QUOTE AND NEWS
StreetInsider.com  Aug 25  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Keurig+Green+Mountain+%28GMCR%29+Releases+Next+Generation+2.0+System/9778809.html for the full story.
SeekingAlpha  Aug 25  Comment 
By Bill Maurer: On Friday, shares of Keurig Green Mountain (NASDAQ:GMCR) hit a new high after a partnership deal was announced. Shares have continued to rocket higher, despite the company's results not being that tremendous in recent quarters....
SeekingAlpha  Aug 23  Comment 
By Peter F. Way, CFA: The American consumer loves to spend $ Self-indulgence seems to know no bounds among US consumers. When coupled up with a national favorite beverage, single-serving coffee-makers became the current must-have, putting Mr....
StreetInsider.com  Aug 22  Comment 
52-Week High: Gilead Sciences (Nasdaq: GILD) $105.16. Gilead Sciences rising today as RBC Capital raised its price target from $102 up to $115, while maintaining an Outperform rating on the stock. Analyst Michael J. Yee is positive on its...
StreetInsider.com  Aug 22  Comment 
The following is a list of notable articles to help get you through the lunch hour: Doral Financial (DRL) Said It Hasn't Left Negotiations -> Read this! Keurig (GMCR) / Kraft Foods (KRFT) Agreement is 'Significant', Says KeyBanc; Analyst...
TheStreet.com  Aug 22  Comment 
NEW YORK (TheStreet) --Shares of Keurig Green Mountain Inc. are climbing higher by 7.88% to $127.03 in early morning trading on Friday, after the company announced it has entered into a licensing agreement with Kraft Foods Group Inc. . The...
SeekingAlpha  Aug 18  Comment 
By Seth Golden: On August 6th, Keurig Green Mountain (NASDAQ:GMCR) released its Q3 2014 Earnings report which was met with a mixed reaction from investors as the stock quickly dove after hours, but quickly rebounded the next trading day to remain...
SeekingAlpha  Aug 17  Comment 
By Andrew Sachais: Keurig Green Mountain (NASDAQ:GMCR), the maker of Keurig one-cup coffee brewers, may be negatively affected by pricing pressure in 2015, even as the company plans on rolling out a new machine later this year. The company said...
SeekingAlpha  Aug 14  Comment 
By Dana Skold: Green Mountain's Strong Quarter Investors in Keurig Green Mountain (NASDAQ:GMCR) should be pleased with the coffee roaster's excellent quarterly results. Revenues rose while gross costs and SG&A expenses stayed constant: GMCR...
TheStreet.com  Aug 14  Comment 
NEW YORK (TheStreet) -- Keurig Green Mountain shares are climbing, up 0.7% to $114.86 in early market trading on Thursday, after the company announced that it will raise its coffee prices by 9% in November in an effort to offset the rising cost...




 

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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