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Green Mountain Coffee Roasters

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Green Mountain Coffee Roasters is launching Vue, a new single-serve coffee maker, in an effort to attract more affluent customers.

Vue will be priced at about $250, more than twice the price of a traditional Keurig brewer. The newly launched brewer has additional features that could adjust water pressure, timing and airflow to brew different ways and also includes separate dairy froth packs for adding foam. GMCR is expected to start selling Vue in the next few weeks.

GMCR faces stiff competition from Nestle, Mars, Kraft Foods and Philips Electronics among others.

See our full analysis and $62.72 price estimate for Green Mountain Coffee Roasters

Single Serve Coffee Market

Single serve coffee formats, a category that was in the nascent stage approximately five years ago, now accounts for 7.5% of the U.S. retail. The single serve market has been a major growth driver of the overall coffee industry in the U.S.

According to a recent study by National Coffee Association, penetration in the single serve space is growing at an average of 1% per year for coffee sales, according to Packaged Facts. [1]

Competition Intensifying in Single Serve Coffe Market

In the near future, GMCR is expected to face stiff competition from Wal-Mart as the latter is planning to introduce a more reasonable line of brewers at its stores. Going by reports, the price per serving is expected to be much lower than the average cost of Keurig’s K-Cups, which range from 60 cents to 90 cents each.

GMCR is focusing on innovation in order to maintain its dominant position in the once nascent single serve market. It is presently working with Lavazza to co-develop a new single serve espresso machine for North American consumers that would complement its Keurig single cup brewers. It is expected to be a direct competitor to the Nespresso machines by Nestle.

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With GMCR’s patents on the K-Cup coffee packs due to expire in September this year, it becomes all the more important for GMCR to keep innovating in order to stay ahead of competitors.

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Notes:

  1. Single-Serve Now 7.5% Of U.S. Coffee Sales, Media Post [↩]

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Article source: http://www.forbes.com/sites/greatspeculations/2012/02/22/green-mountain-launches-new-keurig-model-amid-increasing-competition/


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