- Coca-Cola has bought a 10% stake in Green Mountain, the manufacturers of the single-serving Keurig coffee machine. The price is $1.25 billion.
- The deal gives Coke's beverages an entry into the fast-growing market for make-it-yourself drinks. Green Mountain already dominates that market for hot beverages, but Israeli start-up SodaStream is the leader in cold drinks.
- The addition of Coca-Cola products for Keurig brewers will also help Green Mountain with one of its biggest challenges — getting consumers to trade in their existing machines for new versions that won't accept unauthorized K-Cups.
Wow! We love this deal so much we could marry it. Just think about this for a second — the biggest innovation in beverages (brew-at-home, single-serving pods) combines with the biggest soft-drink company on earth (Coca-Cola) to create a new machine that addresses Keurig's challenges (unauthorized K-cups and millions of machines that don't need to be replaced yet) and takes on the brand with the most momentum in the beverage world (SodaStream).
The only thing surprising about this deal is that no one seems to have predicted it. And this deal was remarkably predictable. Green Mountain's still-new CEO, who is already making the predictable move to change the company's name to Keurig Green Mountain, is a former executive with Coca-Cola.