QUOTE AND NEWS
SeekingAlpha  Sep 11  Comment 
By John McKenna: When Keurig (NASDAQ: GMCR) burst onto the scene with their patented single-cup brewing machine, it changed the coffee drinking world. Teaming up with then-exclusive partner Green Mountain Coffee, the stock became the hottest...
SeekingAlpha  Sep 9  Comment 
By ICRA Online Ltd.: Keurig Green Mountain (NASDAQ: GMCR) has come a long way since its inception in 1981 as a small coffee shop in Waterbury, Vermont. The company was earlier known as Green Mountain Coffee Roasters, and very recently changed the...
SeekingAlpha  Sep 4  Comment 
By Jesse Bellet: The scope of this article will look at the financial health of Keurig Green Mountain (NASDAQ:GMCR), and the potential to increase the scant dividend. While investors see the current yield of 0.75% as possibly unattractive, the...
Motley Fool  Sep 3  Comment 
Keurig has just launched its new Keurig 2.0 brewing system, and the biggest change might be where you see them.
Benzinga  Sep 3  Comment 
Shares of Keurig Green Mountain Inc (NASDAQ: GMCR) are weakening after a strong start, initially getting a boost Wednesday following news of additional offerings from The Coca-Cola Company (NYSE: KO) line. Coca-Cola had bought a 10 percent...
StreetInsider.com  Sep 3  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Keurig+Green+Mountain+%28GMCR%29%2C+Coca+Cola+%28KO%29+Expand+Partnership+into+Still+Brands/9801493.html for the full story.
Market Intelligence Center  Sep 3  Comment 
After closing Tuesday at $133.30, Green Mountain Coffee Roasters Inc. (GMCR) presents an attractive opportunity to get a 5.69% return in just 80 days, which is an annualized return of 25.97% (for comparison purposes only). To enter this trade,...
SeekingAlpha  Sep 1  Comment 
By CapitalCube: By Hiland Doolittle Late last week, Keurig Green Mountain (NASDAQ:GMCR) revealed more stunning distribution partnerships and topped off the serving with a technology revelation investors and market makers liked. If any one...
SeekingAlpha  Aug 31  Comment 
By Renu Singh: Keurig Green Mountain's (NASDAQ:GMCR) performance in 2014 has been outstanding. The company has appreciated more than 75% so far on the back of its growth and key partnerships with companies such as Coca-Cola (NYSE:KO) and Kraft...
SeekingAlpha  Aug 30  Comment 
By Options Calling: Over the past six months, Vermont based K-cups maker Keurig Green Mountain (NASDAQ:GMCR) has struck several distribution deals in the market with the aim of accelerating the company's top line growth. The company once again...




 

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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