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Green Mountain Unites Canada Operations

Zacks Equity Research

Green Mountain Coffee Roasters Inc.(GMCR) is geared to consolidate its facilities in order to increase its functional effectiveness. The coffee giant is moving its Canadian coffee and portion pack operations to the Montreal facility.

GMCR is closing the operation of its Toronto, Ontario facility effective from Mar 5, 2014, as management feels that it will not be able to support future growth in Canada.

In Canada, GMCR has 1,800 employees and sells over 25 beverage brands. It operates through 31 Van Houtte Coffee Services, 62 Van Houtte Bistros and four roasting and production plants (Montréal and Toronto) and several warehouses across Canada.

The 120 laid-off production and production support employees will receive outplacement services by the coffee maker in order to support them through the transition process.

After closing its Toronto facility, Green Mountain will distribute its Keurig Brewer, K-Cup and Vue packs production for use in its Keurig brewers in eight facilities in the U.S. and Canada.

Management feels this consolidated facility will lead to efficient manufacturing and logistics.

GreenMountainis a growing company and it has several projects in the pipeline to expand both its ‘away from home’ and ‘at home’ channels. It aims to penetrate deeper into the American households and increase the number of Keurig installations in the American households.

From the beginning of this year, Green Mountain has been roping in beverage giants into its Keurig distribution system to increase the popularity of this single-serve brewer. In March, it formed a strategic alliance with Unilever plc. (UL) under which the Lipton iced teas will be available in the K-cups of GMCR’s Keurig business unit. Again, in May, the coffee major joined forces with The Coffee Bean & Tea Leaf to launch the Coffee Bean & Tea Leaf K-Cup for Keurig single-cup.

GreenMountain aims to popularize the single-cup brewing system in America and has therefore, entered into several strategic distribution agreements to rope in popular brands like Dunkin’ Brands Group Inc. (DNKN) and Starbucks Corporation (SBUX).

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.

GreenMountaincurrently carries a Zacks Rank #1(Strong Buy).

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