QUOTE AND NEWS
Motley Fool  Jan 19  Comment 
Keurig Green Mountain Inc.'s stock dazzled investors in 2014. Why 2015 might not be as kind.
Benzinga  Jan 9  Comment 
In a report published Friday, Credit Suisse analyst Mark Astrachan reiterated a Hold rating on Keurig Green Mountain Inc (NASDAQ: GMCR). In the report, Credit Suisse noted, “We reduce our F2015 and F2016 revenue growth estimates by 50bps to...
Market Intelligence Center  Jan 9  Comment 
After closing Thursday at $136.49, Green Mountain Coffee Roasters Inc. (GMCR) presents an attractive opportunity to get a 6.73% return in just 70 days, which is an annualized return of 35.08% (for comparison purposes only). To enter this trade,...
TheStreet.com  Jan 8  Comment 
NEW YORK (TheStreet) -- Analysts at Morgan Stanley initiated coverage on Keurig Green Mountain Inc. with an "outperform" rating and $160 price target on Thursday. The firm said it initiated coverage on the coffee and coffee maker business as...
Forbes  Jan 7  Comment 
In early trading on Wednesday, shares of Keurig Green Mountain (GMCR) topped the list of the day's best performing components of the S&P 500 index, trading up 5.8%.  Year to date, Keurig Green Mountain registers a 1.7% gain.
TheStreet.com  Jan 7  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain   are up 3% to $131 in pre-market trade after the company signed a deal with Dr Pepper Snapple Group  to sell capsules that make its sodas in Keurig's planned cold-drink machine,...
Market Intelligence Center  Jan 2  Comment 
Green Mountain Coffee Roasters Inc. (GMCR) is an excellent choice for either a diagonal spread or a covered call expiring in Mar. '15 at the $130.00 level according to MarketIntelligenceCenter.com’s patented algorithms. A covered call on Keurig...
Forbes  Dec 31  Comment 
Apart from a new brewer launch, the company remained busy in adding several coffee and retail brands to its list of licensed brands. In February, Coca-Cola bought a 10% stake in the company for $1.25 billion. Shares of GMCR skyrocketed by 53%...
TheStreet.com  Dec 23  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain are down 3.06% to $135.50 in pre-market trade after the specialty coffee and coffeemaker business said it would recall over 6.6 million hot beverage-brewing machines in the U.S. that...
Motley Fool  Dec 16  Comment 
Creative types tinkered with the workings of the coffee makers' new brew system and found a work-around that puts the value of an investment in Keurig in doubt.




 

Green Mountain Coffee Roasters (NYSE: GMCR), headquartered in Waterbury, Vermont, provides premium, specialty coffees and coffee products. GMCR operates in two business segments: Green Mountain Coffee Roasters (ground coffee and coffee beans) and Keurig (the "one-cup coffee brewer"). In the past fiscal year, the firm has profited from the increased popularity to its Keurig business. However, coffee bean prices, the primary commodity input for GMCR, rose 72% in 2010,[1] which caused the firm's profit margin to decline 15%.[2]


Business Overview

In the past fiscal year, the success of the Keurig brand has driven GMCR sales, as the firm saw an 81% sales growth in its Keurig products.[2] Coffee prices have been surging since January 2010, causing GMCR profit margins to further tighten.

Trends and Forces

GMCR Profit Margins Pressured by Coffee Bean Prices

Green Mountain Coffee Roaster has a high dependence to its primary raw material: coffee beans. As the price of coffee beans, typically imported from Latin and South America, Southeast Asia, and Africa, rises, GMCR needs to pass these costs to consumers or create a more efficient production process to avoid lower profit margins.

Keurig's Niche Product Drives New Revenue Streams

Green Mountain Coffee owns the Keurig one-cup coffee maker business -- a niche product in an industry traditionally composed of coffee pot brewers and cafes. As the one-cup style of coffee making gains popularity, the firm can leverage its brand recognition to expand the business. For example, when GMCR announced it will sell Starbucks (SBUX) coffee in Keurig's patented K-Cup, the firm's stock increased 41%.[3]

Competition

GMCR's competitors include:

  • Starbucks (SBUX): The world's top coffee seller by revenue, Starbucks also sells in-house brewed coffee and other food products.
  • Peet's Coffee & Tea (PEET): Similarly to Starbucks, PEET focuses on its in-house brewed coffee.
  • Dunkin' Donuts (privately held): Sells coffee and tea products, but doughnuts and food products as well.
  • The Folger Coffee Company: Like GMCR, Folger sells coffee beans and ground coffee to be brewed at home.

References

  1. Commodity Online, "Global coffee prices to go high on 2011," 12/23/2010
  2. 2.0 2.1 GMCR 2010 10-k
  3. Seeking Alpha, "A Nasty Week and a Highly Caffeinated Short," 03/11/2011
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