Coke+Caribou Coffee...

[pepsipimp]

ATLANTA, Nov 30 (Reuters) - Coca-Cola Co. (KO.N: Quote, Profile, Research) said on Thursday it will link up with Caribou Coffee Co. Inc. (CBOU.O: Quote, Profile, Research) to sell a line of ready-to-drink iced coffees in the United States next summer, moving into a category that is currently dominated by rival PepsiCo Inc. (PEP.N: Quote, Profile, Research) in North America.

Caribou is the No. 2 U.S. specialty coffee company behind Starbucks Corp. (SBUX.O: Quote, Profile, Research). Starbucks has been selling bottled coffee drinks for years in a partnership with PepsiCo. Caribou's shares rose nearly 13 percent in afternoon trading.

Coca-Cola said the Caribou agreement marked the sixth product initiative launched by its North American unit in the coffee, tea and "indulgent beverage" category. Coke and PepsiCo are branching out into noncarbonated drinks as consumers move away from sugary sodas.


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Coke spokesman Ray Crockett said the world's largest soft-drink maker had a big presence in ready-to-drink coffee internationally, selling such beverages in countries such as Japan, Thailand and India.

"The ready-to-drink coffee business in the U.S. is still very small but growing," said John Sicher, editor of industry newsletter Beverage Digest. He said products in the PepsiCo-Starbucks partnership dominate this segment with a 90 percent share.

This year, Atlanta-based Coca-Cola launched a chocolate-coffee drink in the United States called Godiva Belgian Blends under a partnership with Godiva Chocolatier.

"Between Godiva and Caribou, Coke is planting its flag in this category," said Sicher.

Caribou Coffee, based in Minneapolis, has coffee cafes in 17 states, mainly in the upper Midwest, Mid-Atlantic and Georgia. It also sells products to grocery stores and other commercial customers.

With the Coke deal, "the Caribou brand has the potential to be introduced to customers in markets that it isn't currently in with retail stores," said Jennifer Milan, vice president of equity research at Ryan Beck & Co.

"This could be the tip of the iceberg in terms of the opportunity that it could open up" for branded products, she added.

Coca-Cola shares were up 18 cents to $46.82 on the New York Stock Exchange, while Caribou shares were up $1.03 to $9.00 on Nasdaq.


© Reuters 2006. All Rights Reserved.

[CStoreCatMan]

YAWN. Here comes another failed attempt at the coffee category...

Let's see, how many have been out in the past?

Planet Java
Folgers Jakada
Wolfgang Pucks
and more I can't remember...

Yet, Frappuccino has killed EVERY single competitor that has come out in the last 5 years...and its still growing. Good luck Coke, keep trying.

[fusion]

Each of those products had their own problems, imho.

Planet Java had no name recognition. Jakada wasn't pushed enough in single serve - that's where the sales for this type of product are. And those Wolfgang Puck cans were just too damn expensive, and were hot coffee, which you really can't compare with the rest of the brands.

Godiva and Caribou already have brand recognition, though Caribou is limited to the areas where they have stores (none around here).

You also forgot to mention Havana Cappuccino. That stuff has been picked up and dropped by a few distributors around here. Coke has it now, but they don't push it. I've never seen anyone buy it.. and the bottle looks terrible.

[golee1]

Originally posted by fusion:

You also forgot to mention Havana Cappuccino. That stuff has been picked up and dropped by a few distributors around here. Coke has it now, but they don't push it. I've never seen anyone buy it.. and the bottle looks terrible. We just recently dropped Havana here when Godiva's came out. They were dead in the water from introduction.

[CStoreCatMan]

Originally posted by fusion:

Godiva and Caribou already have brand recognition, though Caribou is limited to the areas where they have stores (none around here).
Well yes and no...and you said it yourself. Caribou is limited to where they have stores. There are none here either PLUS I've never even heard of it to begin with. My opinion is that even if Caribou is #2 behind Starbucks, it must be a distant second. Don't know if it will be big enough to compete, especially if it is only known in certain areas.

[fusion]

Coke would be wise to only introduce the brand in areas where Caribou already has a significant presence. I've seen Caribou granola bars from General Mills in stores - doesn't look they are a big seller around here.

[Mr Zabe]

IMO...I would advise Coke to market/sell their new Caribou drink at Caribou stores. I do not think even with heavy promotions such as cross couponing with other Caribou "store" drinks would be successful in attracting initial sales.

IMO Coffee drinkers are a fickle bunch. Brand loyalty appears to be rather strong. I just don't see Caribou as having the kind of brand loyalty (like Starbucks) to support a secondary Caribou drink marketed in grocery stores.

[ 12-01-2006, 07:14 PM: Message edited by: Mr Zabe ]

[popologist]

coke is definitely lagging behind pepsico when it comes to non-carbonated beverages. pepsi will snatch up the #1 seller in a category, and then coke will snatch up some unknown... years later. they really need to get their act together if they really want to compete.

[pepsipimp]

I just find it confusing that they are doing so many partnerships in similar categories. I think they need some type of unification among their lines. They just came out with Godiva Belgian Blends and now they are partnering with Caribou. It would be nice to see some consistency in order to make the connections and build awareness. Has anyone heard how Belgian Blends are doing? The Coke reps here don't really know because they aren't ordering it, it is all coming in from the store warehouses.

[fusion]

The bottlers can sell the single serves, but the 4 packs come through stores' warehouses.

We are doing pretty good with the singles - french vanilla seems to be the best seller, followed by dark chocolate and then milk chocolate.