Coca-Cola acquires 10% stake in Green Mountain Coffee

Coca-Cola paid $1.25 billion for a 10 per cent stake in Green Mountain Coffee. With carbonated beverage consumption falling in the United States for eight consecutive years, Coca-Cola is looking for ways to stimulate the growth of carbonated drinks.

Green Mountain Coffee said on investors' Day in September 2013 that it would set up a cold drink system. The system will include carbonated drinks, fruit juices, different flavors of water and similar products, which have attracted the interest of Coca-Cola. The contracts between the two companies include that the Krieger Cold drink device will provide Coca-Cola products such as Sprite, Fanta and Maid Source, but did not specify which product.

On the face of it, the partnership seems unusual, but for the two companies, it is likely to produce huge win-win benefits. For Green Mountain Coffee, which is just beginning to expand its international business, this agreement means a strong global distribution network and a strong brand product portfolio. For Coca-Cola, the single-cup coffee maker gives them a new way to attract consumers.

It is reported that the single-cup coffee machine industry has become popular recently. A recent analysis by Bank of America shows that the dollar market share of a single cup of coffee has risen to 30% from 8% three years ago. The Krieger cold drink machine will break away from the hot drink machine and become a stand-alone machine, but the company CEO says it will produce machines that can function as both hot and cold drinks in the future.