Green Mountain's K-cups brew up sales
The single-cup market in the US is dominated by this coffee roaster with its proprietary Keurig brewing system.
K-Cup portion packs and Keurig single-cup brewers and related accessories contribute a significant proportion to GMCR's revenues -- approximately 84% in 2011.
Green Mountain dominates the single-cup market in the U.S. with its proprietary Keurig K-Cup brewing system. In coffee makers, GMCR competes with Robert Bosch, Nestle, Mars, Bunn-O-Matic and Philips Electronics, among others.
Single-serve coffee formats, a category that was in the nascent stage approximately five years ago, now accounts for 7.5% of U.S. retail coffee sales, according to Packaged Facts. The single serve market has been a major growth driver of the overall coffee industry in the U.S. According to a recent study by National Coffee Association of USA, penetration is growing in the single-serve arena at an average of 1% per year.
Green Mountain offers its customers the ability to choose from over 200 varieties of K-Cup portion packs. Its K-Cup brands include prominent names like Caribou Coffee, Dunkin' Donuts (DNKN), Kahlua, Starbucks (SBUX), Diedrich Coffee, Millstone, Gloria Jean's, Cafe Escapes and Coffee People.
The coffee roaster has been keen on developing good partnership opportunities with other firms. In February 2011, the firm entered into a multi-year manufacturing and distribution agreement under which it manufactures K-Cup portion packs for Dunkin' Brands. Dunkin' K-Cup portion packs became available at participating Dunkin' Donuts restaurants in August 2011. In March 2011, GMCR entered into a multi-year relationship for the manufacture, marketing, distribution and sale of Starbucks and Tazo tea branded K-Cup portion packs.
Green Mountain is focused on continued innovation both in single-serve brewing systems and beverage development. It is presently working with Lavazza to co-develop a new single-serve espresso machine for North American consumers that would complement its Keurig single-cup brewers.
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