Lipton Pours Tea in GMCR's K-Cups

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Tea lovers can now sip Lipton hot and iced teas offered by Unilever plc. (UL) in K-Cup and Vue packs. Unilever North America has entered into an agreement with Green Mountain Roasters Inc. (GMCR) for distribution of Lipton’s products.

The pact  furthers Green Mountain’s goal of sustaining its dominance in the single serve brewing world even after the expiry of the patents related to its K-cups in Sep 2012.

Lipton teas in K-Cups and Vue packs will be served in the U.S. and Canada starting from the summer of 2013. While the Lipton hot tea will form a part of the Green Mountain’s beverage family brewed in the Keurig brewing system, the iced refreshments will join the company’s Brew Over Ice collection.

The Keurig business unit of Green Mountain is a pioneer and leading manufacturer of gourmet single-cup brewing systems. It sells beverages produced by other business units of the company through At Home and Away From Home channels.

The tie up will benefit Unilever, by boosting sales of its beverage among the Keurig fans, as the package of refreshing hot and iced tea combined with the convenience of Keurig brewer is expected to be more popular among tea lovers. Green Mountain sells K-Cups under different brands including Caribou Coffee, Gloria Jean’s and Van Houtte.

Green Mountain Coffee has aimed at popularizing the single-cup brewing system in America and has entered into several strategic distribution agreements to rope in more and more popular brands like Dunkin’ Brands Group Inc. (DNKN) and Starbucks Corporation (SBUX) into its portion pack systems.

Through these agreements, Green Mountain is aligning with the strongest beverage brands to support a range of consumer choices and taste profiles in Keurig Single-Cup Brewing system.

In May 2012, the company bagged a multi-year agreement with Eight O'Clock Coffee Company, by virtue of which the brands like Eight O' Clock coffee, Tetley tea, and Good Earth tea were made available in K-Cup and Vue packs for Keurig Single-Cup Brewing systems.

The company is also upgrading its Keurig brewing system to attract more customers in the face of increasing competition from new entrants like Starbucks Corporation. The launch of Starbucks' own single-cup at-home coffee machine called Verismo in mid-October forced Green Mountain to roll out affordable and innovative products to capture market share.

Green Mountain is also focusing on competing with private labels, as it has entered into an agreement with Costco Wholesale Corp. (COST) under which it will produce private-label Costco Kirkland and Signature brand K-Cup packs for the Keurig single-cup brewing system. Green Mountain currently carries a Zacks Rank #1 (Strong Buy).

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