Bloomberg News

Starbucks to Add K-Cup Brands in 5-Year Green Mountain Contract

May 08, 2013

Starbucks Corp. (SBUX:US), the world’s largest coffee-shop operator, announced it will add brands, including Seattle’s Best Coffee, to its K-Cup lineup with a five-year agreement with Green Mountain Coffee Roasters Inc. (GMCR:US)

The deal shows that while Starbucks last year introduced a single-serve machine called Verismo, it will continue to support Green Mountain’s Keurig brewer. Starbucks also will start selling cocoa and Teavana tea K-cups, the Seattle-based company said in a statement today.

Chief Executive Officer Howard Schultz is attempting to boost sales beyond the company’s coffee shops with its grocery business and with the recent acquisitions of Teavana Holdings Inc. and Bay Bread LLC. Revenue at the coffee brewer is projected to rise 12 percent to $14.9 billion in its fiscal 2013, compared with an 14 percent increase the year before.

Starbucks first reached an agreement with Green Mountain in March 2011 to sell Starbucks brand K-Cups. Sales of the coffee pods surged 75 percent in March compared with the previous year, the company said.

Starbucks rose 0.4 percent to $62.41 at the close in New York. The shares (SBUX:US) have gained 16 percent this year, while the Standard & Poor’s 500 Index has climbed 14 percent.

Starbucks has more than 18,800 stores worldwide, including about 11,100 in the U.S.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


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Companies Mentioned

  • SBUX
    (Starbucks Corp)
    • $79.44 USD
    • -0.59
    • -0.74%
  • GMCR
    (Keurig Green Mountain Inc)
    • $137.17 USD
    • -0.44
    • -0.32%
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