Keurig Sets Sights on Kold

With shares dropping and cuts to its workforce, Keurig Green Mountain looks to get its buzz back.

August 10, 2015

WATERBURY, Vt. – Last week Keurig Green Mountain Inc. released a dismal second quarter earnings report, along with plans to debut its new Kold at-home soda-making machine.

"We are taking decisive actions to adapt and compete more effectively in today's rapidly-evolving, dynamic marketplace," said President and CEO Brian Kelley during an investor's call.

CBS News reports that shares of the company fell as much as 30% on Thursday, after the company reported a hit to its 2Q 2015 sales and planned to cut about 5% of its workforce. Pressure is also mounting to hit it out of the park with the debut of Kold. Coca-Cola has a 16% equity stake in Keurig, stemming from a February 2014 agreement to supply the Coke and Sprite brands for the Kold machine.

Keurig expects that its investment in Kold in will be at least $100 million, according to a press release. Meanwhile, Goldman analysts say rolling out Kold during the holiday season could be Keurig's biggest risk to date.

The news source continues, writing that Kelley says investing in Kold is necessary to ensure a successful debut later this year. "There is a desire to get it out there and get the system started," he said. "And so we believe the investment has been prudent. …We need to have perfect execution."

Kold will join other at-home soda-making appliances such as Soda Stream, which also announced its 2Q 2015 earnings last week. "Our second quarter performance was in-line with our expectations," said the company. Soda Stream partners with brands such as Ocean Spray, Campbell's, EBOOST, Skinnygirl and Sunny D.

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