) recently announced that it has expanded its existing partnership
Green Mountain Coffee Roasters
). Starbucks also revealed the introduction of a new energy drink
known as Starbucks Refreshers.
Per the terms of the agreement, the company will manufacture and
sell Starbucks-branded Vue packs to be to be used on Green
Mountain's newly introduced Keurig Vue single-cup machines.
Starbucks already sells the K-Cup packs to GreenMountainto run on
other Keurig Brewers. Keurig is an exclusive single cup machine
which makes Starbucks coffee and Tazo tea. Green Mountain and
Starbucks will sell the Vue packs in specialty, department and mass
merchandise stores in the US and also on Green Mountain's websites
by fall 2012.
The alliance comes on the heels of the company's recent move to
launch its own single cup at-home coffee machine called Verismo by
fall this year. Investors were expecting Verismo to pose strong
competition to the Keurig machines. However, Starbucks ruled out
any competition between the two arguing that the Verismo system is
a high pressure machine while Keurig a low pressure one. Starbucks
also announced that it will continue to supply K-Cup packs to Green
Mountain. Shares of Green Mountain, however, witnessed a sharp
decline after the announcement of the news.
The above mentioned agreements and new product launches will
help Starbucks take further share of the premium single cup segment
which is the fastest growing market in the coffee industry and is
expected to become an $8 billion market globally.
Starbucks looking to meet the needs of increasingly health
conscious Americans also announced the introduction of its new
energy drink, Starbucks Refreshers. The beverages are made from
green coffee extract and fruit juice and will mark Starbucks' entry
into the $8 billion energy market. The low-calorie, ready-to-drink
beverages will be available in raspberry pomegranate, strawberry
lemonade and orange melon flavors. The drink has already been
rolled out at some grocery locations in the US and is expected to
be widely available by April end. Very recently, Starbucks
announced the opening of its first Evolution Fresh juice store in
Bellevue, Washington to take a pie of the health food market.
Starbucks recently held its annual shareholders meet in Seattle
where it announced plans to invest around $180 million to expand
manufacturing capacity in Southeastern US. The expanded
manufacturing capacity is expected to create more than 140 jobs.
The company will add a fifth manufacturing capacity in the US at
Augusta, Georgia and expand an existing facility in Sandy Run,
South Carolina. Management also announced plans to expand in the
emerging markets of China and other Asian countries. The company
believes that China will become Starbucks' second largest market by
2014 and will have more than 1500 stores by 2015. In 2013, Japan
will witness the opening of the 1000
Starbucks store and Korea will have 700 stores by 2016.
We currently have a Neutral recommendation on Starbucks. The
stock looks more appealing near term with a Zacks #2 Rank (a
short-term 'Buy' rating).
GREEN MTN COFFE (
): Free Stock Analysis Report
STARBUCKS CORP (
): Free Stock Analysis Report
To read this article on Zacks.com click here.