Green Mountain Coffee Roasters (NASDAQ:GMCR) sells more than 200 varieties of K-Cup portion packs including brands of coffee, tea, hot apple cider, iced teas, hot cocoa and other dairy-based beverages. GMCR’s impressive portion pack portfolio with wider offerings for customers has helped it maintain a dominant position in the market. Presently, K-Cup portion packs and Keurig single-cup brewers and related accessories contribute approximately 84% to its revenues. In the U.S., GMCR is the dominant player and controls over more than three-quarters of the market. In coffee makers, GMCR competes with Robert Bosch, Nestle, Mars, Bunn-O-Matic and Philips Electronics, among others.
Key Factors Driving GMCR
Strong K-Cup Portion Pack brands portfolio
- GMCR offers its consumers the ability to choose from over 200 varieties of K-Cup portion packs. It K-Cup portion pack brands include some of the prominent brands including Caribou Coffee, Dunkin’ Donuts, Kahlua, Starbucks, Diedrich Coffee, Millstone, Gloria Jean’s, Café Escapes and Coffee People.
Focus on innovation and R&D
- GMCR is presently working with Lavazza to co-develop a new single serve espresso machine for North American consumers that would complement its Keurig single cup brewers. It is expected to be a direct competitor to the Nespresso machines by Nestle.
- It also has a new Keurig filtered coffee brewing platform in development and is currently under consumer testing. It expects to produce portion packs for this new single serve brewing platform in 2012.
- With GMCR’s patents on the K-Cup coffee packs expiring in September this year, it becomes all the more important for the company to keep innovating to stay ahead of competitors.
Partnerships help in broadening customer reach
- GMCR is keen to develop partnership opportunities with other firms. These partnerships would help create additional K-Cup products that would eventually boost consumer demand for the Keurig single cup brewing system.
- In 2011, the company entered into a multi-year manufacturing and distribution agreement, under which it would manufacture K-Cup portion packs for Dunkin’ Brands, Starbucks and Tazo Tea.