Green Mountain Coffee Roasters Inc.(NASDAQ:GMCR) has grabbed a deal with Dr Pepper Snapple Group Inc.(NYSE:DPS) to offer Snapple premium iced teas in K cup and Vue packs for Keurig single-cup brewers, scheduled to begin next year.
The move comes at a time when the leader of the single-serve coffee industry gears up for a wave of new single-serve coffee brewers entering the market in the US.
The Snapple K-Cup iced teas will be available in the US and Canada by spring of 2013. The Vue packs will follow, as per the statements made by the firms on Tuesday.
The new beverages will join an existing line specially crafted to prepare iced beverages with any Keurig brewer.
Single-serve coffee pods are predicted to reach $959.1 million in retail sales this year, up 32%, as per the report of Euromonitor International. That would account for nearly 10% of the overall coffee market that is estimated to grow by a meagre 6% this year.
Apart from the coffee that is sold to offices, Green Mountain’s share of the retail market was 54% previous year, down from 60% in 2010 and 63% in 2009, as told by Euromonitor.
It has been noted that any news on restricted top-line growth for Green Mountain is often confronted by an overreaction. The market is anxious about the most recent reports on earnings that might shade some light on the position of the company in the upcoming years.
Earlier the Keurig brewers were sold at cost price. At times, they were even sold at a loss and a major portion of the company’s profits were achieved through the sale of the K-cups. Any third party selling K-cups had to pay a royalty to Green Mountains. Presently, some of the patents have expired. So, any company is free to roll out its own K-cups without being obligated to pay royalty to Green Mountain.