QUOTE AND NEWS
Benzinga  Nov 28  Comment 
Speaking on CNBC's Options Action, Mike Khouw said that there was unusually high call-to-put ratio in Keurig Green Mountain Inc (NASDAQ: GMCR). Three calls were traded for every traded put. The most of the call buying was in the December 144...
Benzinga  Nov 20  Comment 
Keurig Green Mountain Inc (NASDAQ: GMCR) fell sharply Thursday on disappointing guidance and news that its chief financial officer will resign. But an analyst said the company is on track with long-term goals. The coffee machine maker's shares...
Benzinga  Nov 20  Comment 
BTIG commented on Keurig Green Mountain Inc (NASDAQ: GMCR) Thursday after the company beat Q4 earnings estimates. Analyst Theo Brito noted that "Keurig delivered stronger Q4 topline & margins (reported EBITA +26 percent y/y) thanks to...
Forbes  Nov 20  Comment 
In early trading on Thursday, shares of Dollar Tree (DLTR) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 6.5%. Year to date, Dollar Tree registers a 18.2% gain.
TheStreet.com  Nov 18  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain  are up 2.02% to $157.62 after the company's price target, fiscal 2015 EPS and revenue estimates were raised at Canaccord Genuity earlier on Tuesday. The firm boosted the price target to...
Benzinga  Nov 18  Comment 
The graphs below were produced by Capital Market Labs. Keurig Green Mountain Inc (NASDAQ: GMCR) stock is up 465 percent in the last two years and the firm has earnings due out this Wednesday after the bell. What’s been driving the...
TheStreet.com  Nov 15  Comment 
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener. NEW YORK (TheStreet) -- Here are some of the hot stocks Jim Cramer talked about on Friday's Mad Money on CNBC: GMCR data by YCharts...
TheStreet.com  Nov 14  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain Inc are gaining, up 0.47% to $154.63 in early market trading Friday, after the company had its price target raised to $185 from $166 by analysts at Goldman Sachs this morning. Goldman...




 

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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