CF--here is a RE-POST from back in Spring of this year where SBUX CEO specifically commented on GMCR and said SBUX was not going to sit back and let GMCR grab 20% to 30% home market share:
SBUX reported earnings today, and here is an article on earnings where Sbux CEO is questioned about Keurig and GMCR--interesting comments--and SBXU actually has a tdisc for the Tassimo machine and he makes no mention of that:
Starbucks' 2Q profit soars, revenues climb
Apr. 21, 2010 (McClatchy-Tribune Regional News) -- Starbucks' second-quarter profit rose eightfold to $217.3 million, or 28 cents a share, from $25 million, or 3 cents a share, a year earlier, the company reported Wednesday.
Sales were up 8.6 percent to $2.5 billion, and same-store sales grew 7 percent.
The same-store sales figure is higher than it has been since the second quarter 2006, when it was 10 percent. Same-store sales is a key performance measure for stores open at least a year, letting companies and investors know whether sales growth is sustainable or based on new stores.
CFO Troy Alstead told analysts on a conference call that Starbucks' internal customer satisfaction measurements also improved dramatically, more than at any time in the company's history, indicating "the improvement we're seeing is real and sustainable."
CEO Howard Schultz reiterated news he made on a trip to Asia last week, saying that Starbucks expects China to become its biggest market, and that the company is interested in opening shops in India and Vietnam.
Starbucks has been in China for a decade, and Schultz said in 2005 that it took a couple years -- and about 100 stores -- to gain traction there. He said that he couldn't "imagine a more dynamic, larger opportunity than China -- if done well."
It backed away from plans to open in India three years ago, after having trouble with business applications there.
The company now has 16,664 stores in 51 countries, down about 200 shops from a year ago because of store closures.
Schultz also said he'd seen McDonald's strong earnings report Wednesday and heard what the burger chain said about its coffee sales improving.
"If they're getting incrementality on coffee, they're not getting it from us," Schultz said.
And, Schultz said Starbucks is well aware of the single-serve coffee machines made by Keurig that have become a blockbuster success for Green Mountain Coffee Roasters (NASDAQ:GMCR) of Vermont.
Starbucks' instant coffee Via, which rolled out this month in Japan, "has an interesting opportunity to position itself in a way against what Keurig is doing at home, because there's no waste, there's no cost of equipment, and you can take Via anywhere," Schultz said.
"We're not going to sit back and just watch Green Mountain and Keurig march their way into 20 to 30 percent household penetration without Starbucks doing anything. So just stay tuned," he said.
Melissa Allison: 206-464-3312 or firstname.lastname@example.org
So here's KRAFT TASSIMO's new advertising strategy:
The numbers say more about GMCR/KEURIG since Keurig brewers own the single serve category.
Here's my post on the recent 10-Q filed a few days ago by by KFT
(Definately a "disconnect" between actual sales and advertising-note that in the KFT Tassimo advertising annoucement that there is no talk of specific figures for Tassimo- just broad figures about the single-serve category)
And since this advertising annoucement comes at the same time as the SBUX/KRAFT "distribution break-up" annoucement I wonder how the "war-rooms" of KFT & SBUX are going to proceed...? (new partners etc?)
There are times in a company's existence when a critical mass has been reached and that company needs more firepower to take it to the next level.
GMCR is still in the entrepenurial stage. But to get to the next level professional managers need to be brought in and serious money needs to be spent.
GMCR cannot afford a major ad
vertising campaign due to limited funds. Can you just imagine how sales would catapult with a major campaign that a giant company could pull off easily.
The job the folks at GMCR has done so far has been ADMIRABLE! However perhaps the day to leap to the next level has come.
In addition Mr. Stiller is in his late 60's and might want to retire and count his mmoney, which would amount to over one billion.
We have all agreed that single serve is in the first few innings, just imagine what a company like KO, Nestles can do to the growth rate. Advertising, promptions. They can force more distribution in ares of the country where GMCR is not as yet in or is weak. No retailer can say no to KO etc.
Many here have said in a few years GMCR willm be that much stronger for a buyout and that is probably true, but KO, Nestles, SBUX have their own agenda and it might not coincide with some of those on this board.
There has been increased "chatter" about a takeover and I for one have always believed "where there is smoke there is fire".
A few have mentioned an alliance with SBUX. Maybe SBUX doesn't need any alliance with GMCR.
The are a much bigger and stronger company finacially.
Mkt cap is over 22 biliion. Mkt cap of GMCR is under 5 billion. SBUX pays a dividend that yilds 1.68&. Also I imagine their credit rating is MUCH heathier that GMCR's.
So SBUX can easily take GMCR out if it wants. Cash plus stock- easy.
I think many here have become emotionally attached to GMCR- that is understandable as the share price has risen so dramatically and we long time holders have watched this company grow. To some its been our baby!
Fact of life is that at some point GMCR will be bought out.
Just a matter of time and I think sooner rather than later.
As the saying goes " ITS JUST BUSINESS"
I'm just saying.......
Let's just say that any potential SBUX/GMCR k-cup alliance significantly ratchets up the acquisition price for those companies previously mentioned....Coke, Pepsi, Kraft, Unilever, etc.
If there is an alliance made with Starbucks, I would guess that GMCR would stay an independent company for at least five years as growth would first come domestically and then serve as a huge launching pad for international expansion.
Do I think the alliance will happen? No...I say odds are 75/25 against. But at least i can dream and be surprised.
I wasn't even commenting on their ill-conceived campaign into instant coffee; I was thinking in terms of distributing their coffee through Kcups and using the single-serve brewers to free up the baristas for the more complex beverages. That is a business arrangement I could see working for both companies.
Good anyway you look at it for GMCR....at the least this now ties SBUX & KFT up in litigation (hopefully) just like GMCR is tied up with all the "legal junk" now.
(Good to see the competition fighting it out for once-diverting them from the true task at hand)
The scenario is that Kraft is the only company of the two that would be making an offer to buy GMCR.
SBUX would only partner up with Keurig/Green Mountain.
A buyout by SBUX wouldn't fly because all the other GMCR partners who are involved with k-cups (such as Sara Lee) don't want to have their coffee distributed by Starbucks.