November 17, 2014 / 8:19 PM / 3 years ago

Coffee maker Keurig's cold drink system to hit shelves in 2015

TORONTO (Reuters) - Keurig Green Mountain Inc., maker of the K-Cup single-serve coffee pod, could introduce its new cold brewing system as early as next spring, the head of its Canadian arm said on Monday, in a challenge to Israeli market leader SodaStream International.

Keurig is betting on a niche market that it says could become bigger than the single-serve hot beverage market. Cold brewing systems enable consumers to make carbonated and non-carbonated beverages at home and use little fridge space.

“Picture yourself literally making a Coke at home,” Stephane Glorieux, head of Keurig Canada, said in an interview. “It terms of (cold) beverage consumption versus the hot platform, you’re talking about four to five times more occasions.”

Glorieux also called a lawsuit alleging anti-competitive practices over its existing coffee brewing machine “without merit.”

Canada’s Club Coffee, which makes cheaper, biodegradable coffee pods that can be used in Keurig brewers, launched a C$600 million lawsuit against the U.S. company last month over the new machine’s “lock-out” technology that makes it more difficult to use non Keurig-licensed K-Cups.

Last week, Club Coffee followed up with a formal complaint to the Competition Bureau of Canada seeking a federal investigation into Keurig.

“We’re very confident that Club Coffee’s complaints are without merit,” Glorieux said.

The Canadian lawsuit came shortly after a U.S. federal judge denied coffee company Rogers Family Co’s request to block the sale of the new Keurig 2.0 machines.

There are 20 million Keurig machines in the United States and three million in Canada, where the household penetration is higher in percentage terms, said Glorieux, who is also overseeing the company’s launch this year into the UK market.

Keurig’s upcoming cold beverage system is being developed with help from Coca-Cola, which became Keurig’s largest shareholder this year when it bought a 16 percent stake in the company.

The cold system will be introduced in “the late part”, or second half, of fiscal 2015, Glorieux told Reuters, but declined to comment on pricing. The company’s fiscal year began in October, putting the second half sometime between April and September.

Keurig shares, which have surged more than 100 percent since the start of the year, were off 38 cents at $153.89 on the Nasdaq on Monday.

Editing by Meredith Mazzilli

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