Coke's New Keurig Brewing Machine In Every Kitchen

Soda, anyone? Yes, I’ve been dreaming to ask that everytime a certain guest came to my home unannounced, don’t get me wrong but, you know what I mean! Who don’t want to have his own soda fountain at home?

The soda giant announced a $1.25 billion deal last week with Keurig-maker Green Mountain Coffee (GMCR) to put an at-home soda machine in kitchens around the country by 2015. Yes, you’ve read it right folks, an at-home soda machine in your own kitchen! Imagine that! It’s a move that clearly puts a target on the back of SodaStream (SODA), the reigning king of DIY carbonation. SodaStream saw 37% year-over-year revenue growth in 2013, adding $528 million to its coffers.

Green Mountain CEO Brian Kelley said consumers can expect its new soda machine to be similar to Keurig machines, with K-cup pods that will hold Coke-flavored syrups according to an interview with the Wall Street Journal.

"You put a pod in, push a button, and get a drink," he explained.

We’re not 100% convinced consumers will buy into the DIY version, given the fact that all it takes to get your Coke fix today is a few quarters and a little fingernail strength to pop the cap. According to a report by research firm Stifel estimates brewing your own Coke with the new Keurig machine could ultimately cost 2 to 3 times more than picking up a can at the store. That would be bad news!

Neither company has revealed what the cost of the machine will be (reps for Coca-Cola and Green Mountain turned down requests to comment), but we did a little guestimating on our own to figure out how K-cup Coke might compare to SodaStream and regular old six-packs at the grocery store.

We based all of our estimates on an average American who consumes 400 12-ounce cans (4,800 ounces) of Coke per year. 

You can find a SodaStream starter kit, which includes a 60-liter carbon canister and the machine itself, for $80 on If you drink the average of 4,800 ounces of Coke a year, you’d have to replace the canister about two times, costing $28 ($14 a piece).  All in all, using SodaStream will cost you around $358 per year.

On the other hand, Coca-Cola and Green Mountain haven’t released numbers for the soda machine, but it's fairly safe to assume that a Coke system would cost more, given the fact that they will be adding some sort of carbonation mechanism and will need to somehow make the drinks come out cold.  For our purposes here, we'll stick with the basic Keurig price for now, since that's what we know. A basic Keurig brewer today will cost you about $97 on Amazon, but unlike SodaStream, there are no extra parts to refill. You load the machine with tap water and the K-cups do the rest. All in all by purchasing Keurig brewer, you will spend around $497 per year! A little bit harsh isn’t it?

However, by buying in 12-ounce cans, you could only spend around $288 (by the can), $132 (by the 12-pack)!

Want some advice? If you want to save money, leave the SodaMachines and fancy Keurigs for people who don't mind throwing away a couple hundred bucks each year. Canned coke appears to be the most affordable option on the table. SodaStream came in second, costing twice as much as canned soda and about $139 less per year than the presumed cost of the Coca Cola Keurig, even with the added expense of replacing the C02 canister. You could still enjoy the same soda without spending so much, having a machine could be fun though ;-)

Price aside, what Coke’s Keurig has going for it is sheer novelty, which will no doubt help drive sales. And if they can figure out a way to make the new pods compatible with the millions of Keurig machines already in American homes and workplaces today, then that might at least sway some consumers to try it out. If the machine does take off, it could be a very profitable product for both companies.

Mark Sastrachan, an analyst with Stifel, estimates Coke could see 30 cents of revenue on each pod sold, enough to generate $378 million in pod sales in 2016.

Dan de Grandpre, CEO of DealNews, says Coke’s taking a gamble with its foray into the home-soda machine business.

“It's likely that Coke and Green Mountain are gambling that the Coke brand will create a market for this device even if the math doesn't add up,” he says.


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