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Coke and Coffee Maker's Collaboration Causes Social Media Stir

By Jay Jenkins - Feb 13, 2014 at 4:43PM

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Coca-Cola's big investment in Green Mountain Coffee Roasters has the investing community enthralled on social media this week. Here's the scoop and why it matters.

Social media was abuzz last week on news that Coca-Cola (KO -0.65%) has agreed to both invest in and partner with Green Mountain Coffee Roasters (GMCR.DL).

Is Coca-Cola suddenly interested in entering the coffee-business fray? No, not exactly. It's more that Green Mountain is leaving the friendly smells of the coffee shop for the big time that is the cold beverage sector.

Green Mountain is betting its future that it can replicate and exceed its success putting individual-cup coffeemakers in 15 million U.S. households, with a machine dubbed the Keurig Cold. And with a megabrand like Coca-Cola behind it, success suddenly seems much more likely than failure. 

The value of the partnership is clear for Green Mountain -- powerful brands on the platform, access to world-class expertise, distribution, and resources in the U.S. and abroad -- but the positives for Coca-Cola are more subtle.

Coke is certainly looking for first-mover advantage on the assumption that Keurig Cold will eventually become a significant delivery channel for cold beverages. And with $11 billion in cash on the balance sheet as of the most recently available pubic filing, Coca-Cola certainly has the money to write big checks to gain an edge in emerging beverage innovations.

In the video below, Motley Fool contributor Jay Jenkins gives the rundown on Green Mountain, Coca Cola, and PepsiCo (PEP -0.40%) and explains why this is a very big deal for investors.

For more business and investing news trending on social media, "Like" Jay here!

Jay Jenkins owns shares of Green Mountain Coffee Roasters. The Motley Fool recommends Coca-Cola, Green Mountain Coffee Roasters, and PepsiCo. The Motley Fool owns shares of Coca-Cola and PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Coca-Cola Company Stock Quote
The Coca-Cola Company
KO
$62.97 (-0.65%) $0.41
Keurig Green Mountain, Inc. Stock Quote
Keurig Green Mountain, Inc.
GMCR.DL
Pepsico, Inc. Stock Quote
Pepsico, Inc.
PEP
$173.85 (-0.40%) $0.70

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