Starbucks and Keurig’s relationship looks like it is on shaky ground.
In Starbucks’ first quarter earnings call on Thursday, CEO Howard Schultz said that, while the company plans to continue to sell K-Cups, its relationship with Keurig may not continue.
“I want to assure retailers, the millions of consumers who demand Starbucks branded coffees to their Keurig brewers, many of whom have told us that they actually purchased a Keurig brewer only after Starbucks coffee became available in the platform and at the market that we are in the K-Cup business to stay,” said Schultz. “However, at this moment, the only matter that remains unresolved is whether we will be doing so in conjunction with Keurig or on our own.”
Schultz went on to call its partnership with Keurig a “wait-and-see situation,” promising that no matter the decision, there would be no dilution of Starbucks’ ability to delivery to the market.
The allusions to breaking up the partnership with Keurig come after the December announcement that Keurig is being bought by an investor group led by JAB Holding Co for about $13.9 billion.
JAB Holding additionally owns a number of coffee chains, including Caribou Coffee, Peet’s Coffee & Tea (which purchased gourmet retailer Stumptown Coffee Roasters in 2015), and international brands such as Bach Espresso and Bravo. Experts have said that JAB Holdings’ acquisition of Keurig is part of an effort to “dominate the world” of coffee — making the company a major Starbucks rival.
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