Keurig Green Mountain Expands Partnership with Caribou

Keurig Green Mountain Inc. (GMCR) is geared to popularize the single-cup brewing system in the U.S. and in this regard, has signed several strategic distribution agreements with well-known coffee brands to distribute their coffee in its portion packs.

Closely following a manufacture and distribution deal with Community Coffee and takeover of the Laughing Man Coffee and Tea brand, Keurig Green Mountain renewed its 10-year partnership with Caribou Coffee. Under the agreement, Keurig Green Mountain gained the right to manufacture, market, distribute and sell Caribou coffee in Keurig K-Cups. The Caribou coffee K-Cups will be available in Carafe format to be used in the newly launched Keurig 2.0 brewing systems and Keurig Bolt carafe brewing system.

The association between Keurig Green Mountain and Caribou dates back to 2007 when the two companies entered into a partnership to market eight blends of Caribou coffees in K-Cup portion packs to be brewed in Keurig brewers. The present partnership is an expansion of the previous one and includes all the Caribou coffee blends in carafe formats compatible with Keurig brewers. Caribou Coffee K-Carafe packs are expected to be available from spring 2015.

Keurig Green Mountain produces coffees, teas and other hot beverages which are sold in K-Cup and Vue portion packs. These portion packs can be used on single-serve Keurig brewers for making hot beverages.

The deal will boost Caribou Coffee sales as the convenience of Keurig brewers will enhance the popularity of its beverage among Keurig fans. Moreover, the deal furthers Keurig Green Mountain’s goal of sustaining its dominance in the single-serve brewing market after the expiry of its K-Cup patents in Sep 2012.

Keurig Green Mountain has signed several strategic distribution agreementsto rope in popular brands like Dunkin’ Brands Group Inc. (DNKN) and Starbucks Corp. (SBUX) into its portion pack systems.

Moreover, to maintain its dominance in the single-serve brewing category, Keurig Green Mountain is stepping into the world of cold beverage and soda. It will launch its new Keurig brewer — The Keurig Cold Machine — which will make sodas, sports drinks and other beverages at the touch of a button. Like its coffee machines, the cold machine would use pods for the various drinks.

In order to increase its brand power, Keurig Green Mountain has inked a 10-year partnership with the beverage giant – The Coca Cola Company (KO). Under the deal, the coffee maker will exclusively produce Coca-Cola branded pods to be used on the Keurig Cold Machine for making cold beverages. Coca-Cola will also work with Keurig Green Mountain to develop and launch this latest version of Keurig single-cup brewer.

Through these agreements, this Zacks Rank #2 (Buy) company is aligning with major beverage brands to support a range of consumer choices and taste profiles in Keurig single-cup brewing system.

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