Keurig Green Mountain Soars to 52-Week High - Analyst Blog

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Shares of coffee maker Keurig Green Mountain Inc. ( GMCR ) hit a new 52-week high of $128.04 on Jun 17, 2014.

Growth Drivers

Keurig Green Mountain shares have been on the rise this year, backed by several strategic alliances which should help it maintain a leading position in the single-serve brewing category. The solid business momentum of the business of the company helped it to yield a solid year-to-date return of 67.8%

Last week, Keurig Green Mountain, signed a deal with the popular coffee maker Nestle's U.S. division - Nestle USA. Per the multi-year agreement, Nestle's Coffee-mate branded coffee with creamer will be available in K-Cup packs that can be used on Keurig brewers.

Nestle USA will distribute the flagship Nestlé Coffee-mate 2 in 1 K-Cup packs (coffee combining roast and ground coffee with creamer) in two flavors - Original and French vanilla. The Nestle Coffee-mate K-cup packs will be available on the online shopping sites of Keurig in fall 2014 and in grocery, mass and specialty retail channels by spring 2015.

However, Nestle is not the only company with whom Keurig Green Mountain has joined hands to increase its market share in single serve coffee system. America's popular restaurant chain Subway also joined forces with Keurig to widen the homemade single-serve coffee options for Keurig users. Under the agreement, Keurig Green Mountain's new K150 brewer series will be installed at nearly 30,000 Subway restaurants across the U.S.

Earlier this year, Keurig Green Mountain and Italy's coffee company Luigi Lavazza SpA inked a multi-year agreement to offer the latter's flagship coffee Lavazza in K-Cup packs for Keurig brewers.

Other then these new agreements, Keurig Green Mountain already boast of similar strategic distribution agreements with huge names like Dunkin' Brands Group Inc. ( DNKN ), Unilever plc. ( UL ) and Starbucks Corp. ( SBUX ). Keurig Green Mountain produces coffees, teas and other hot beverages which are sold in K-Cup and Vue portion packs. These portion packs can be used on its single-serve Keurig brewers for making hot beverages.

Investors are encouraged by these initiatives which further Keurig Green Mountain's goal of sustaining its dominance in the single-serve brewing market even after the expiry of its K-cup patents in Sep 2012. Through these agreements, the coffee maker is aligning with the strongest beverage brands to support a range of consumer choices and taste profiles under the Keurig Single-Cup Brewing system.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: GMCR , DNKN , UL , SBUX

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