QUOTE AND NEWS
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.
Benzinga  Dec 10  Comment 
On Wednesday, analysts at Williams Capital Group raised the price target on Keurig Green Mountain Inc (NASDAQ: GMCR) from $131 to $151 and reiterated the Outperform rating. “We are increasing our F2015 adjusted diluted earnings per share...
Forbes  Dec 10  Comment 
In early trading on Wednesday, shares of Keurig Green Mountain (GMCR) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.3%.  Year to date, Keurig Green Mountain registers a 81.9% gain.
Forbes  Dec 10  Comment 
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money.  So let's look at two noteworthy recent insider buys.
TheStreet.com  Dec 5  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain are up 1.21% to $136 in pre-market trade after the specialty coffee and coffeemaker businesses technology company said it has entered into an agreement to acquire the outstanding equity...
Benzinga  Dec 4  Comment 
Keurig Green Mountain Inc (NASDAQ: GMCR) announced Thursday that it has entered into an agreement to acquire the outstanding equity of MDS Global Holding p.l.c. ("Bevyz") that it does not already own. The transaction is valued at approximately...
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...




 

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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