just entered the single-serve coffee market. Yes, the same
single-serve market Vermont's own
Green Mountain Coffee Roasters
has dominated the last few years.
Perhaps no longer.
Starbucks announced today that it will begin selling its new
single-serve coffee brewer, the Verismo, both online and in its
thousands of cafes around the world. The Verismo has the ability
to make coffee, lattes and espressos. That's bad news for Green
Mountain Coffee and its Keurig machines, which are used to brew
its single-serve K-Cup packets.
The sell-off has already begun. GMCR shares plummeted almost
10% today after Starbucks announced it was throwing its hat into
the single-serve arena. Meanwhile, Starbucks shares rose
Delving into the single-serve market should only help
Starbucks. But the effect on Green Mountain could be
We knew this was coming. This is why hedge funder
hammered away at GMCR during last year's Value Investing
Congress. Green Mountain's K-Cup patents expired this month -
hence the stock's 74% decline over the past year.
Green Mountain currently occupies roughly 90% of the
single-serve coffee market. With Starbucks and all its commercial
clout now providing some formidable competition, that number is
sure to drop.
Will GMCR shares continue to drop as their single-serve market
share erodes? They're not off to a great start.