Green Mountain Coffee Roasters (NASDAQ:GMCR) signs a significant deal with Starbucks (NASDAQ:SBUX) Corporation.
Green Mountain Coffee Roasters and the Starbucks Corporation have signed a deal. GMCR will package, market and sell Starbucks coffee in their famous Keurig single cup serving coffee makers.
Unless you’ve lived under a rock for the past two years, then I’m sure you’ve seen those cute little single cup coffee servings made by a company called Keurig. K-cups have become their nickname. It was about one year ago that GMCR purchased the Keurig Company. Many in the investment community thought this was a bad move for GMCR while others saw this as a significant opportunity. GMCR has significantly changed the investment community’s opinion about the company’s ability to generate profits going forward with the signing of this deal with Starbucks coffee.
I sort of inherited one of these single cup brewers around Christmas time. About three weeks ago I had to return it to its rightful owner. After about one week without this handy little device, I went off to Kohl’s and bought myself my own single cup brewer. I’ve become accustomed to the quality flavor of the coffees created in this little machine, but I’m also very fond of Starbucks coffee. So, Starbucks at home? How could this get any better? I’m sure I’m not the only one who feels this way.
The strategic partnership between GMCR and Starbucks coffee is a win-win-win situation. GMCR wins, Starbucks wins, and even the consumer wins in this arrangement. I live out in the country and the nearest Starbucks is 15 miles from my home. For my family, this means we can have Starbucks without ever leaving the house. For those who live where Starbucks are on every corner, it means they can have a fresh cup of Starbucks coffee without having to wait in line with all the consumers who love those “foo foo” drinks Starbucks serves that holds up the line.
According to Howard Schultz, President CEO and Chairman of the Starbucks Corporation, “Our research shows that more than 80 percent of current Starbucks customers in the United States do not yet own a single cup brewer and our relationship will enable Starbucks customers to enjoy perfectly brewed Starbucks coffee at home one quality cup at a time.”
All I can say is wow. Green Mountain Coffee Roasters continues to pursue a program of offering popular premium coffees through their single cup brewing system. It’s an intelligent business plan and one I suspect will send the share price of GMCR towards $60 per share. As I write this, at 8:23 AM Eastern Standard Time, GMCR looks to open about 27 percent higher than yesterday’s close… Looks like someone has already had a lot of caffeine this morning!
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