Benzinga  May 20  Comment 
In a report published Wednesday, Argus analysts John Staszak downgraded the rating on Keurig Green Mountain Inc (NASDAQ: GMCR) from Buy to Hold, following the company's weak near term outlook. The company reported weak sales so far in FY15,...
Benzinga  May 18  Comment 
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show. Keurig Green Mountain Inc (NASDAQ: GMCR) shares were trading lower by $4 at $90.26 in Monday's session. The post-earnings shellacking continues after...
TheStreet.com  May 18  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain Inc. are down by 3.86% to $90.62 on heavy volume in late morning trading on Monday, as the stock continues to tumble from Friday when analysts criticized the specialty coffee and coffee...
Forbes  May 15  Comment 
Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Keurig Green Mountain Inc (NASD: GMCR), where a total of 41,566 contracts have traded so far, representing approximately 4.2 million underlying...
TheStreet.com  May 15  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain Inc  are plunging, down 7.7% to $95.14 in early market trading Friday, after analysts at CLSA reduced its price target on the coffee machine maker earlier this morning. The firm lowered...
TheStreet.com  May 7  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain  fell to a 52-week low of $95.02 on Thursday after the coffee company reported a second-quarter earnings miss. The company earned $1.03 a share, a 5% year-over-year decline, on revenue...
TheStreet.com  May 6  Comment 
NEW YORK (TheStreet) -- Shares of Keurig Green Mountain Inc are plummeting, down 11.82% to $97 in after-hours trading Wednesday, after the company reported its fiscal second-quarter earnings results. For the quarter, the company earned $1.03...


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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