Green Mountain Green With Joy On Starbucks Deal (SBUX, GMCR)

Green Mountain GMCR is skyrocketing this morning, gaining 21% after the company and Starbucks SBUX announced the two companies would be teaming up in the single cup coffee brewing system market to bring Starbucks coffee and Tazo tea pods to the Keurig coffee machine.

Terms were not disclosed. The deal will bring K-Cup single-cup pods to every level of distribution, including food, drug, mass, club, specialty and department store retailers in the U.S. and Canada starting in the fall.

They will also bring K-Cup pods and Keurig machines to Starbucks stores, as well as making the Starbucks pods available through both companies' websites.

“Today's announcement is a win for Starbucks, a win for GMCR and most importantly a win for consumers who want to enjoy Starbucks coffee with the Keurig Single-Cup Brewing system,” said Howard Schultz, president, ceo and chairman, Starbucks Corporation. “Our research shows that more than 80 percent of current Starbucks customers in the U.S. do not yet own a single-cup brewer and our relationship will enable Starbucks customers to enjoy perfectly brewed Starbucks® coffee at home, one quality cup at a time.”

“We are proud to be the exclusive super-premium licensed coffee brand produced by GMCR for the Keurig Single-Cup Brewing system, and are looking forward to working with our colleagues at GMCR to further accelerate growth in single-serve coffee,” added Jeff Hansberry, president, Starbucks Global Consumer Products Group.

“This relationship is yet another example of GMCR's strategy of aligning with the strongest coffee brands to support a range of consumer choice and taste profiles in our innovative Keurig Single-Cup Brewing system,” said Lawrence J. Blanford, GMCR president and CEO. “Starbucks loyal consumers will soon be able to choose, brew and enjoy their favorite Starbucks coffee in their own homes through the quality, convenience and consistent preparation of the Keurig Single-Cup Brewing system.”

At last check, shares of Green Mountain were skyrocketing 23% in pre-market to $53.50, while shares of Starbucks were higher by 4.6% to $36.16.