Keurig Green Mountain has signed a development deal with Dr Pepper Snapple to produce carbonated cold beverages for the coffee company’s new at-home beverage maker.
Keurig (GMCR), which plans to launch “Keurig Cold” in the fall of this year, has now inked two major partner agreements to help it generate interest in the device. Nearly a year ago, the company announced a development deal that would result in Coca-Cola’s (KO) products being used in Keurig’s at-home beverage systems. At the time that deal was announced, Coca-Cola also raised its stake in Keurig.
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The single-serve pods are expected to dispense cold beverages, similar to the popular Keurig coffee pods. The company’s cold system is expected to dispense carbonated drinks, as well as juice, sports drinks and teas. The new pact with Dr Pepper (DPS), which is a multi-year agreement, will add another name brand to the system. Keurig will be the exclusive provider of single-serve, pod-based carbonated Dr Pepper brands for the Keurig Cold system in the U.S. And Canada.
The news could potentially worry competitor SodaStream (SODA). While SodaStream has popularized the concept of making carbonated beverages at home, the company has hit a wall in the U.S., where it has been tough for the company to win over new converts in recent months. SodaStream has sought to pivot and market its products for their health and wellness, saying it believes that message would resonate more with consumers. SodaStream has deals with brands like Kool-Aid and Crystal Light, but none of the major traditional soda giants.
For the soda companies, the at-home beverage makers give them another opportunity to get into consumers homes. And that’s important in 2015 as sales of carbonated soft drinks have been falling for years, with the rate of decline worsening of late as consumers turn to juices, flavored waters and other beverage options they deem healthier and generally with fewer calories.
Pepsi (PEP) remains the last hold out for Keurig’s system, and as The Wall Street Journal notes, it could be because Keurig is now part owned by rival Coke.
Terms of the Keurig-Dr Pepper deal weren’t disclosed.