Coke: Keurig’s cold-drink machine hotter than coffee

Duane D. Stanford
Bloomberg News
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A new Keurig single-serve soda maker due later this year may be a hotter item than the company’s dominant coffee brewer, Coca-Cola Co. Chief Executive Officer Muhtar Kent said.

The device, developed by Keurig Green Mountain Inc. with help from investor Coca-Cola, will allow consumers to mix individual branded soft drinks at home. Keurig will market the devices along with flavor pods that produce a carbonation-inducing chemical reaction when injected with water. Keurig Cold will complement Keurig’s home coffee brewer, which also uses pods.

“It should be a faster development in terms of household penetration than what it took hot brewers to get to currently,” Kent said during a call with reporters.

Soda sales in the U.S. have declined for 10 straight years, hurt by concerns about excess sugar and artificial sweeteners. Technology like Keurig Cold is among the strategies Atlanta- based Coca-Cola will use to keep people sipping while also attracting new drinkers, Kent said. Keurig coffee brewers are in 20 million U.S. households, according to the company.

“It’s all about the choice,” Kent said. “This allows a practicality for consumers to take more choices to their homes, whether it’s mixers or whether it’s sparkling drinks or whether it’s still drinks.”

In May, Keurig will discuss its plans for home and retail testing, as well as for full U.S. distribution through the end of the year, Kent also said.

Kent said he likes what he has seen so far of the machines and pods, including price, materials and design. Kent also said he’s pleased with the “beverage quality,” the most important factor for a company obsessed with keeping its drinks consistent from Atlanta to Myanmar.

Coca-Cola’s hope for Keurig Cold’s success rides on more than the pods. Through an entity it calls Atlantic Industries, Coca-Cola is Keurig Green Mountain’s largest shareholder, with a 16 percent stake. Keurig and the world’s biggest soda maker are working under a 10-year agreement signed in February 2014 to collaborate on the device.

PepsiCo Inc., the world’s second-largest soft drink maker, has so far hedged its bet on homemade soda. CEO Indra Nooyi has said the company is evaluating several in-home makers, including one made by SodaStream International Ltd.

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