Coca-Cola ‘opens happiness’ over new K-Cup investment

Katie Callahan Contributor
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Coca-Cola is challenging SodaStream with an in-home soda maker. Take that, ScarJo.

Coca-Cola announced its ten percent investment Wednesday in Green Mountain Coffee Roasters for $1.25 billion. Already, SodaStream is taking a hit: their shares were down 11 percent while Green Mountain was up 38 percent, the Wall Street Journal reported Wednesday.

However, SodaStream shares rose 10.7 percent Thursday afternoon to $39.61 Forbes reported.

Their 10-year agreement states that the “Coca-Cola company will acquire 16,684,139 newly issued shares … priced at $74.98.”

“By pairing The Coca-Cola Company’s brand leadership and global footprint with GMCR’s innovative technology, together we will be able to capitalize on the many exciting growth opportunities in the single-serve, pod-based segment of the cold beverage industry,” said Muhtar Kent, chairman and chief executive office of the Coca-Cola Co. in a press release. “Importantly, this partnership provides our consumers with a convenient way to enjoy the brands they love through in-home preparation.”

The competition stems from the banned portion of the Super Bowl SodaStream ad which calls out Coke and Pepsi. Israeli-based SodaStream sells in-home soda makers, or carbonation machines with flavored syrups.

While the company’s market is predominantly outside the U.S., SodaStream does have brand names associated with it, including Kool-Aid, Ocean Spray, Crystal Light and Country Time Lemonade, Bloomberg Businessweek reports.

Forbes reports that SodaStream could benefit from a deal with Pepsi, a deal rumored in the past.

“This deal validates the home carbonation category,” Citi analyst Wendy Nicholson wrote in a research note published by Forbes. “We hope SodaStream hurries up and signs an agreement with Pepsi Co (or Dr Pepper Snapple, or crazier yet, Nestle/Nespresso) so that they too can offer premium/popular branded flavors.”

Green Mountain Coffee Roasters owns Keurig coffee makers, but never before have they featured a brand that makes cold drinks.

“In hot beverages, the power of Keurig comes from the fact that we have the world’s best coffee brands on it,” Green Mountain CEO Brian Kelley told Bloomberg Businessweek via phone interview. “So the strength of the Keurig Cold system is that we will have the best cold brands on it, and those are the Coca-Cola brands.”

Green Mountain’s 2015 Keurig Cold machines will now include Coca-Cola K-Cups. Starbucks, Dunkin’ Donuts, and Campbell’s soups are already featured brands, Bloomberg Businessweek reported.