Nestlé could be forgiven for feeling a little bitter this week.
For years, it had jealously – and successfully – kept its Nespresso coffee pod system exclusive: the only way to buy official pods is online or from one of the very limited number of Boutique-styled stores.
This exclusivity has been eroded (but only to a degree – Nespresso is still a strong and premium brand) by the arrival of rival coffee pod systems such as Tassimo and Senseo, and of unofficial pods compatible with the system. What started as a trickle a few years ago has turned into a flood, with Mondelez this week launching Carte Noire Nespresso-compatible pods.
It’s a fascinating and rapidly changing market, but I reckon one of the most exciting developments in the pod drinks field has only a passing connection with coffee – and happened seven days and about four thousand miles away.
From its HQ in Atlanta, The Coca-Cola Company announced it had bought a 10% stake in Green Mountain Coffee Roasters – a business that produces its own coffee pod system, the K-Cup, which is relatively unknown over here. So Coke has a foothold in the hot beverages pod market.
But the really interesting aspect of the deal has nothing to do with hot beverages, but plenty to do with cold ones. For Green Mountain is following up the K-Cup with the Keurig Cold (having acquired hot beverage systems supplier Keurig eight years ago). The Keurig Cold “will use precisely formulated single-serve pods to dispense freshly-made cold beverages including carbonated drinks, enhanced waters, juice drinks, sports drinks and teas in consumers’ homes”.
And, under the deal, Green Mountain and Coke have signed a 10-year agreement for the “development and introduction of The Coca-Cola Company’s global brand portfolio for use in the forthcoming Keurig Cold at-home beverage system”.
As Green Mountain president Brian P Kelley put it: “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.”
In other words – imagine a cross between a Sodastream machine and a Nespresso coffee maker – with the power of brands such as Coca-Cola, Fanta and Sprite behind it.
Sodastream has put together a compelling case for its eco-friendly soft drinks system, and it’s easy to think of the massive benefits that selling drinks in pods rather than bottles would have for Coke (not that anyone is suggesting the company would abandon bottles). Think of the savings in transport costs alone, for example.
We are still a very long way from knowing what the Keurig Cold could mean for soft drinks – and particularly those who sell such products today – but I’m willing to bet it won’t be small beans.