Starbucks Might Sever Ties With Keurig But Remains Committed To K-Cup Market

SEATTLE -- The five-year-old alliance between Starbucks Corp. and Keurig Green Mountain Inc. looks like it's on shaky ground. In Starbucks' first-quarter earnings call on Jan. 21, chief executive Howard Schultz said that, while the company plans to continue to sell its coffee in K-Cup packaging, its relationship with Keurig may not continue.

Schultz said: "I want to assure retailers, the millions of consumers who demand Starbucks branded coffees to their Keurig brewers, many of whom have told us that they actually purchased a Keurig brewer only after Starbucks coffee became available in the platform and at the market that we are in the K-Cup business to stay. However, at this moment, the only matter that remains unresolved is whether we will be doing so in conjunction with Keurig or on our own."

The Starbucks chief described the partnership with Keurig as a "wait-and-see situation," promising that there would be no dilution of Starbucks' ability to deliver to the market, no matter the decision.

Keurig and Starbucks announced their partnership to bring Starbucks coffee and Tazo tea to the Keurig single-cup brewing system in March 2011. | SEE STORY

Recent rumors about a possible breakup closely follows Keurig's announcement in December that it is being bought by an investor group led by JAB Holding Co. for about $13.9 billion. | SEE STORY

JAB Holding Co. also owns Caribou Coffee, Peet's Coffee & Tea (which purchased gourmet retailer Stumptown Coffee Roasters in 2015) and such international brands as Bach Espresso and Bravo, among other coffee chains and roasters. Industry watchers are saying that the holding company is attempting to become a dominant player in the global coffee market and major Starbucks rival.

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