Green Mountain coffee announced it’s entered into a five-year deal with Starbucks.
The company also posted EPS of $0.93 beating estimates by $0.20.
Revenue of $1 billion, a 14% increase, was in-line.
Trading in Green Mountain has been halted on the announcement.
SEATTLE & WATERBURY, Va.–(BUSINESS WIRE)– Starbucks Coffee Company (NASDAQ: SBUX), the worlds largest coffee retailer, and Green Mountain Coffee Roasters, Inc. (GMCR) (NASDAQ: GMCR), a leader in specialty coffee and coffeemakers, have signed an agreement that provides for the expansion of their successful partnership for the manufacturing, marketing, distribution, and sale of Starbucks- and Tazo-branded single serve packs for use in GMCRs Keurig® single serve brewing systems globally.
Starbucks and GMCR first entered into partnership in March 2011. Following a very successful product launch, Starbucks has shipped more than 850 million Starbucks® coffee K-Cup® packs. Todays announcement recognises the tremendous success of the Starbucks and GMCR strategic relationship, and both companies desire to broaden, deepen and significantly extend their partnership.
The new, minimum five-year agreement announced today is a global single-serve coffee industry game changer. Under the new agreement, Starbucks will add brands and varietals to the already robust Starbucks® K-Cup® and Vue® pack portfolio of offerings for Keurig® single cup brewers, ultimately tripling the number of Starbucks® products and adding brands offered on the Keurig® platform. New brands will include Seattles Best Coffee®, Torrefazione Italia® coffee, Teavana® Teas, and Starbucks® Cocoa. The new agreement reinforces Starbucks position as the exclusive licensed super premium coffee brand on the Keurig® K-Cup® and Vue® platforms, and further extends the Keurig® systems position as the exclusive low-pressure single cup brewing system for fresh-brewed Starbucks® coffee, Tazo® tea and the aforementioned Starbucks brands. Financial terms of the agreement were not disclosed.
Starbucks new agreement with GMCR strengthens our leadership position in the premium single cup category, the segment of our industry that has grown nine times faster than the overall coffee category during the past year and a category that now accounts for more than 25 per cent of total coffee sales in grocery, said Howard Schultz, Starbucks chairman, president and ceo. The new agreement also affords us the opportunity to expand our successful K-Cup® and Vue® pack portfolio of products and brands beyond North America and to market them on a truly global scale over time. It’s a win-win-win agreement for both companies and for premium coffee consumers around the world. Going forward, not only will Starbucks continue to leverage GMCRs growing installed Keurig® brewer base totaling millions of North American households, but GMCR will directly benefit from the many Starbucks brand assets we bring to bear on the coffee marketplace as it pursues global expansion of its business and platform.
With steady, strong consumer adoption, our innovative Keurig® brewing system has proven to be a disruptive technology for the hot beverage category, providing consumers the benefits of convenience, consistent great taste and importantly beverage variety, while providing our partner brands a valuable channel for growth. This agreement further strengthens our North American partnership with Starbucks and expands our relationship to explore global single-serve opportunities, said Brian P. Kelley, GMCRs President and CEO. We have been delighted with the performance of the Starbucks brand portfolio and are confident the Keurig® system has significant, untapped potential to continue to change consumer behaviour. And we are looking forward to offering a greater variety of premium Starbucks® coffee and Starbucks brands to consumers around the world for the long-term.
With expanded availability and distribution, sales of Starbucks® coffee K-Cup® packs increased more than 75 per cent in March 2013 over the previous year. And just last month, Starbucks® coffee K-Cup® packs were named one of the top 10 launches of 2012, according to Information Resources, Inc. (IRI), a leading market research company focused on the consumer packaged goods (CPG) and retail industries.
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high quality arabica coffee. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online atwww.starbucks.com.
Starbucks Forward-Looking Statements
Certain statements contained herein are not based on historical fact and are “forward-looking statements” within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are based on information available to Starbucks as of the date hereof, and Starbucks actual results or performance could differ materially from those stated or implied, due to risks and uncertainties associated with its business. These risks and uncertainties include: evolving understanding of the definition of and consumer preference for super-premium coffee; continued growth in the single-serve sector and market acceptance of Starbucks coffee and brands in that sector; the ability of Starbucks to accelerate its growth in the single-serve sector; continued consumer success of the Keurig Single-Cup Brewing system, including successful distribution of the System and portion packs in existing and contemplated markets and channels domestically and internationally; the potential introduction of super-premium coffee by new market entrants including on the Keurig Single-Cup Brewing system; and the risk factors disclosed in the most recent Annual Report on Form 10-K, which Starbucks filed with the Securities and Exchange Commission on November 16, 2012. Forward-looking statements reflect management’s analysis as of the date of this release. Starbucks does not undertake to revise these statements to reflect subsequent developments, except as required under the federal securities laws.
About Green Mountain Coffee Roasters, Inc.
As a leader in specialty coffee and coffee makers, Green Mountain Coffee Roasters, Inc. (GMCR) (NASDAQ: GMCR), is recognised for its award-winning coffees, innovative Keurig ® single cup brewing technology, and socially responsible business practices. GMCR supports local and global communities by investing in sustainably-grown coffee, and donating a portion of its profits to social and environmental projects.
GMCR routinely posts information that may be of importance to investors in the Investor Relations section of its website, including news releases and its complete financial statements, as filed with the SEC (SCUR). The Company encourages investors to consult this section of its website regularly for important information and news. Additionally, by subscribing to the Company’s automatic email news release delivery, individuals can receive news directly from GMCR as it is released.
GMCR Forward-Looking Statements
Certain information contained in this release, including statements concerning expected performance such as those relating to net sales, earnings, cost savings, acquisitions and brand marketing support, are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Generally, these statements may be identified by the use of words such as “may,” “will,” “would,” “expect,” “should,” “anticipate,” “estimate,” “believe,” “forecast,” “intend,” “plan” and similar expressions intended to identify forward-looking statements. These statements may relate to: the expected impact of raw material costs and our pricing actions on our results of operations and gross margins, expected trends in net sales and earnings performance and other financial measures, the expected productivity and working capital improvements, the ability to maximise or successfully assert our intellectual property rights, the success of introducing and producing new product offerings, ability to attract and retain senior management, the impact of foreign exchange fluctuations, the adequacy of internally generated funds and existing sources of liquidity, such as the availability of bank financing, the expected results of operations of businesses acquired by us, our ability to issue debt or additional equity securities, our expectations regarding purchasing shares of our common stock under the existing authorizations, and the impact of the inquiry initiated by the SEC and any related litigation or additional governmental inquiry or enforcement proceedings.
These and other forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Results may be materially affected by external factors such as damage to our reputation or brand name, business interruptions due to natural disasters or similar unexpected events, actions of competitors, customer relationships and financial condition, the ability to achieve expected cost savings and margin improvements, the successful acquisition and integration of new businesses, fluctuations in the cost and availability of raw and packaging materials, changes in regulatory requirements, and global economic conditions generally which would include the availability of financing, interest, inflation rates and investment return on retirement plan assets, as well as foreign currency fluctuations, risks associated with our information technology systems, the threat of data breaches or cyber-attacks, and other risks described in the Company’s filings with the Securities and Exchange Commission.
Actual results could differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update or revise publicly, any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.