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Issue Date: Vol. 48, No. 11, November 2008, Posted On: 11/17/2008


Green Mountain Debuts Keurig Brewer And Retail K-Cup Packs, Reports Strong Q4 Sales


Emily Jed
Emily@vendingtimes.net

WATERBURY, VT — Green Mountain Coffee Roasters Inc. reports that its Keurig and Green Mountain Coffee divisions will market a new single-cup brewer and 12-packs of K-Cups to grocery stores across the country. The parent company also posted strong sales for the full 2008 fiscal year, attributed to increased volume in K-Cup and brewer sales, and royalties from K-Cup sales.

The new "Classic" single-cup brewer model is designed exclusively for sale in the grocery channel. Green Mountain Coffee has rolled out a new compact 12-count box of K-Cups, available in 10 different coffee varieties, including Fair Trade Certified and organic offerings. The 12-count packaging is specifically designed to fit on supermarket shelves and responds to consumer requests for coffee in smaller packages so they can try more varieties.

Keurig brewers and Green Mountain K-Cups are now available at more than 17,000 outlets, including retailers, department stores, supermarket chains and independent grocers across the country.

To support accelerated growth and enhance brand awareness, Keurig and Green Mountain Coffee are investing in a $15 million-plus marketing effort this holiday season, including Keurig's first national TV advertising campaign. Other marketing initiatives include co-op advertising, promotion and merchandising support, in-store demos and direct mail programs.

Green Mountain Coffee Roasters Inc. reported strong sales and even stronger earnings growth for the fourth quarter ended September 27, 2008, and the full 2008 fiscal year. Net income for the fourth quarter increased 99% to $7.1 million from $3.6 million in the comparable 2007 quarter. Quarterly net sales totaled $134.8 million, a 45% increase over $93 million reported in the fourth quarter of 2007.

During the fourth quarter, 273 million K-Cups were shipped systemwide by all Keurig licensed roasters, up 62% over the year-ago quarter.

Year to date, the company recorded net sales of $500.3 million, up 46% from $341.7 million for the comparable 2007 period. Net income for fiscal 2008 increased 74% to $22.3 million, versus $12.8 million the prior year.

Net sales for the Green Mountain Coffee segment during the fourth quarter were up 38% to $84.5 million from $61.2 million a year earlier. Dollar sales growth was strongest in the channels that benefited from sales of the Keurig K-Cup portion packs, including reseller, office coffee service, consumer direct and supermarket channels. Coffee, tea and hot cocoa pounds shipped increased 12% in the 2008 quarter over the prior-year period.

The company increased prices in May 2008 by 8% to 12% on average across business channels and package types for coffee products sold by its Green Mountain Coffee division. This move came in response to rising green coffee costs and increases in prices of other raw materials, along with higher energy and transportation costs.

For the Keurig segment, fourth-quarter net sales were $74.6 million, up 75% from $42.6 million in the comparable 2007 quarter. The increase was primarily due to higher K-Cup and brewer sales and royalty income from the sales of K-Cups. A royalty rate increase of 1¢ on all systemwide K-Cup portion packs took effect in August.

Green Mountain forecasts total consolidated net sales growth of 45% to 55% for the first quarter of 2009 over the prior-year quarter. For the full year, the company provided guidance of sales growth of 40% to 45% and total K-Cup portion packs shipped systemwide by all Keurig licensed roasters to increase in the range of 50% to 60%.


Topic: Coffee Service News

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