Friday, September 6, 2013

Soup From A Coffeemaker, Anyone? Green Mountain Will Start Selling Campbell Soup K-Cups

If you’ve never looked at your coffee pot as a means of making soup…well, you’re probably like everyone else.

Campbell Soup CPB -2.42% and Green Mountain Coffee GMCR -1.65% Roasters would like to change that mindset. Green Mountain hopes to, ahem, soup up the offerings for its Keurig coffeemaker and will partner with Campbell to sell K-Cups that will create instant soup. Each package would include the ordinary K-Cups as well as packets of dry pasta and vegetables to add to your steaming hot mug of soup.
Hopes are that the first three flavors will come in 2014. No exact date was given, and chicken noodle was the only one of the three flavors mentioned. The companies expect the Campbell K-Cups would be sold with other K-Cups rather than in the grocery-store soup aisle. Campbell CEO Denise Morrison this afternoon described the K-Cups as a reflection of the company’s initiative to expand “into higher-growth spaces.”
Morrison has tried her best to stir the pot at Campbell since assuming the top job in 2011. Not that she had much choice to do otherwise. Campbell’s iconic red-and-white cans don’t sell like they used to–and they've been nudged from their place in American pantries. In response, Morrison rolled back a drive into low-sodium soup (it surprised people and raised questions they hadn't thought about), and Campbell snapped up Bolthouse Farms, which gives the soupmaker access to the fast-growing packaged fresh-food market. Morrison also oversaw the development of 50 or so new products, including soup-in-a-bag to market at young people–a crowd presumably too busy to pour soup from a can into a bowl; instead they would simply need to warm the bag.
Along with soup in a sack, there’s now soup in a … tiny plastic cylinder. Green Mountain has already brought Dunkin Brands and Starbucks SBUX -0.16% on board to sell branded K-Cups, and there’s a concrete reason for Green Mountain to work at cooking up these partnerships. With patent exclusivity gone for the K-Cup, competitors threaten to grind away at Green Mountain’s top place in the $1 billion single-serve coffee market. Green Mountain entered the industry in 2002 when the bean roaster bought 41% of Keurig Inc., a coffee-machine manufacturer, for $14.4 million, and then four years later, bought the rest of Keurig. Sold using a razor-blade model, Green Mountain’s Keurig coffeemakers boosted sales by as much as 65% a year.
Can we even call the Keurig a coffeemaker now? Must we say things like coffee-soup-maker? Apparently, yes.
Reach Abram Brown at abrown@forbes.com.

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