Keurig Green Mountain - Home - Charter Trust Company 32 Ueag nvee a “You should get a Keurig”,...
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Understanding Investments Journal Page 32 “You should get a Keurig”, my daughter-in-law, Diane, advised during a visit to her home during the recent holidays. I had recently “poured” myself a cup of coffee from her Keurig and was surprised at how good it tasted. Green Mountain Coffee, the parent company of Keurig, produces nearly 200 varieties of coffee, teas and cocoas. e flavor that filled my cup this Winter morning was especially good. e Keurig company was acquired by Green Mountain Coffee Roasters in 2006 when it bought the remaining 65% of Keurig that it didn’t already own, for $ 160 million. At the recent annual meeting, the company announced that it is changing its name to “Keurig Green Mountain, Inc.” since Keurig now produces over 90% of the roughly $ 4.5 billion company revenue. Growing revenue at about 12% a year, the company feels that it is the Keurig brand that will take them global since it utilizes a system that produces more than just coffee, thus the Keurig name first. e Green Mountain Coffee brand is recognized by coffee growers in more than 25 countries, but the company feels that the future is their recognition as a “personal beverage system company”. Company strategy is to build on the sales of its brewers by selling the K-Cups, the pods of coffee and tea that go into the brewers. It vigorously protects their investment by licensing them to outside companies. ere was much concern in 2012 when these licenses were about to expire but, surprisingly, Keurig Green Mountain Changing morning routines, one cup at a time! By Marti Beagan
Transcript of Keurig Green Mountain - Home - Charter Trust Company 32 Ueag nvee a “You should get a Keurig”,...
Understanding Investments JournalPage 32
“You should get a Keurig”, my daughter-in-law, Diane, advised during a visit to her home during the recent holidays. I had recently “poured” myself a cup of coffee from her Keurig and was surprised at how good it tasted. Green Mountain Coffee, the parent company of Keurig, produces nearly 200 varieties of coffee, teas and cocoas. The flavor that filled my cup this Winter morning was especially good.
The Keurig company was acquired by Green Mountain Coffee Roasters in 2006 when it bought the remaining 65% of Keurig that it didn’t already own, for $160 million. At the recent annual meeting, the company announced that it is changing its name to “Keurig Green Mountain, Inc.” since Keurig now produces over 90% of the roughly $4.5 billion
company revenue. Growing revenue at about 12% a year,
the company feels that it is the Keurig brand that will take them global since it utilizes a system that produces more than just coffee, thus the Keurig name first. The Green
Mountain Coffee brand is recognized by coffee growers in more than 25 countries,
but the company feels that the future is their recognition as a “personal beverage system
company”.
Company strategy is to build on the sales of its brewers by selling the K-Cups, the pods of
coffee and tea that go into the brewers. It vigorously protects their investment by licensing them to outside companies. There was much concern in
2012 when these licenses were about to expire but, surprisingly,
Keurig Green MountainChanging morning routines, one cup at a time!
By Marti Beagan
MoneyBasicsRadio.com Page 33
this had little effect. Many companies renewed their partnership agreements because they liked the way the brewing system delivered their product. Starbucks stays with Green Mountain because of the quality of the Keurig process, noting that they are in the coffee business, not the “machine business”.
Green Mountain also has partnered with Campbell Soup, Krispy Kreme, Dunkin’ Donuts and Paul Newman Organics to name only a few.
Later this year, Keurig has plans to roll out a new system called Keurig Cold, an in-home carbonation rival to SodaStream. Coca-Cola has purchased a 10% stake in Green Mountain Coffee Roasters, and the companies have entered into a 10-year agreement to collaborate in the development and introduction of Coca-Cola products. The competitive advantage that this partnership will have over SodaStream is that Keurig Cold will not require the owner to recycle the carbon dioxide canisters.
Keurig has plans to come out with the new Keurig 2.0 system later this year or early next. The new system uses a patented technology that only brews licensed K-Cups. There will be a code embedded onto the lids of the pods and the brewers are equipped to read these codes. Although upsetting to some that these new “smart
Marti Beagan is an Investment Officer at Charter Trust Company. She is located in our Hanover, NH office and can be reached at603-856-5237 or via email at: [email protected]
Recycle used K-Cups as seed starters
machines” will be able to identify the K-Cup that is inserted, the company maintains that it is necessary since it’s important to know whether to brew a 32 ounce carafe or an 8 ounce cup. Yes, the new 2.0 system will have the ability to brew both single-serve and also an entire pot of coffee. Green Mountain did the research and discovered that 72% of current Keurig owners also own a drip coffee maker for those times when company is coming over and you really need to brew a pot of coffee. Now you will be able to brew a carafe of coffee using the new Keurig K-Carafe pack. And, of course, these packs will only operate in the new Keurig 2.0 brewers.
Keurig Green Mountain’s mission statement is “a brewer on every counter and a beverage for every occasion”. The new “first in the country” retail store opened last year in the Burlington Mall and sports a “Pick-a-Pack”wall with nearly 200 varieties of Keurig products, from coffee and cocoa, to soups and teas. I’ll be sure to stop by and do some sampling the next time I visit Diane. With the speed, ease, convenience and variety of choices available, it is beginning to look like there may be a brewer on my counter someday.
• The company is being added to the S&P 500
• Changed its deal with Starbucks to allow for other premium brands
• Signed multi-year deal with Peets Coffee & Tea
• Coca-Cola took a 10% stake in the company
Keurig Green Mountain in the news
Green Tip
