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Starbucks And Green Mountain Ink Keurig Deal

Posted On: 3/10/2011

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K-Cup, office coffee service, OCS, Keurig, single-cup coffee brewer, Starbucks, Tazo tea, Green Mountain Coffee Growers, vending, vending business

WATERBURY, VT -- Starbucks coffee and Tazo tea will soon be available in K-Cups for use in the Keurig single-cup brewing system.

The companies announced a deal with Green Mountain Coffee Roasters Roasters on March 10 that designates Starbucks as the exclusive licensed super-premium brand for the brewer for the duration of the agreement. Terms of the agreement were not disclosed.

The Seattle coffeehouse chain and Vermont coffee roaster plan to sell Starbucks K-Cups through wholesale clubs, drugstores and grocery stores in North America starting this fall. Starbucks cafés will begin selling Green Mountain's Keurig brewers and Starbucks K-Cups in early 2012.

The announcement sent Green Mountain shares soaring 26% and lifted Starbucks shares by 6%. Green Mountain shares were up $11.36 at $55 in premarket trading on March 10. Starbucks shares were up $2.11 at $36.65.

News of the pact came nine days after Starbucks terminated its distribution agreement with Kraft, under which Starbucks provided coffee discs for Kraft's Tassimo one-cup home brewer and Kraft distributed Starbucks coffee at retail. Kraft is seeking to be paid fair market value for losing the business, which reportedly brought the company about $500 million a year in revenue. | SEE STORY