QUOTE AND NEWS
Market Intelligence Center  2 hrs ago  Comment 
Green Mountain Coffee Roasters Inc. (GMCR) traded between $118.86 and $121.21 before closing at $120.82 Friday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s algorithms have picked a Sep. '14 $120.00...
Motley Fool  Jul 15  Comment 
Keurig Green Mountain’s latest generation of brewing technology promises to have major industry-wide implications.
Motley Fool  Jul 9  Comment 
Keurig Green Mountain nabs another private-label deal.
Motley Fool  Jul 3  Comment 
The world's largest beverage company recently upped its stake in Keurig Green Mountain, but odds are it's not done yet.
TheStreet.com  Jul 1  Comment 
NEW YORK (TheStreet) -- Shares of Nestle are up 0.61% to $78.14 after it was reported that the company plans to make Coffee-Mate branded capsules compatible with Keurig Green Mountain Inc.  machines in the U.S., bringing the world's biggest...
Forbes  Jun 27  Comment 
In early trading on Friday, shares of Keurig Green Mountain (GMCR) topped the list of the day's best performing components of the S&P 500 index, trading up 3.2%.  Year to date, Keurig Green Mountain registers a 64.5% gain.
TheStreet.com  Jun 27  Comment 
NEW YORK (TheStreet) -- Argus upgraded Keurig Green Mountain  to "buy" from "hold" and set a $140 price target. The firm expects solid revenue and earnings improvement through 2015. The stock was up 1.59% to $122.30 in pre-market trading on...
StreetInsider.com  Jun 25  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Management+Changes/Keurig+Green+Mountain+%28GMCR%29+Director+del+Vecchio+to+Retire/9613747.html for the full story.
SeekingAlpha  Jun 20  Comment 
By Jesse Bellet: The scope of this article will look at the financial health of Keurig Green Mountain (GMCR) and the ability to continue to pay the dividend. While investors see the current yield of 0.8% as possibly unattractive, the potential for...
Market Intelligence Center  Jun 20  Comment 
After closing Thursday at $121.56, Green Mountain Coffee Roasters Inc. (GMCR) presents an attractive opportunity to get a 7.95% return in just 57 days, which is an annualized return of 50.92% (for comparison purposes only). To enter this trade,...




 

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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