Counter intelligence for the casa

  @FortuneMagazine January 16, 2014: 6:48 AM ET
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(Fortune)

Green Mountain Coffee Roasters CEO Brian Kelley, a former Coca-Cola executive, is a Diet Coke guy. Like many people, he starts his day with a coffee -- made on his company's pod-based Keurig brewing system, of course -- but by 10 a.m., Kelley switches to Diet Coke and doesn't look back.

If Kelley has his way, by next year his soda could come out of an appliance made by his company rather than out of a can. Vermont-based Green Mountain (soon to be renamed Keurig Green Mountain) has a new piece of hardware in development -- code name: Geyser -- that Kelley thinks will do for cold beverages what Keurig has done for hot. The move is part of the company's ambitious strategy to capture a share of not only the 7½ beverages Americans drink on average throughout the course of the day but of every liquid they consume -- starting with the company's partnership with Campbell Soup in September. "We want a Keurig on every counter and a beverage for every occasion," Kelley says. "That's our mission."

This is not a story about Green Mountain's namesake coffee. It is a technology story -- a tale of one consumer packaged-goods company retreating to the lab to experiment, fail fast, and pack as much tech as possible into a thimble-shaped cartridge. In doing so, the company is reengineering its values to be more like those of the software startups of Silicon Valley than those of its peers in the Mid-Atlantic or Midwest. "We've had such a ride and such a run with Keurig," says Kelley, who joined the company in 2012. "The question is, How do you do five, six, seven more of those in the next 10 years?" Green Mountain's management thinks the key is its ownership of the entire ecosystem -- the appliance, the single-serving pod, and the manufacturing. Tom Novak, senior vice president of beverage R&D, equates it to a microwave maker expanding into frozen food: "Don't you think they would have a better product?"

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