Coke Now Largest Shareholder In Keurig Green Mountain

May 16, 2014

Coca Cola is now the largest stakeholder in Keurig Green Mountain, Inc. formerly Green Mountain Coffee Roasters.

In February the two companies announced an agreement in which Coke purchased a 10 percent interest in Keurig.

The partnership is tied to a new single-serving cold beverage system that Keurig has yet to introduce.

Under the agreement Keurig will have exclusive global rights for Coke products that use the system.

In a filing this week, Coca Cola indicated it will exercise an option to increase its share of the Waterbury company to 16 percent. 

Marc Riddick, a senior analyst with Williams Capital Group, a New York investment bank, says Coke has   reasons to increase its stake in Keurig so soon after the initial agreement.

“They end up getting the benefit of the performance of the shares which have been pretty good, so that might be a portfolio management decision on their part. But it also makes  fairly clear to the market place the level of commitment they have in the relationship,” Riddick says.

Riddick says so far Coke is Keurig’s only beverage partner for the new cold single-serve technology.

He says strong partnerships are key to the success of the new system, and Keurig has a good track record with companies it works with on its K-Cup hot beverage system.

“I’ve never heard anything but very positive feedback from the partners,” he says.

Keurig Green Mountain’s cold beverage single-serve system is expected to be introduced in the company’s next fiscal year which begins in October.

Keurig Green Mountain CEO Brian Kelley is a former Coca Cola executive.