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Green Mountain Coffee Roasters Inc.'s shares plunged to a 52-week low Monday after supermarket operator Kroger Co. said it will soon sell its own store-brand single-serve coffee pods, which could intensify competition with Green Mountain's offerings.
THE SPARK: Kroger confirmed Monday that it plans to start selling its own single-serve coffee products in September.
THE BIG PICTURE: As the nation's largest traditional supermarket operator, Kroger poses a major threat to Green Mountain. The Cincinnati-based company can reach a large base of consumers with its national chain of stores, which includes Ralphs, Food 4 Less, Fred Meyer and its namesake stores.
Green Mountain is facing intense competition as single-cup makers become more popular with consumers. Its Keurig machine and K-Cup coffee pods led the U.S. industry for some time, and revenue from K-Cups make up the bulk of its business.
Starbucks Corp. partnered with Green Mountain last year to sell single-serve coffee pods for use with the Keurig machine, but in March it announced it will also sell its own brewing machines.
Several companies have come up with their own brewers and coffee pods. And analysts say Green Mountain will be in a precarious situation come fall, when patents on some of its technologies expire, opening the door for more competition.
A representative for Green Mountain was not immediately available to comment.
SHARE ACTION: Green Mountain shares fell $1.81, nearly 8 percent, to close at $21.32. They have plunged since peaking above $110 in August and September.