U.S. markets close in 6 hours 13 minutes
  • S&P 500

    +20.20 (+0.48%)
  • Dow 30

    +112.22 (+0.32%)
  • Nasdaq

    +107.75 (+0.79%)
  • Russell 2000

    -0.44 (-0.02%)
  • Crude Oil

    -0.36 (-0.56%)
  • Gold

    +15.30 (+0.84%)
  • Silver

    -0.08 (-0.28%)

    +0.0048 (+0.40%)
  • 10-Yr Bond

    -0.0090 (-0.58%)

    +0.0040 (+0.29%)

    -0.3150 (-0.29%)

    -269.36 (-0.47%)
  • CMC Crypto 200

    +54.77 (+3.81%)
  • FTSE 100

    +21.29 (+0.30%)
  • Nikkei 225

    +26.45 (+0.09%)

Keurig (KDP) Partners With McDonald's to Market McCafe Coffee

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Kuerig Dr Pepper Inc. KDP continues to make strides to bolster its leadership in specialty coffee and tea. Keeping in these lines, the company has signed a long-term master licensing and distribution agreement with McDonald’s USA LLC, a subsidiary of McDonald’s Corp. MCD, for McCafe Packaged coffee. This marks the beginning of an episode for the McDonald’s McCafe packaged coffee business, which collaborated with Kraft Heinz KHC in 2014, to bring the brand to U.S. homes and retail outlets.

Per the agreement, Keurig will be the exclusive manufacturer of McCafe K-Cup pods in the United States, effective from the second half of 2020. Keurig will also be in charge of coffee sourcing, distribution and marketing of the brand in K-Cup pods as well as bagged and canned coffee packaging. Additionally, the company will take on the responsibility to trade the brand in all channels, including retail and e-commerce.

From the second half of 2020, the McCafe brand will be marketed by Keurig’s single-serve brewing system, apart from the coffee aisle. With this new venture, the company expects to make McCafe a leading go-to-coffee brand for its customers along with strengthening its presence in the retail channel. Further, the company expects to bring innovation through its sourcing, roasting, distribution and marketing expertise to drive the brand’s growth and expansion.

Currently, McDonald's, Kraft Heinz and Keurig are likely to together make an effort to ensure smooth transition of the McCafe brand by the second half of next year.

Keurig is focused on partnerships and acquisitions to augment growth. Post its merger with Dr Pepper Snapple Group, the company acquired Big Red and CORE Hydration. It also partnered with Forto Coffee Energy Shots and expanded distribution terms with Peet's for ready-to-drink Iced Expresso. It will distribute Forto throughout its network and Peet's primarily through its network of convenience stores.

Additionally, the company has signed a long-term agreement to sell, distribute and merchandise the Evian brand across the United States. It also added the iconic Canadian coffee brand, Tim Horton’s, and U.S.-based bakery-cafe brand, Panera, as partners. Furthermore, it has partnered with Met café in Canada, which was previously an unlicensed brand, and will begin distributing in 2020. Meanwhile, Keurig Dr Pepper exited FIJI Water and BODYARMOR drink brands as part of the recent reorganization of its allied brands.

Price Performance & Another Stock to Consider

Keurig’s stock has gained 17.5% in the past year, outpacing the industry’s growth of 2.6%. Moreover, the stock has comfortably outperformed the broader Consumer Staples sector and the S&P 500 index’s growth of 5.3% and 1.4%, respectively. The company currently carries a Zacks Rank #2 (Buy).


Another stock that currently holds potential in the soft drinks space is Fomento Economico Mexicano S.A.B. de C.V. FMX, with an impressive long-term earnings growth rate of 15.8%. It also carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
McDonald's Corporation (MCD) : Free Stock Analysis Report
Keurig Dr Pepper, Inc (KDP) : Free Stock Analysis Report
To read this article on Zacks.com click here.