Coca-Cola invests £767m to take on SodaStream

Coke: invests £767m to take on rival SodaStream
Coke: invests £767m to take on rival SodaStream

Coca-Cola is threatening SodaStream's global dominance of the carbonated home-drinks market following its $1.25bn (£767m) investment in Green Mountain Coffee Roasters (GMCR), a company that is developing its own home-based fizzy drinks system.

Coke, which has bought a 10% stake in GMCR, has agreed to allow its drinks brands, including Coke, Fanta and Sprite, to be supplied as the flavours for the GMCR’s Keurig Cold beverage system.

While GMCR develops the technology behind the system, Coke will use its global marketing muscle to push the concept in markets across the world.

The advent of branded Coca-Cola products for use in drinks systems will undermine SodaStream's dominance of the home-carbonated fizzy drinks market. The latter’s customers can currently use a generic cola-flavour rather than a branded product.

GMCR’s single-serve beverage system is being developed and is expected to be available for consumers to buy in 2015.

Brian Kelley, president and chief executive of GMCR, said: "With The Coca-Cola Company as a global strategic partner in our multi-brand at-home Keurig Cold beverage system, we believe there is significant opportunity to 'premiumize' and accelerate growth in the cold beverage category by empowering consumers with an innovative, convenient way to freshly prepare their favourite cold beverages at the push of a button.

"This global relationship combines The Coca-Cola Company’s unparalleled brand, distribution and marketing strengths with GMCR’s innovative technology and beverage system expertise."

News of the partnership, which is expected to be finalised in March, sent SodaStream’s shares down 11% in after-hours trading yesterday, while GMCR's rocketed 38%.

SodaStream and Coca-Cola have a history of being at loggerheads. Last year, SodaStream UK managing director Fiona Hope attacked Coke’s decision to not adopt a new traffic-light labelling scheme unveiled by the UK government.

At the end of last month Hollywood actress Scarlett Johansson terminated her relationship with Oxfam after being criticised about her endorsement of Israeli-based soft drinks firm SodaStream.

Johansson appears in a SodaStream TV ad that was due to be shown during this weekend’s Super Bowl in the US, but was banned by broadcaster Fox due to the inclusion of the line "Sorry, Coke and Pepsi".

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