Specialty retailer Keurig Green Mountain Inc. (GMCR) is leaving no stone unturned to maintain its dominance in the single-serve coffee category.
Recently, Keurig Green Mountain and GE Appliances (GE) collaborated to develop GE café Series refrigerator with Keurig Brewing system
The new system claims to provide filtered water (minus 98% of five trace pharmaceuticals) without refilling. Moreover, the system allows users to preset the brew time via their mobile devices.
With this new technology, consumers can now brew over 400 varieties of Keurig K-Cup beverages from major brands like Folgers, Maxwell House, Starbucks Corporation (SBUX), Dunkin’ Donuts, Eight O’Clock, Community Coffee, and Peet’s Coffee and Tea with the new system.
The Café French door refrigerator with single-serve Keurig K-Cup brewing system will be available in stainless steel priced at $3,300 will be available in the third quarter of 2015.
The new system is expected to boost sales of its single serve brewers which already contributed more than 80% to the company’s sales in third quarter of fiscal 2014. The company also undertakes several steps to maintain its share in the category.
Since the expiry of its patents for K-Cups in 2012, Keurig Green Mountain has signed several strategic distribution agreements with well-known coffee brands to distribute their coffee in its portion packs. It has already inked deals with major coffee companies like Dunkin’ Brands, Kraft Group Inc. and Starbucks to include their offerings into its portion pack systems.
These deals have enabled Keurig Green Mountain to align with major beverage brands and offer products as per consumer choices and taste profiles under the Keurig Single-Cup Brewing system.
Apart from the hot beverage sector, the Zacks Rank #2 (Buy) stock is geared to expand its presence in the carbonation market and ready-to-drink tea sector. In December, Keurig Green Mountain agreed to acquire MDS Global Holding plc (Bevyz) to boost its single portion pack portfolio. MDS Global develops single-portion multi-drink system that dispenses hot and cold beverages.
Keurig Green Mountain also expanded its partnership with The Coca-Cola Company (KO) in Sep 2014 to offer some beverages from the latter’s still brands (non-carbonated) portfolio under the Keurig hot brewing system, in the U.S. It is scheduled to launch the Keurig Cold Brewing machine in 2015 which will prepare carbonated cold beverages.
We believe Keurig Green Mountain’s initiatives would help it to maintain its dominance in the single-serve brewing market. Further, these partnerships are expected to boost the company’s sales in 2015.
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