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.
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