Just how hot is the Mountain that is Green?
by Chee Leng
Green Mountain Coffee Roaster is hot. I mean this parent of Keurig and k cups has some very well established companies as partners and suitors.
And although it just been investigated and cleared from some accounting mambo jumbo, it remains to be an attractive purchase and joint venture partners.
For one, it is the king of single serve coffee brewer in US, secondly, it is selling loads of coffee.
Read about how much keurig is making: Money in the single serve segment
It has partners like J.M Smucker (parents of folgers and Millstone), Lavazza and even Mr. Coffee.
The sudden interest in keurig other than its investigation is of course the rumors about Nestle potentially purchasing this company.
And the rumor might be true. Nestle knows that single serve coffee maker is a money spinner. For a few years, its Nespresso unit has been the most profitable.
This profit is mostly generated from the Europe market where it is selling machines like hot cakes.
But, in the states, other than Keurig getting a huge slice of the market, Nespresso have to compete with Senseo, tassimo, melitta and many other brands.
It is not the market leader in US, it is in fact nowhere near. It is launching a low cost Dolce Gusto in US, but we all know how difficult it is to launch a new product.
If you a consumer, you would rather buy the popular brands right?
Buying Green Mountain Coffee Roaster is the easiest and fastest way to getting and owning the single serve coffee market in the US.
It has done the same thing when it purchased Carnation milk about two decades ago and it might do it again.
So, you have companies wanting to joint venture with it, and the world largest food company looking to buy over it. I do not think the investigation should affect the stock prices of GMCR...it is still hot.