still need convincing that Keurig Cold will revolutionize the soft drinks market, Kelley said he had no doubt it will be “disruptive​” technology.

The company has not explained how much the capsules will cost or how Keurig Cold works, but said it taps into consumer trends towards customization and would appeal to shoppers that don’t like carrying heavy multipacks of soft drinks home from the store.

”The value will be a little different than it is in the hot beverage platform,” ​explained Kelley in a recent earnings call.

“It's not necessarily that we're going to bring time savings to the process of reaching in the refrigerator and grabbing a cold Coke, or a cold beverage. It's going to be able to deliver a great testing fresh beverage in a very sustainable way and do it in a way that … consumers feel like they're crafting their own beverage.”

Euromonitor International: Keurig Cold has to focus on fun and variety

So what do industry watchers say?

Jonas Feliciano, beverage industry analyst at Euromonitor International, recently told us that the key to the success of Keurig Cold will be fun and variety. “Just focusing on replicating beverages you can buy at the store would be misguided, and pricing would also be an issue, although it’s true that buying pods is easier than carrying a 12-pack of Coke.

“Where it can make an impact is focusing on variety and the fun factor, as quality and convenience - what single serve coffee delivered - is not really the top selling point here.” 

Coca-Cola bought a 10% stake in Keurig Green Mountain in February 2014 and announced plans to raise that stake to 16% in May.

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