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Keurig to Pour Campbell Soup

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Did you ever imagine that your coffee machine will pour soup? In a partnership between soup company and specialty coffee maker, Campbell Soup Company (CPB) and Green Mountain Coffee Roasters, Inc. (GMCR) have come together to offer Campbell’s Fresh-Brewed Soup K-Cup packs.

Campbell, the leading soup brand in the U.S., recently announced that it is going to offer K-cup soup packs that can be instantly prepared through Green Mountain’s single-serve coffee machine, Keurig. The two companies have planned to introduce three types of K-cup soup packs next year, including Homestyle Chicken Broth & Noodle.

Campbell Soup has decided to sell its to-be launched K-cup soup packs only at those stores where Keurig Brewed K-cup varieties are sold. Therefore, it is likely that Green Mountain will partner with Dunkin’ Brands Group, Inc. (DNKN) and Starbucks Corporation (SBUX) to sell these soups, as these companies use Keurig machines.

Every K-cup soup pack will consist of a broth K-cup pack as well a packet of dry pasta and vegetable blend garnish, which can be easily added to a hot mug of soup. We believe that the recent development will enhance Campbell Soup’s product portfolio and open up an opportunity to cater to a wider range of customers.

In the past few months, Campbell Soup has been aggressively focusing on strategic acquisitions and partnerships to expand its international presence as well as packaged fresh food brand range. Last month, Campbell Soup completed the acquisition of Denmark-based Kelsen Group A/S from Maj Invest, a private equity firm. The strategic acquisition will boost Campbell Soup’s growth prospects in the Chinese market and increase its global footprint. In Jun 2013, the company forayed into the premium organic baby food category by acquiring Plum Organics.

Campbell Soup intends to boost its top line and increase returns on investments through strategic measures. During fiscal 2012, the company made significant progress in this direction, including stabilization of the North American soup and simple meal business, overseas expansion, and growth of healthy beverages and baked snacks businesses. We believe that Campbell Soup’s prudent investments and strategic initiatives toward product innovation and brand building will lead to an increase in its customer base and profitability.

Currently, Campbell Soup holds a Zacks Rank #4 (Sell).

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