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Source: Keurig Green Mountain.
The hypedKeurig Green Mountainand Coca-Cola beverage maker that was supposed to send SodaStream to an early grave is taking a leisurely scenic route through the birth canal.
Keurig Green Mountain is conceding that Keurig Kold won't hit mass retailers until fall 2016, a year later than it was initially promising.
Keurig isn't calling this a delay. In fact, it emphasizes that Keurig Kold will be sold online and through select retailers this fall. It just seems odd how it will take a year between the slow launch later this year and the full retail channel assault ahead of the 2016 holiday shopping season.
Keurig turned heads last year when Coca-Cola invested in the company, signing up to be a partner in the machine that will make chilled carbonated beverages. Keurig Kold will offer eight-ounce servings of Coca-Cola products served at a cool 39 degrees Fahrenheit. Keurig Kold will also crank out seltzers, teas, and cocktail mixers.
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Coca-Cola wound up investing about $2 billion for what was eventually a 16% stake in Keurig Green Mountain. This wasn't only a play for in-home carbonation. Coca-Cola could've acquired all of SodaStream for less than $2 billion. With soft drink sales sliding consistently over the past decade, Coca-Cola has made a splash in new beverage categories, and buying into Keurig was probably more about java than cola.
This is naturally good news for SodaStream, and its stock opened higher on Friday just as Keurig's shares plummeted on the Kold front. A slow and calculated rollout for Keurig's machine will give SodaStream another year to turn things around as it tries to position its machine as a maker of sparkling water instead of merely homemade soft drinks.
Oh, and SodaStream has to turn things around. Stateside sales of SodaStream beverage makers and syrups have been free falling for more than a year. Carbonator sales are still moving higher worldwide -- proof that folks are still using the small water-fizzing appliances -- but SodaStream needs to convince new buyers that its machine will be worth the investment.
That moment could come when Keurig finally hits the market at higher price points for Keurig Kold and more importantly the soda pods. It's highly unlikely that Coca-Cola and Dr. Pepper have made their brands available for a system that would deeply discount their canned and bottled products. Either way, it's not as if this is a stay of execution for SodaStream. It's been doing a good job of generating self-inflicting wounds, and it's been struggling even without Keurig and Coca-Cola in the market. The only benefit that it has now is there's a longer wick sizzling its way to the dynamite stick. SodaStream will need to solve its own problems before it can effectively tackle the Keurig Kold challenge.
The article Keurig Green Mountain Buys SodaStream Some Time originally appeared on Fool.com.
Rick Munarriz owns shares of Keurig Green Mountain and SodaStream. The Motley Fool recommends Apple, Coca-Cola, Keurig Green Mountain, and SodaStream. The Motley Fool owns shares of Apple and SodaStream and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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