November 12, 2010
10:24 EDT CBOU, SBUX, GMCR, PEET
theflyonthewall.com: Starbucks has big plans for at-home coffee market, says UBS
Starbucks' founder and CEO Howard Shultz said in an interview that the company will sell single-serve brewing machines and pods. UBS said this news corroborates their view that Starbucks has grand plans for the at-home coffee market. :theflyonthewall.com
November 5, 2010
10:43 EDT SBUX, GMCR
theflyonthewall.com: Starbucks may see a solution with Green Mountain, says Canaccord
Canaccord said Starbucks (SBUX) plans to end its distribution relationship with Kraft (KFT) for packaged coffees. The analyst said if Starbucks searches for a non-Via single-cup platform, Keurig could be the solution. They would view a Starbucks deal for Green Mountain (GMCR) as a material positive as cannibalization would likely be more than offset by expanded penetration. :theflyonthe
Now do you get it??
Pete likes this one.
Seems SBUX is backing off the original statement, maybe they are not going to come out with thier own machine?
SEATTLE--(BUSINESS WIRE)-- Statements coming out of multiple news reports from China by Starbucks (SBUX:$30.13,00$-0.61,00-1.98%) chairman, president and ceo, Howard Schultz, were mischaracterized by the press.
Starbucks Coffee Company (SBUX:$30.13,00$-0.61,00-1.98%) recognizes the dynamic growth in the single-serve category and is pleased with the success of Starbucks (SBUX:$30.13,00$-0.61,00-1.98%) VIA® Ready Brew, our first entry into this category. In its first year, Starbucks VIA® reached nearly $135 million in sales, making it a “mega hit” as categorized by SymphonyIRI.
Consistent with our prior statements, we look forward to providing Starbucks (SBUX:$30.13,00$-0.61,00-1.98%) customers with more ways to enjoy Starbucks® coffee, one cup at a time.
Source: Starbucks Coffee Company
Good info. Thanks.
Between 1/07 and 10/08 was Kraft selling product?
Kraft settled. Recieved world-wide distribution on a non-exclusive basis.
Did the court find in favor of Kurig's patents?
Doesn't sound like it.
Sounds like the patent protection question may still be open to discussion.
If Starbucks undertook to selling without a license, seems to me all GMCR could do is file suit.
And, the last time, that took 22 months to resolve. And, the cost was only $17 million.
Patents don't "guarantee" market dominance. Sometimes thay only serve as a place from which to begin an argument, the resolution of which may take a very long time.
The only question that matters today is "How much of an earnings hit will GMCR take because of the audit and will it be material enough to cause plaintiff's attorney to continue to move forward with its class action lawsuits".
so bottom line is that Starbucks can't make a machine. well they could I guess, but they will have to pay GMCR a big license fee. It sure looks like they are stuck with the crappy Bosch/Tassimo style machine. You can trust they will switch to putting Starbucks in K(style)-cups when the patents on the k-cup itself expires. And I am sure Starbucks will get their fair share of the market, but at whose expense? They will mostly cannibalize their own retail traffic at their stores where their devotees still drink and buy their coffee.
<quote> but no one can mfr and sell a machine that punctures a k-cup or any other device/cup that would be punctured to make a beverage other than GMCR and their licensees. <end-quote>
Who would want to manufacture a machine if it is a losing business? GMCR does not make any money making the brewers - they actually lose money. Why wouldn't SBUX want to capitalize on that.
lots of good points, but I would add, I am not going to buy a brewer that only brews Starbucks coffee. Regardless of how much my wife likes it, I like the variety GMCR gives me. Starbucks would be up and running quickly with a license agreement with Kuerig.
Yea I get it. SBUX is going to compete with GMCR and roll them down the hill. Maybe PEET and GMCR will merge with their market caps get to be the same size. PEET down worse than GMCR right now fyi. Oh - didn't they beat earnings this quarter? Now trading at same level as pre-earnings. And CBOU, down 4% after its beat. Good stuff.
Starbucks’ coffee machines and coffee capsules will be an extension of the Via brand, which launched in March as an instant coffee product sold first only in the company’s store
Turn out the lights.
September 28, 2010
17:01 EDT GMCR
theflyonthewall.com: Green Mountain announces SEC inquiry, overstatement of income
In connection with the preparation of its financial results for its fourth fiscal quarter, the company’s management discovered an immaterial accounting error relating to the margin percentage it had been using to eliminate the inter-company markup in its K-Cup inventory balance residing at its Keurig business unit. Management discovered that the gross margin percentage used to eliminate the inter-company markup resulted in a lower margin applied to the Keurig ending inventory balance effectively overstating consolidated inventory and understating cost of sales. Management determined that the accounting error arose during fiscal 2007 and analyzed the quantitative impact from that point forward to June 26, 2010. As of June 26, 2010, there is a cumulative $7.6M overstatement of pre-tax income. Net of tax, the cumulative error resulted in a $4.4M overstatement of net income or a $0.03 cumulative impact on earnings per share. After evaluating the quantitative and qualitative aspects of the error in accordance with applicable accounting literature, including Staff Accounting Bulletins published by the SEC, the company, with the participation of the audit committee of the Board of Directors, has determined that the correction in the margin calculation represents a correction of an error in accordance with Accounting Standards Codification 250 Accounting Changes and Error Corrections, that the correction was not material to the fiscal years and the respective quarters ended 2007, 2008 and 2009 and that the company anticipates that the correction will not be material to fiscal year 2010 and the respective quarters of fiscal 2010. As a result, the company anticipates the cumulative amount of the accounting correction will be made in the quarter ended September 25, 2010. On September 20, 2010, the staff of the SEC’s Division of Enforcement informed the company that it was conducting an inquiry and made a request for a voluntary production of documents and information. Based on the request, the company believes the focus of the inquiry concerns certain revenue recognition practices and the company’s relationship with one of its fulfillment vendors. The company, at the direction of the audit committee of the company’s board of directors, is cooperating fully with the SEC staff’s inquiry.
So unless the SEC or auditors found ANOTHER accounting irregularity, this is NOT the reason for the earnings "delay".