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Honest Tea marks Coke's first Keurig K-Cup launch

By Ben Bouckley+

03-Sep-2014
Last updated on 03-Sep-2014 at 17:54 GMT2014-09-03T17:54:20Z

Imagine Honest Tea, only in Keurig's K-Cup format... The first such Coca-Cola brand to launch on the platform
Imagine Honest Tea, only in Keurig's K-Cup format... The first such Coca-Cola brand to launch on the platform

Keurig Green Mountain and Coke will roll-out Honest Tea in K-Cups from tomorrow - the beverage giant's first launch in this format since it took a 10% equity stake in Keurig this February.

Honest Tea K-Cups are the first fruit of a partnership signed back in February when the companies signed a 10-year collaboration deal to introduce Coke's global brand portfolio through Keurig's hotly anticipated cold at-home beverage system, which it will launch next year .

That agreement saw Coca-Cola acquire a 10% minority equity position in Keurig, and it subsequently announced that it would up this stake to 16%.

Deryck Van Rensburg, president, Coca-Cola/Keurig Ventures cited growing consumer demand for beverage variety and functionality, and said offering consumers well-known brands in Keurig's hot brewing system was a "natural extension of our strategic partnership while development of our sparkling and still brands for the innovative Keurig Cold at-home system continues". 

Honest Tea K-Cup packs will use only organic and Fair Trade Certified tea, as per the brand's RTD drinks, and the initial launch involves two varieties: unsweetened Just Green and Just Black iced teas.

These will be sold via the Keurig website as part of the firm's Brew Over Ice range, whereby consumers can brew hot beverages over ice using its hot-brewing system.

Mark Wood, senior VP, global hot systems at Keurig, said: "As we began to collaborate with The Coca?Cola Company on the development of their brands for our Keurig Cold system, the opportunity to incorporate certain Coca-Cola brands, like Honest Tea, into our Brew Over Ice selections for our Keurig hot brewing system became an exciting possibility."

However, there was bad news for Keurig Green Mountain on August 21, when Mother Parkers Tea & Coffee claimed it had cracked the code for Keurig's 2.0 brewer, scheduled to launch this fall, enabling consumers to use Mother Parkers copycat pods with the machine.

That company's RealCup capsules carry brands includingMarley Coffee, Martinson coffee, Numi tea, China Mist tea and Higgins & Burke tea, as well as private label brands.

Earlier, on August 7, Sam Reed, CEO of Treehouse Foods said his own company had developed unlicensed pods compatible with the 2.0 system; this after Treehouse filed a lawsuit against Keurig in February accusing it of monopolizing the market for single-serve coffee brewing, and using anti-competitive 'lock out' technology in 2.0.

K-Cups went off patent in 2012, and asked about the threat posed by such unlicensed manufacturers of 2.0 pods (which can sell for 15-25% less) during Keurig's Q3 2014 earnings call on August 6, CEO Brian Kelly refused to comment on "rumors and speculation".

"The 2.0 interactive technology, we are confident in its proprietary nature, we are confident in its performance and we are confident that the Keurig designed and produced beverages will be the ones that work in Keurig 2.0 brewer," Kelly said.

"It's the Keurig 2.0 brewer that allow us to perform consistently, in terms of optimal level, delivering the beverage quality that we want and the consumers demand, so we are not going to comment on the rumors. We have seen them and heard them as well," he added.

"We know the market is competitive, but we are very, very confident in the interactive technology we have and we will stick with that," Kelly said.