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Keurig Green Mountain, Inc. Message Board

  • trangy trangy Oct 12, 2012 3:59 PM Flag

    GMCR has problem with Kraft producing k cup.

    Because the margin of machine is very low. The main profit comes from the cup. The same thing is true with computer printer and ink.

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    • I am very likely to give up my Timothy's Italian Blend every morning for Maxwell House.....NOT!!!! People that buy Maxwell House do not buy Keurig brewers. They buy a traditional coffee maker and brew it by the pot.

      The whole reason that Kraft is trying to enter this market is for.... HIGHER MARGINS. They are not entering it for cut rate sales. They want the fat margins GMCR enjoys. I am not worried in the slightest. Shorts are toast here, it all just a matter of when it happens at this point.

      • 1 Reply to clemtig86
      • You won't give your Timothy's up & neither will other loyal Maxwell House (or whatever traditionally brewed brand) coffee drinkers.

        Some people are lazy & that's the appeal of the Keurig machine.
        The Keurig design makes you feel like you're actually preparing an espresso/cappuccino (a subtle subliminal illusion...) but without all the mess of a real espresso/cappuccino machine.
        The fact that they offer a lot of tasty choices is of course a huge plus.

        I personally drink coffee made with a stove top percolator (sometimes Community - sometimes Chock Full O Nuts - sometimes a fine ground Brasilian called 3 Coracao.)
        I don't mind the mess & will only drink K-Cups when they are conveniently found in a hotel or office.

        IMHO Kraft's entries could achieve moderate success but will probably not be around long without a licensing agreement with GMCR (or SSUX) & a nice branding campaign.

        By the way; has anyone heard of Smuckers/Folgers parting ways with GMCR to do their own K-Cups?

        I will however continue to hold my GMCR at an average cost of $18 & change; until the Feb earnings report & possibly beyond...

        Sentiment: Buy

    • No, not the same. We don't have to drink the ink so we don't care as much. People care when it's something they enjoy drinking and will pay for better quality.

      Sentiment: Strong Buy

    • Tassimo will be dud if k-cup sales of kft takes share.They will strike the hammer on their foot with it. Verismo is already losing its bet and people are returning them back either for a nespresso machine or Keurig. Some will even wait for Rivo. Good thing is GMCR can say "Heads I win, Tails you lose" . Verismo, even if it would have won would have killed SBUX store sales and make GMCR very attractive FPE. IF it loses, SBUX is dependent on K-cups sales. If SBUX wants to enter the VUE and the Rivo segment, then they will have to maintain stronger partnership with GMCR. Otherwise they will lose fast in the fast growing single serve business. Snapple deal is another example of how brands would need to partner with GMCR. If SBUX moves out of the GMCR license, then they will struggle a lot. Infact might even go out of the single serve business. Again good for GMCR.

    • entertainmentinvestlng entertainmentinvestlng Oct 12, 2012 11:58 PM Flag

      Here's how I see this. Think about the current kraft's coffee customers. When Kraft introduces K-cup to their customers, Keurig gets a free advertising to them who always buy a bag of coffee at a time. And, there is something that Kraft doesn't see it - when the customer knows that they can try many different types of products using Keurig, they will try what Keurig's k-cups are offering like lemonade/ice tea/premium coffee with different tastes.

      This is the gap between the producer and the consumer - each has very different views on product. Kraft may believe that its customers are royal, but the reality is that people always want the better diversity in product offerings.

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