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Coca-cola to let people make its drinks at home

EARNS COCA COLA

NEW YORK (AP) - Coca-Cola is looking to tap into a new market, with plans to let customers make its sodas and other drinks at home.

The world's biggest beverage maker said Wednesday that it's buying a 10 percent stake in Green Mountain Coffee Roasters Inc. for $1.25 billion as part of an agreement to bring its familiar brands into the fast-growing at-home market. Green Mountain is known for its single-serve coffee makers, but is developing a machine for cold drinks as well.

The deal comes as SodaStream makes an aggressive push to make its at-home carbonation machines a fixture in U.S. kitchens. The Israeli company has touted its machines as a cheaper, more environmentally friendly alternative to buying Coke and Pepsi drinks. It advertised in the past two Super Bowls, with its latest ad starring actress Scarlett Johansson. Although it's in just 1 percent of U.S. homes so far, SodaStream has noted that it's in as many as 25 percent of homes in Sweden.

Investors sent Green Mountain's stock soaring and SodaStream's lower after the deal was announced.

In a call with reporters, Coca-Cola CEO Muhtar Kent seemed to play down the idea that the deal might eat into sales of its ready-to-drink bottles and cans.

"This is not a zero-sum game," Kent said, after noting that the Green Mountain machine represented a "real game-changing innovation."

Coca-Cola's decision to team up with Green Mountain also comes as soda consumption in the U.S. and other developed nations continues to decline, in part because of the growing number of options people have in the beverage aisle.

Green Mountain's "Keurig Cold" machine is expected to roll out in the company's 2015 fiscal year, which begins this fall. The company says the machine will let people make sodas, sports drinks and other beverages with the touch of a button.

Jonas Feliciano, a beverage industry analyst for market researcher Euromonitor International, noted that Green Mountain has said its machine will not require CO2 carbonation cylinders that need to be replaced. The inconvenience of having to replace the CO2 cylinders in SodaStream's machines has been seen as a barrier to the company's potential.

As such, Feliciano said the potential of Coke's deal with Green Mountain was "even beyond SodaStream."

Green Mountain CEO Brian Kelley said during the call with reporters that the company planned to "do with cold beverages what has been done with hot tea and coffee."

Before joining Green Mountain in late 2012, Kelley had been a high-ranking executive at Coca-Cola.

Coca-Cola and Green Mountain said they have signed a 10-year agreement. As part of that deal, Coca-Cola, based in Atlanta, will acquire nearly 16.7 million new Green Mountain shares. Green Mountain, based in Waterbury, Vt., said it plans to use proceeds to buy back stock and fund expenses related to Keurig Cold.

Coca-Cola shares were up 1 percent at $37.98. Green Mountain's shares soared 30 percent in after-hours trading. SodaStream shares were down more than 9 percent at $32.40

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Randy February 06 2014 at 11:22 AM

Hmmmm... no CO2 cartridge replacement... guess that means the Keurig unit will contain a carbonator and system to assure the water is neutral in acidity and alkalinity in order to produce a quality beverage. If they have found a price effective way to produce such a machine, which will compete with the Soda Stream unit, then Green Mountain was wise to get Coke in on the leading edge of revolutionizing the take home soft drink business. It is the logical next step to what originally began as consumers taking home quarts of carbonated beverages from drug store soda fountains who first created carbonates soft drinks in 1866

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Louis February 06 2014 at 8:31 AM

Great ,no more cans to save, no more cans period,! As my wife DEMANDS that the cans be washed out before saving, we must spend" tons"on water to wash cans ,that yield maybe $16.00 a bag ,when saved at salvage...YEA NO MORE CANS

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Owen February 06 2014 at 7:19 AM

I"m looking forward to the Diet Coke K-Kup..............

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dawn February 06 2014 at 6:37 AM

i think thats pretty it would certainly ne nice to get eid of all the aluminum cans from all over the house if you had a soda machine in your kitchen

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Glen February 06 2014 at 3:25 AM

What's the cost here. This and other questions are sure to arrive. Will the FDA be involved. What's going to be the popularity; would people invite their friends over for a superbowl party promissing to serve up a glass of Coca Cola?

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Randy February 06 2014 at 11:25 AM

If the obama FDA is involved the regulatory process will take 514 years and end up with thousands of dollars in licenses, permits and inspections from some paper shuffling bureaucrats. Keep the government out of it... they will only screw it up, make it cost 10 times as much as it should and result in a substandard product not worth using as garden fertilizer.

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judy42442 February 05 2014 at 11:47 PM

Be nice to make your own drinks at home. On the outside, all I've been hearing about is the Super Bowl commercial, which I did not see, most are upset about it not including the USA!! I would have to see it to believe it!!! Some are suggesting boycotting Coke!!!

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dickensdenise February 05 2014 at 11:09 PM

this is america.. we have a choice.. coke is as american as apple pie.. next we cant eat pie right?

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Randy February 06 2014 at 11:26 AM

If the aunt esther imitator has her way citizens will only be permitted to consume distilled water and organic arugula.

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vintagemat February 05 2014 at 10:26 PM

Great, another easy way to fatten up and make it easier for lazy Americans to drink this crap. Avoid this diabetes giver at all cost. Screw the machine....big deal.

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CREDO ONE February 05 2014 at 8:47 PM

I Think that this will go.

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antntheo February 05 2014 at 8:27 PM

Good idea....

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