In order to reach out to more consumers, coffee maker Green Mountain Coffee Roasters Inc. (GMCR - Analyst Report) has launched its new Keurig Vue coffee brewer model – Keurig Vue V600, at a discounted price of $209.99. Green Mountain’s new Vue V600 is the latest addition to the Keurig Vue Brewing System. This affordable model includes some of the most popular features such as auto on/off, strength, temperature control, energy saver mode and size selection. Apart from V600, the Keurig Vue Brewing System has provided its customers with advanced brewing options in the form of its Vue 700 machine, recently made cheaper at $229.99 from $249.99 previously.
Green Mountain, which was until now dominating the U.S. market with its innovative Keurig Single Cup brewing technology, is facing increased competition from lower-cost rivals like Starbucks Corporation’s (SBUX - Analyst Report) latest premium single cup domestic coffee machine, Verismo. The machine is available at the company’s website, Verismo.com and is expected to be available in company stores and at certain specialty retailers this month.
The Verismo single cup coffee machine is a major step by the company to take a share of the premium single-cup segment, which is the fastest growing market in the coffee industry. Verismo has increased the competition for Keurig, as a Verismo coffee machine is priced at a much lower level from the high-priced Keurig brand. Lower priced models like Vue V600 are aimed to protect from losing share to Verismo in future.
Starbucks recently expanded its existing partnership with Green Mountain. Per the deal, Starbucks will manufacture and sell Starbucks-branded Vue packs to be used on Green Mountain’s newly introduced Keurig Vue single-cup machines starting this fall. Starbucks already sells the K-Cup packs to Green Mountain to run on other Keurig Brewers.
Founded in 1981 and based in Waterbury, Vermont, Green Mountain holds a Zacks #3 Rank, which implies a short-term Hold rating. On a long-term basis, we have a Neutral recommendation on the stock.
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