We have banned the headline “X company hopes to become the Keurig for Y” here at The Spoon. But perhaps we should make an exception since it could literally be applied to today’s news that Keurig Green Mountain plans to buy Dr Pepper Snapple Group in a deal valued at $18.7 billion. Will the addition of Dr Pepper make Keurig the, uhhh, Keurig of sodas?
It wouldn’t be the first time Keurig tried to pop into the soda market. In 2015, Keurig launched the Kold to use its pod technology to create name brand sodas, even lining up Coca-Cola as a partner. But the Kold was shut down just ten months later in June of 2016 amidst complaints that the machine was too expensive, too loud, and too big.
By bringing on Dr Pepper Snapple, Keurig now has its own full stack soda solution, as it were, with brands like Dr Pepper, 7Up, Canada Dry Ginger Ale, A&W Root Beer and more. And according to the analyst call Keurig and Dr Pepper held today for the announcement, merging of the two companies will expand distribution opportunities for Keurig into new markets like convenience retail (7-Eleven, CVS, etc.).
But even if the two companies can create new efficiencies and better technology, has the opportunity for a soda spouting Keurig passed? Sugary sodas have been the target of new taxes, and consumption has been declining. Bottled water sales surpassed soda last year, and millennials love their LaCroix, which leads the $2 billion and growing carbonated water market.
Then there are other factors to consider. People are used to putting in some “effort” when it comes to brewing coffee, so popping in a K-cup and waiting is not that big a deal. But is it the same for soda, where people just grab a can and go about their day? Additionally, with the proliferation of same day grocery delivery options, it’s easier than ever to make sure that your soda selection is fully stocked at all times.
Perhaps Keurig will be able to make a more environmental pitch for conscientious consumers. During the analyst call Keurig said it will be expanding the roll out of its recyclable K-Cup pods and is on track to have that completed in the U.S. by 2020.
By then, we’ll see if anyone can become the Keurig of soda machines.