Green Mountain Coffee Roasters Inc. (GMCR:US)’s prices were recently lowered in some grocery stores, according to data released today from SymphonyIRI Group.
Green Mountain single-cup coffee was 1.1 percent less expensive in the four weeks ended June 10 at food, drug and mass retailers excluding Wal-Mart Stores Inc. (WMT:US), compared with a year earlier, data from the Chicago-based researcher show. Packaged coffee prices for the overall category were up 4.9 percent in the four-week period.
The company is facing increased competition from private- label brands entering the single-cup coffee category as the main patents for its K-Cups expire in September. Kroger Co. (KR:US), the biggest U.S. grocery chain, said earlier this month that it’s planning to sell its own version of the pods used in Green Mountain’s Keurig brewers.
“Green Mountain is still a premium-priced product,” Kenneth Shea, senior consumer products analyst with Bloomberg Industries, said in an interview. “They have to keep pricing level or down if they’re going to fight this private-label threat.”
The shares fell (GMCR:US) 8 percent to $19.76 at the close in New York. Waterbury, Vermont-based Green Mountain has tumbled 56 percent this year.
Safeway Inc. (SWY:US), the second-largest U.S. grocer, makes cappuccino and hot cocoa capsules under its private-label Safeway Select brand that fit into Keurig machines. The Pleasanton, California-based supermarket recently said it is introducing five new single-serving coffee flavors at all its U.S. stores.
Green Mountain single-cup coffee cost $7.89 a unit, on average, whereas private-label brands were $5.43 and all coffee was $6.86 during the four-week period, the data show. Starbucks Corp. (SBUX:US) ground-coffee prices, at $8.97 a unit, were also lower at food, drug and mass retailers compared with last year.
“Single-cup continues to be a growth driver of the coffee category,” Suzanne DuLong, a Green Mountain spokeswoman, said in an e-mail. K-Cup prices may increase or decrease by about 3 percent and have been in a “pretty tight range” for the past 10 four-week periods, she said.
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