Green Mountain Coffee Roasters Inc. (GMCR) and Canada’s popular chocolate maker, Laura Secord, have entered into an agreement to widen homemade single-serve beverage options for Keurig users. Under the five-year agreement, Laura Secord’s hot chocolate will now be available in K-Cup packs that can be used on Keurig brewers.
Green Mountain produces coffees, teas and other hot beverages sold in K-Cup and Vue portion packs which can be used on single-serve Keurig brewers for making hot beverages.
Laura Secord will distribute its upcoming creamy hot chocolate varietyscheduled to launch in 2014 fall in Keurig K-cups. The agreement also includes the hot chocolate varieties to be launched in fall 2015. The Laura Secord Hot Chocolate K-cups will be available at the online shopping sites of Keurig and Laura Secord along with the participating shops, grocery, retail and Away-From-Home channels throughout the U.S.
The deal will boost Laura Secord hot coffee sales as the convenience of Keurig brewers will enhance the popularity of its beverage among Keurig fans. Moreover, the pact furthers Green Mountain’s goal of sustaining its dominance in the single-serve brewing market after the expiry of its K-cup patents in Sep 2012.
Green Mountain Coffee aims to popularize the single-cup brewing system in America and has signed several strategic distribution agreements to rope in popular brands like Dunkin’ Brands Group Inc. (DNKN) and Starbucks Corp. (SBUX) into its portion pack systems.
To maintain its dominance in the single-serve brewing category, Green Mountain is stepping into the world of cold beverage and soda. The company will launch ‘The Keurig Cold Machine’ for making sodas, sports drinks and other beverages at the touch of a button. Like its coffee machines, the cold machine would use pods to make a variety of drinks.
In order to increase its brand power it has inked a 10-year partnership deal with the beverage giant The Coca Cola Co. (KO), under which Green Mountain will exclusively make Coca-Cola branded pods for use on its upcoming Keurig Cold at-home beverage system. Coca-Cola will also work with Green Mountain on the development and launch of this latest version of Keurig single-cup brewer.
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.
Green Mountain, which carries a Zacks Rank #4 (Sell), has been witnessing decline in sales of brewers and accessories due to unfavorable product mix and price realization and decline in accessory net sales. Such agreements may offset declines for the upcoming quarters.