Keurig to Serve Nestle Coffee in K-Cups - Analyst Blog


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Keurig Green Mountain Inc. ( GMCR ) and the U.S. division of Nestle, Nestle USA, have inked a multi-year agreement under which Nestle's Coffee-mate branded coffee with creamer will now be available in K-Cup packs for use on Keurig brewers.

Nestle USA will distribute the flagship Nestlé Coffee-mate 2 in 1 K-Cup packs (hot coffee combining roast and ground coffee with branded creamer) in two flavors - Original and French vanilla. The Nestle Coffee-mate K-cup packs will be available at the online shopping sites of Keurig in fall 2014 and in as grocery, mass and specialty retail channels by spring 2015.

Keurig Green Mountain produces coffees, teas and other hot beverages which are sold in K-Cup and Vue portion packs. These portion packs can be used on its single-serve Keurig brewers for making hot beverages.

Nestle's Coffee-mate, introduced in 1961, offers rich, creamy coffee in 20 flavors with both liquid and powder creamer options.

The deal will boost Nestle's coffee sales as the convenience of Keurig brewers will enhance the popularity of its beverages among Keurig fans. Moreover, the pact furthers Keurig Green Mountain's goal of sustaining its dominance in the single-serve brewing market after the expiry of its K-cup patents in Sep 2012.

Keurig Green Mountain Coffee aims to popularize the single-cup brewing system in America and has signed several strategic distribution agreements to rope in popular brands like Dunkin' Brands Group Inc. ( DNKN ) and Starbucks Corp. ( SBUX ) into its portion pack systems.

Moreover, Keurig Green Mountain is stepping into the world of cold beverage and soda. It will launch The Keurig Cold Machine which will make sodas, sports drinks and other beverages with the touch of a button. Like its coffee machines, the cold machine would use pods to make a variety of drinks.  

In order to increase its brand power Keurig Green has inked a 10-year partnership with the beverage giant The Coca Cola Co. ( KO ). Per the deal, Keurig Green Mountain will exclusively make Coca-Cola branded pods for its Keurig Cold at-home beverage system for making cold beverages. The Cola giant will also work with Keurig Green Mountain on the development and launch of this latest version of Keurig single-cup brewer.

Through these agreements, Keurig Green Mountain carrying a Zacks Rank #3 (Hold) is aligning with the strongest beverage brands to support a range of consumer choices and taste profiles in Keurig single-cup brewing system.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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