Back to top

Analyst Blog

Green Mountain Coffee Roasters Inc. (GMCR - Analyst Report) and Italy’s coffee company Luigi Lavazza SpA have entered into an agreement to widen the homemade single-serve coffee options for Keurig users. Under the multi-year agreement, Lavazza SpA’s flagship coffee Lavazza will now be available in K-Cup packs for use on Keurig brewers.

Lavazza SpA will also distribute its upcoming coffees like Gran Aroma, Classico, Gran Selezione, Perfetto scheduled to launch in 2014 fall in Keurig K-cups. The Lavazza K-cups will be available at the online shopping sites of Keurig and Lavazza along with the participating shops, grocery, retail and Away-From-Home channels throughout the U.S.

The new agreement extends a prior partnership between the companies. Under the partnership the two companies developed Keurig Rivo Cappuccino and Latte System. This helped Green Mountain to step into the growing category of espresso, cappuccino and latte brewer.

GreenMountain produces coffees, teas and other hot beverages which it sells in K-Cup and Vue portion packs. These portion packs can be used on its single-serve Keurig brewers for making hot beverages.

The deal will boost Lavazza’s coffee sales as the convenience of Keurig brewers will enhance the popularity of its beverage among Keurig fans. Moreover, the pact furthers Green Mountain’s goal of sustaining its dominance in the single-serve brewing market after the expiry of its K-cup patents in Sep 2012.

Green Mountain Coffee aims to popularize the single-cup brewing brewing system in America and has signed several strategic distribution agreements to rope in popular brands like Dunkin’ Brands Group Inc. (DNKN - Snapshot Report) and Starbucks Corp. (SBUX - Analyst Report) into its portion pack systems.

Moreover, as a part of its strategy to maintain its dominance in the single serve brewing category, Green Mountain is stepping into the world of cold beverage and soda. It will launch its new Keurig brewer, ‘The Keurig Cold Machine’ which will enable people to make sodas, sports drinks and other beverages with the touch of a button. Like its coffee machines, the cold machine would use pods to make a variety of drinks.  

In order to increase its brand power it has inked a 10-year partnership deal with the beverage giant – The Coca Cola Company (KO - Analyst Report), under which Green Mountain will exclusively make Coca-Cola branded pods for use on its upcoming Keurig Cold at-home beverage system for making cold beverages. Coca-Cola will also work with Green Mountain on the development and launch of this latest version of Keurig single-cup brewer.

Through these agreements, Green Mountain is aligning with the strongest beverage brands to support a range of consumer choices and taste profiles in Keurig Single-Cup Brewing system

Please login to Zacks.com or register to post a comment.