QUOTE AND NEWS
Benzinga  Apr 2  Comment 
Standard & Poor's Ratings Services today raised its corporate credit rating on Waterbury, Vt.-based Keurig Green Mountain Inc. (NASDAQ: GMCR) to 'BB' from 'BB-'. We also raised the issue-level ratings on the company's senior secured credit...
Forbes  Mar 31  Comment 
In early trading on Monday, shares of Micron Technology (MU) topped the list of the day's best performing components of the S&P 500 index, trading up 5.5%.  Year to date, Micron Technology registers a 6.3% gain.
SeekingAlpha  Mar 25  Comment 
BySeth Golden: Every year, Capital Ladder Advisory Group participates in the International Home and Housewares Show (IHH) on behalf of investors. It's a great show that allows for manufacturers/vendors from all over the world to exhibit and...
StreetInsider.com  Mar 25  Comment 
The following is a list of notable articles to help get you through the lunch hour: Starbucks (SBUX), Keurig Green Mountain (GMCR) Pod Share Inches Higher - Wells Fargo Citing Nielsen -> Read this! Fuel Cell, Hydrogen Names Largely Quiet...
SeekingAlpha  Mar 24  Comment 
ByZachary Schenk: Keurig Green Mountain Inc. (GMCR) is the leader in specialty hot beverage machines. Their Keurig machines are an innovative concept that has garnered the attention of investors from all over the world. Green Mountain has...
Forbes  Mar 14  Comment 
Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned cash to make a purchase, is that they...
TheStreet.com  Mar 14  Comment 
NEW YORK (TheStreet) -- Keurig Green Mountain  is surging on Friday after announcing a multi-year partnership with Peet's Coffee & Tea and reworking its deal terms with Starbucks . By early afternoon, shares had climbed 7.9% to $114.53. The...
Jutia Group  Mar 13  Comment 
[at noodls] - ATLANTA, Ga. and WATERBURY, Vt. (Feb. 27, 2014) - The Coca-Cola Company (NYSE: KO) and Green Mountain Coffee Roasters, Inc. (GMCR) (NASDAQ: GMCR) announced today the closing of the previously announced ... Read more on this. The...
SeekingAlpha  Mar 12  Comment 
BySeth Golden: Shares of Keurig Green Mountain (GMCR) have been under pressure since the company announced its 10 year partnership with Coca-Cola (KO) and investors have chosen to take the significant share price appreciation to lock-in profits....
Forbes  Mar 11  Comment 
In early trading on Tuesday, shares of Green Mountain Coffee Roasters (GMCR) topped the list of the day's best performing components of the Nasdaq 100 index, trading up 2.6%.  Year to date, Green Mountain Coffee Roasters registers a 41.3% gain.




 

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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