Green Mountain Coffee Roasters Inc. (GMCR - Analyst Report) has come up with a new flavor for its Keurig customers. They can now brew creamy, spicy pumpkin lattes in their brewers. The launch of Pumpkin Spice Latte marks the onset of the pumpkin season and is the first seasonal beverage offered in a Vue pack. With the Pumpkin Spice Latte, Green Mountain has forayed into the world of latte products. The limited edition drink available in K Cups and Vue packs (portion packs used with Keurig Vue brewers) can be brewed exclusively in the Keurig Vue Brewers.
The coffee giant has introduced Pumpkin Spice Latte at select stores nationwide. Vue Brewers are high-end brewing systems manufactured by the Keurig business unit of Green Mountain which allow consumers to choose the strength, amount and the degree of hotness or coldness of freshly brewed coffee, tea and other beverages.
The product is accompanied by the return of Pumpkin Spice seasonal coffee in bags, K-Cup and Vue packs online and in stores nationwide.
The Pumpkin Latte has strengthened the already-rich brand portfolio of GMCR’s coffee, tea and other beverages which boasts brand names like Green Mountain Coffee, Tully’s Coffee, Diedrich Coffee, Van Houtte, Timothy’s World Coffee brand and others. The popular flavor is expected to boost Green Mountain’s sales in the coming quarters.
However, Green Mountain is not the first coffee producer to offer pumpkin spice flavor to its fans. Coffee biggies like Starbucks Corporation (SBUX - Analyst Report), Maxwell House of Kraft Foods Group Inc. and Dunkin Donuts of Dunkin Brands’ Group Inc. (DNKN - Snapshot Report) are already offering the popular flavor which is a big hit among the customers during the fall. We feel that the new product of Green Mountain will face stiff competition from these products offered at other cafes. However, the new latte coming with the convenience of a Keurig brewer will provide an edge to Green Mountain over the other products available in the nation.
Management believes that there are ample opportunities of expanding its Keurig system in the domestic market. The Zacks Rank #1 (Strong Buy) company has raised its outlook for fiscal 2013 to reflect the strong momentum of its Keurig business unit, when it reported its third quarter 2013 results last week. Green Mountain expects its adjusted earnings per share in the range of $3.19 to $3.24, up from the prior guidance of $3.05 to $3.15. It represents a solid growth rate of 37% to 39% from the previous year earnings results.
The company expects net sales growth in the range of 13%–14% over fiscal 2012 compared to 11%–14% as announced previously.