GMCR, Starbucks forge closer ties
STAFF REPORT | May 11,2013
Green Mountain Coffee Roasters will increase its single-serve K-Cup pack sales to Starbucks under a new five-year agreement, the companies announced.
Since GMCR and Starbucks entered into a partnership in 2011, Starbucks has shipped more than 850 million Starbucks coffee K-Cup packs.
With the new agreement, Starbucks will triple the amount of single-serve products offered for Keurig single cup brewers.
New brands will include Seattle’s Best Coffee, Torrefazione Italia coffee, Teavana Teas, and Starbucks Cocoa.
Financial terms of the agreement were not disclosed.
“Starbucks’ new agreement with GMCR strengthens our leadership position in the premium single cup category, the segment of our industry that has grown nine times faster than the overall coffee category during the past year and a category that now accounts for more than 25 percent of total coffee sales in grocery,” said Howard Schultz, Starbucks chairman, president and CEO. “The new agreement also affords us the opportunity to expand our successful K-Cup and Vue pack portfolio of products and brands beyond North America and to market them on a truly global scale over time.”
Brian Kelley, GMCR’s president and CEO said the agreement expands single-serve opportunities beyond North America. “We have been delighted with the performance of the Starbucks brand portfolio and are confident the Keurig system has significant, untapped potential to continue to change consumer behavior,” Kelley said.
With expanded availability and distribution, sales of Starbucks coffee K-Cup packs increased more than 75 percent in March 2013 over the previous year.
Last week, GMCR reported fiscal second quarter earnings of 93 cents a share over the same period last year.
Revenues increased 14 percent to $1 billion over the prior year period. Net income for the quarter was $140.9 million compared to $101.7 million a year ago.