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Cheaper k-cups: good for us, but bad for keurig's maker by 123wert sdfsf
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Cheaper k-cups: good for us, but bad for keurig's maker |
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Business,Business News,Business Opportunities
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As far as java sippers go, Green Mountain Coffee Roasters ( GMCR ) is hot. This Vermont company has seen its Keurig devices become the brewerof choice among fans of premium coffee in one-cup servings.Big-name companies (like Cuisinart and Mr. Coffee) have been happyto strike licensing deals to put out Keurig-compatible brewers.Retailers are devoting more shelf space to the K-Cup refills. Andmost of the big names in retail coffee flocked to Green Mountain toshow up in K-Cup form. Last year alone saw the introduction ofFolgers, Starbucks ( SBUX ), and Dunkin' Brands ( DNKN ) as Keurig refills.
Consumers see a growing company. Investors see a different companyentirely. What's really brewing at Green Mountain Here are just a few things that most owners of Keurig single-servebrewers probably don't know. Patents on the K-Cups expire in September. Starbucks has an espresso-based machine that will also makestraight black coffee ready to hit the market this holiday season.
Green Mountain missed its own quarterly sales forecast in last week's poorly received quarterly report , lowering its outlook for the balance of this fiscal year asbrewer and K-Cup sales are slowing. The company's founder had to rescind his chairmanship after a margin call forced him to sell millions of shares to coverhis shortfall, violating the company's trading policy. The stock peaked at $115.98 in September. Just eight months later,the shares are trading in the $20s.
Don't Unplug Your Keurig Just Yet If you own a Keurig system you don't need to worry. If anything,K-Cups will get cheaper -- and there will be a greater variety offlavors -- after the patents expire. The problem here for Green Mountain is the patent issue: After theexpiration, the company will no longer be collecting a few pennieswhenever a K-Cup is sold. Green Mountain owns many of the popular K-Cup brands.
FromTimothy's to Gloria Jean's to Tully's, the company has beensnapping up some regional brands behind some of the early K-Cupfavorites. Only now the company will be competing againstcost-shaving private label companies and any other javaheavyweights that have been waiting on the sidelines counting thedays. Green Mountain still has patents on the Keurig brewers, but it hasalways sold them at little to no markup. The model has always beento make it up in K-Cup sales. But with that line of business underthreat, suddenly the brewing machine becomes more important.
Attack of the Coffee Machines Keurig's inexpensive low-water-pressure system has owned the marketfor years against the fancier appliances. But it's about to getsome stiff competition fighting for counter space in your kitchen. Starbucks shocked the market earlier this year when it revealedthat it will put out its own single-serve brewing platform. Verismowon't be a direct competitor to Keurig.
It uses high water pressureto serve up fancy espresso and other high-end coffee beverages,similar to Nespresso, Tassimo, Senseo, and CBTL. But Starbucks hasa lot of marketing muscle to push this proprietary platform. Green Mountain isn't standing still. It recently introduced a newbrewer -- Vue -- that uses a new refill platform.
It's also teamingup with an Italian company to introduce a Verismo-style machine inthis country around the same time that Starbucks does before thisholiday season. Green Mountain may be increasing its chances with three differentsystems, but the confusion may also carve up the market in new waysas Green Mountain shifts its attention away from Keurig once theK-Cup ecosystem changes. I am Apparel writer, reports some information about designer clothing outlet , designer girls clothes.
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