Coca-Cola enters At-Home Soda Market with the Keurig Cold by September 2014 - Why Can't Beat the Real Thing

Well, it looks like Coca-Cola took my advice and decided to get into the At-Home Soda Business, effectively leveraging their massive brand portfolio into the DIY (Do it Yourself) market as noted in “Do It Yourself Coke: Coca-Cola Buys Stake In Keurig Maker Green Mountain Coffee”, published 2/05/2014 @ 5:23PM |13,545 views by Samantha Sharf, Forbes.

This as they’ve purchased a 10% stake in Green Mountain Coffee Roasters, parent company of Keurig, makers of the K-Cup Coffee Machines as stated in the article “Coca-Cola brings soda-making home with Keurig partnership”, published February 6, 2014 10:18 AM PS by Katie Pilkington, CNET News and “Coca-Cola to Let People Make Its Drinks at Home”, published February 6, 2014 (AP) By CANDICE CHOI and SARAH SKIDMORE SELL AP Business Writers, ABC News.

Keurig, quite conveniently, has plans to make their own At-Home Carbonizer similar to the Sodastream Fountain Jet and Seltzer Machines call the Keurig Cold by September 2014. This news of course has naturally sent Sodastream shares plummeting as Green Mountain Coffee Roasters goes bullish on the good news as noted in “GREEN MOUNTAIN UP 40% AFTER COCA-COLA BUYS 10% OF THE COMPANY”, published FEB 5, 2014, 4:31 PM by JULIA LA ROCHE AND LINETTE LOPEZ, Business Insider. 

Apparently shoring up their Developing World Markets isn’t working against Sodastream, their main competitors in this market. So Coca-Cola has decided to go on the offensive by simply partnering with a company that has plans to make their own At-Home Carbonizer to get into the business against the Sodastream Fountain Jet and Seltzer Machines, exactly as I’d predicted in January of 2013 in my blog article entitled “Sodastream At-Home Sodastream Fountain Jet triumphs against Coca-Cola and Pepsi - Fizzy Shakeup coming in the Soda Market as it's obvious that John Dies in the End”.

Keurig Cold advantage in being Cartridge-less – Coca-Cola may change the Carbonizer model

Currently Sodastream, which is hugely popular in Europe and South Africa, isn’t getting the same love despite saving the world from drowning in plastic bottles with their more efficient Soda Distribution model. Still, Coca-Cola’s Brand loyalty is very high, if their Facebook Fan base is anything to go by.

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Put aside the whole idea that Sodas are healthy for you, whether At-Home Carbonized or not, the main thing to watch is their Business model Efficiency. Good to note too that Coca-Cola is a very big brand in the US of A. Coca-Cola is much beloved by Americans in the same way that many Americans are loyal to Apple.

In fact, Apple had bumped them off Interbrand’s popularity list of the most popular brands back in September 2013 as stated in “Apple named the most valuable brand in the world overtaking Coca-Cola to take top spot for the first time”, published 07:43 GMT, 30 September 2013 By HUGO GY, UK Daily Mail and “Apple bumps Coca-Cola to become world's top brand”, published September 30, 2013 12:50 AM PD, published by Stephen Shankland, CNET News.

Sodastream is highly efficient, as they don’t distribute drinks as Coca-Cola does. Rather, they merely service and maintain their army of Sodastream Fountain Jet and Seltzer Machines purchase by customers, mainly involving refilling the Carbon Dioxide (CO₂) Canisters. This, along with the strong brand affinity that Americans have for Coca-Cola, is the reason why Sodastream has found it had to beat Coca-Cola and may be the main reason why their Device hasn’t caught on with Americans.

With that kind of strong Brand presence, Coca-Cola can leverage this built in love for their product to beat Sodastream at their own game and show Americans that they too, are also concerned about the Environment enough to ditch Plastic Bottles. Not to mention breakable Glass Bottles, whose design for their main iconic Soft Drink has seen many iterations throught the years.

But what of the design?

To avoid using Carbon Dioxide (CO₂) Canisters, Coca-Cola’s partner Keurig would have to develop a Carbonizer for their Keurig Cold that can produce CO₂ on demand at the rapid enough pressurization to carbonize drinks. Carbon Dioxide (CO₂) is normally produced in the Lab via the reaction of hydrochloric acid (HCL) with marble chips aka Calcium Carbonate (Ca CO₂) as per the equation below:

2HCl + CaCO₃ --> CO₂ + CaCl₂ + H₂O

This however is impractical, not to mention just plain dangerous. The other method is to basically change up the Distribution model of how the Carbon Dioxide (CO₂) Canisters are refilled. Currently Sodastream Carbon Dioxide (CO₂) Canisters have a proprietary nozzle that only they can connect to and refill, frustrating many that would want to use their product.

Keurig would merely have to design the Keurig Cold with a universal Carbon Dioxide (CO₂) Canister Model so that anyone can have it refilled at any Carbon Dioxide (CO₂) Refilling station, assuming such as thing exists and is commonplace. In so doing, they’d stand to seriously beat Sodastream at their own game by liberating customer from Sodastream very pricey Carbon Dioxide (CO₂) Canister refilling model and thus get more persons into the business of refilling Carbon Dioxide (CO₂) Canisters, creating job downstream.

Keurig would merely make money from the exclusive sale, maintenance as well as distribution of Sachets for Coca-Cola and their other Branded products for customer to make at home alongside their K-Cup Brewed Coffee Beverages. This list of Strong Branded products produced by Coca-Cola is as shown visually below:

Right now if I were Sodastream I’d be trying real hard to make friends with Pepsi Right now. Especially after having pissed them off with that SuperBowl 2014 Commercial, in which the unedited version directly poked Coca-Cola and their rival Pepsi directly in the eye.

Coca-Cola partnered with Keurig will definitely take advantage of the upcoming Keurig Cold product by leveraging their various brands against Sodastream. Sodastream is yet to have any major brands in their product listing that can successfully compete against Coca-Cola.

It’ll be interesting to see if Coca-Cola will distribute the Keurig Cold here in Jamaica via local Distributor Wisynco with whom they already have a deal since November 2010 as noted in “Coca Cola, Wisynco deepen partnership”, Published Sunday November 28, 2010, The Jamaica Gleaner.

They may even have some of their Trade Winds Citrus products Carbonized with the Keurig Cold having recently acquired the company in November 2013 as noted in “Wisynco acquires 50% stake in Trade Winds Citrus”, published Thursday, November 28, 2013, The Jamaica Observer. All good news given their recent troubles with claims of their products being contaminated by a worker with AIDS as noted in “Wisynco Hits Back At ‘Malicious’ Hoax”, Published Friday January 31, 2014 | 8:52 am, The Jamaica Gleaner and “Police deny reports of Wisynco being investigated”, published Friday, January 31, 2014 1:58 PM, The Jamaica Observer.

It’ll be interesting to see how the Fast-Food Industry will react to this, especially Juici-Beef, which has kicked Pepsi to the curb in favour of Coca-Cola since 2012 as noted in “Coke is it!”, published Sunday September 23, 2012 by Sabrina Gordon, Business Reporter, The Jamaica Gleaner.

If this deal goes through, Sodastream may have to find a way to reduce the cost of refilling their Carbon Dioxide (CO₂) Canisters or face the fizzy truth; You just can’t beat the real thing!