Keurig Green Mountain Increases Pressure on SodaStream
If SodaStreamthought the Keurig Cold would not pose much of a challenge next fall to its DIY soda dominance, it might need to think again about the competition. Keurig Green Mountain announced on Thursday that it would acquire the parent company of Malta-based Bevyz.
Bevyz might still be somewhat obscure. Its Facebook page has less than 1,100 followers. It has roughly 50 employees and doesn't have a product on the market, though the official website promises pre-orders will start soon.
This doesn't mean the Bevyz machine -- a patented single-portion multidrink system that makes hot and cold beverages -- is vaporware. It has been demoed at trade shows this year, and Bevyz has lined up some interesting partners, including Cuisinart andPepsiCo .
Yes, PepsiCo. Months before the world's second-largest soda company entered into a limited test for SodaStream, PepsiCo announced its support for Bevyz.It was likely a reaction to Coca-Cola taking a minority stake in Keurig Green Mountain in support of the upcoming Keurig Cold rollout,but it now poses an interesting dilemma for PepsiCo. Does it continue to back a platform that is now partly owned by rival Coca-Cola? Does it throw more weight behind SodaStream, possibly considering living up to last year's buyout chatter? Does it back away from the home soda-making market entirely?
The new cola warBevyz isn't worth much. Keurig Green Mountain will pay roughly $220 million for the 85% stake that it doesn't presently own. The press release isn't clear on the intentions. It states that "acquisition strengthens Keurig's technology portfolio." Keurig Green Mountain does emphasize that Keurig Cold is still on track to roll out next fall, but does that mean Bevyz will get shelved, with key patents incorporated into Keurig Cold? The only thing that is clear with this move is that the java heavy is serious about pushing into carbonated beverages in 2015.
Keurig Cold will emphasize K-Cup-like portion packs for cold beverages that incorporate the carbonation process. It's not the fizz and flavor approach that SodaStream has championed, and that's a big reason why Coca-Cola went the Keurig route. It wants consistency in its product, and that will never happen if customers can dictate the carbonation levels and syrup doses as they can with SodaStream machines.
This is an interesting time for Keurig Green Mountain to intensify its efforts to become a pop star. Soda consumption in this country has been falling for years, and SodaStream is suffering double-digit declines in its stateside business. SodaStream might be secretly applauding Keurig's acquisition of Bevyz. The consolidation will help it focus on Keurig Green Mountain as its biggest challenger, and it could very well lead to an expanding relationship with PepsiCo and other soft drink players not named Coca-Cola.
This is war. This is a cola war.
The article Keurig Green Mountain Increases Pressure on SodaStream originally appeared on Fool.com.
Rick Munarriz owns shares of Keurig Green Mountain and SodaStream. The Motley Fool recommends Coca-Cola, Keurig Green Mountain, PepsiCo, and SodaStream. The Motley Fool owns shares of PepsiCo 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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