Keurig Green Mountain signs deal to make Kraft coffee pods


K-cup coffee pod maker Keurig Green Mountain Inc said it signed a deal to make and sell Kraft Foods Group Inc's coffee in packs compatible with its brewing machines.

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Shares of Keurig, in which Coca-Cola Co has a stake, rose nearly 10 percent at a record high of $128.82. Kraft's shares were down 0.2 percent $57.16 in morning trading.

The Keurig brewing machine popularized the use of pods, or small packets containing coffee, tea or hot chocolate powder, for easy, one-cup brewing of hot drinks.

While the financial terms were not disclosed, Keurig's deal with Kraft is similar to the ones it struck with Nestle SA's U.S. division and J.M. Smucker Co this year.

Following a planned transition period, Keurig said it would exclusively make the Kraft-branded pods, which are expected to be launched in fall this year.

Keurig is lining up licenses with other coffee makers ahead of the launch of new brewing systems, including the Keurig 2.0 and Keurig Bolt, this year. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Savio D'Souza)