Keurig Green Mountain Offers Wellsley Farms Coffee in K-Cups - Analyst Blog

Keurig Green Mountain Inc. GMCR has entered into an agreement with BJ's Wholesale Club to widen the homemade single-serve coffee options for Keurig users. Under the agreement, Keurig Green Mountain will offer BJ's Wholesale Club's Wellsley Farms coffee in K-Cup packs for Keurig brewers.

The Wellsley Farms Signature Blend K-Cup packs will be available at the online shopping site — BJ.com — and at BJ's Wholesale Club locations. They are priced at $29.99 for an 84-ct box. The new K-cup packs are claimed to contain bold, medium roast coffee with subtle flavors of dried fruit and cocoa.

Keurig Green Mountain produces coffees, teas and other hot beverages which are sold in K-Cup and Vue portion packs. These portion packs can be used on its single-serve Keurig brewers for making hot beverages.

The deal will boost Wellsley Farms coffee sales as the convenience of Keurig brewers will enhance its popularity among Keurig fans. Moreover, the pact furthers Keurig Green Mountain's goal of sustaining its dominance in the single-serve brewing market after the K-cup patents expired in Sep 2012.

Keurig Green Mountain aims to popularize the single-cup brewing system in America and has roped in big brands like Dunkin' Brands Group Inc. DNKN and Starbucks Corp. SBUX into its portion pack systems through strategic distribution agreements.

Moreover, Keurig Green Mountain is stepping into the world of cold beverage and soda to maintain its position in the single-serve brewing category. It will launch the Keurig Cold Machine in 2015 which will make sodas, sports drinks and other beverages with the touch of a button. Like its coffee machines, the cold brewer would use pods to make a variety of drinks.  

In order to increase its brand power, the Zacks Rank #3 (Hold) company signed a 10-year partnership deal with beverage giant The Coca Cola Company KO to make exclusive Coca-Cola branded pods for use on its Keurig Cold brewer for making cold beverages. Coca-Cola will also work with Green Mountain on the development and launch of this latest brewer.

Through these agreements, Keurig Green Mountain is aligning with the major beverage brands to support a range of consumer choices and taste profiles in Keurig Single-Cup Brewing system.

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