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Nestle plans Coffee-Mate capsules for Keurig

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By Bloomberg News
Wednesday, July 2, 2014, 9:20 p.m.

Nestle SA plans to make Coffee-Mate branded capsules that are compatible with Keurig Green Mountain Inc. machines, bringing the world's biggest coffee maker onto a rival's system.

The two companies will start selling the capsules, known as K-Cups, in the fall, they said in a Business Wire statement today. The packs will come in original and French Vanilla flavors and include coffee and creamer.

Nestle, which gets about a fifth of its $100 billion sales from java, has struggled to grow Nespresso. The company this year introduced a new type of machine to appeal to Americans who prefer a larger cup of coffee than Europeans.

The move is an “example of Nestle looking to crack the U.S. single-serve market on multiple fronts after its Dolce Gusto system largely failed in a first step,” said Jon Cox, an analyst at Kepler Cheuvreux in Zurich.

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