Clusterstock  May 9  Comment 
The investor group that runs the biggest pure-play coffee company in the world decided to add some sweetness to its menu. JAB Holdings and its partners are spending about $1.35 billion to buy Krispy Kreme Doughnuts, according to a press release...
CNNMoney.com  May 9  Comment 
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CNNMoney.com  Mar 24  Comment 
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Forbes  Mar 2  Comment 
Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Sorrento Therapeutics Inc (NASD: SRNE), where a total of 1,807 contracts have traded so far, representing approximately 180,700 underlying...
CNNMoney.com  Feb 23  Comment 
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Forbes  Dec 22  Comment 
Despite repeated poor performance of all the major segments in the fiscal 2015 annual results released on November 18, 2015, the company's stock jumped from $40 to $51 over the next two weeks. Furthermore, when the news of this acquisition came...
Forbes  Dec 10  Comment 
GMCR is flooding the internet news, as its stock rocketed up more than 75% on December 7, 2015. After a year of struggle and diminishing stock value, Keurig Green Mountain is going private under a $13.9 billion buyout deal. On December 7, 2015,...
Forbes  Dec 7  Comment 
Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Chipotle Mexican Grill Inc (NYSE: CMG), where a total of 35,136 contracts have traded so far, representing approximately 3.5 million underlying...
Forbes  Dec 7  Comment 
Today, shareholders of Keurig Green Mountain, (GMCR) woke up to a nice 75% pop in the value of their shares. A private equity firm is taking the company private for $13.9 billion or $92 a share. That’s made GMCR one of the biggest one day movers...
Forbes  Dec 7  Comment 
In early trading on Monday, shares of Keurig Green Mountain (GMCR) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 73.1%.  Year to date, Keurig Green Mountain has lost about 32.4% of its value.


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]


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.


  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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