In Keurig’s earnings statement, CEO Brian Kelley acknowledged the company was “not pleased with our revenue growth”.
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The main difference between Keurig Kold and the SodaStream, which may come as a relief to many frustrated consumers, is the lack of Carbon dioxide canisters.
The company, best known for its single-serve, pod based coffeemakers, unveiled the “Keurig Kold” Tuesday.
It’s also equipped with a thermal system which cools the drinks so you don’t need to keep your pods refrigerated. For carbonated beverages, the system uses Karbonator beads, which are contained within the pod and hold beverage-grade CO2.
Apart from Coca-Cola and Dr Pepper Snapple brands, the Keurig KOLD portfolio includes Keurig’s brands like Seraphine, FLYTE, Waterful, Red Barn Kraft Soda, Flynn’s Soda Shop and Tierney’s Iced tea.
“The consumer can already can go into a fridge and crack open a Diet Coke”, Terpolilli said. But he predicted it might take another year to determine the machine’s long-term potential. “But I’m probably going to do it anyway”.
Keurig could use a jolt. Until the Kold platform becomes a lot more price realistic for consumers and the future of the soda business becomes clearer, I don’t see Coca-Cola shares outperforming their key rival. However it looks like Keurig has plans to expand beyond just coffee.
The business also recently disclosed a quarterly dividend, which will be paid on Thursday, October 29th.
While the company is betting on the convenience aspect of Keurig Kold, the fact that Coca Cola products are so easily available might impact the sales. Keurig Green Mountain has a one year low of $45.25 and a one year high of $158.87.
The Kold, which was released on Keurig’s website today, will slowly be making its way across brick-and-mortar locations throughout the rest of the month. Their chief concern is that it’s simply too expensive to be widely adopted early on. Meanwhile, The KOLD pods are available at a price range of $4.49 to $4.99 for a four-count box, along with additional drinkmaker accessories. Finally, Vetr lowered Keurig Green Mountain from a “strong-buy” rating to a “buy” rating and set a $60.20 target price on the stock.in a report on Monday, August 10th. “It’s much higher than coffee was”. It also delivers a cold beverage.
Watch out SodaStream, there’s a new soda maker in town. “It’s a very innovative product and they have the right partners, but there are a few drawbacks”.
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This isn’t Keurig’s first stab at producing products other than K-cups of coffee. Mark Astrachan, an analyst at Stifel Financial Corp., warned that Keurig’s coffee sales have almost peaked. “When consumers talk, you listen”, said Kelley. The machine is similar in concept to Keurig’s brewers which does the same thing as Keurig Kold, but with coffee and tea. The expected implementation charges for the fourth quarter of the fiscal year 2015 are $26 million.
