Keurig Green Mountain, struggling with sluggish demand for its coffee pods and brewers, is looking for a pick-me-up from chicken soup.
The Waterbury, Vermont-based company is working with Campbell Soup to offer two varieties of soups in its K-Cup system: a homestyle chicken noodle and a Southwest-style chicken noodle. The products mark Keurig’s first foray into food, according to a statement on Wednesday.
Keurig is seeking new sources of growth after tepid sales of K-Cups and a slow rollout for its new cold-drink machine forced the company to cut its forecast last month. The dim outlook sent its shares plummeting, erasing more than $3 billion from Keurig’s market value in a single day. In the most recently reported quarter, the company’s pod sales fell 1.4 per cent to $815 million.
The soup partnership was announced in September 2013, but it took more than two years to develop the pod, said Amy Doyle, a Keurig spokeswoman. Over that time, the company has seen its once-galloping sales growth disappear. The hope is that soup will give customers another reason to use their machines beyond the morning caffeine fix.
Like Keurig, Campbell could use a boost. Sales at the company fell almost 9 per cent to $1.69 billion last quarter. Campbell and Keurig have overlapping customers, and the effort could be a way to spur demand for both brands.
“We know more than 80 per cent of people who buy Keurig pods also buy Campbell’s soup,” said Michael Goodman, marketing director of innovation at the Camden, New Jersey-based soup company. “Bringing together two products people love in one handy kit is a winning idea.”
Bloomberg News, edited by ESM
