Green Mountain grows amidst changes and challenges

by Staff
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WATERBURY, VT. — Despite a leadership change and slow holiday season, Green Mountain Coffee Roasters reported gains in its first quarter of fiscal 2013.

Sales for the quarter ended Dec. 29 rose 16%, driven by a 21% growth in K-Cup single-serving packs and a 14% growth of Keurig brewers and accessory sales.

“I believe we are in the very early days of a powerful evolution in how consumers purchase, prepare and customize beverages in their home, and the Keurig brewing system is well-positioned to lead this evolution,” said said Brian Kelley, president and chief executive officer, during a Feb. 6 call with financial analysts to discuss first-quarter earnings.

Since his first 60 days with the company, Mr. Kelley said he’s “more excited than ever” about his role and the company’s future.

“I spent the last two months diving deeply into every aspect of the business and getting to know the details of our strategies, our customers, our partners and our operations,” he said.

Going forward, the company said it plans to improve operational efficiency, in-store presence, efforts in marketing and brand-building, and innovation around the Keurig Vue brewing system, which netted $19 million in sales during the quarter.

“We’ll continue to drive the success of our Vue technology with new brewers, better features, new beverage products and a strong marketing effort,” Mr. Kelley said. “The Keurig Vue platform represents the best of our technology, and it will continue to be a key focus as part of a strong portfolio of brewers incorporating the best technologies at the best price points.”

While last year’s patent expiration of the K-Cup pack posed challenges, Mr. Kelley said the impact “appears largely exaggerated and not nearly as dire as some feared. In fact, it turns out that it wasn’t really the patent that was protecting the strength of the Keurig system. The patent just gave us a head start, which is exactly what patents are intended to do.

“The real protection has been in offering a better product with superior quality. It’s in the mass and scale, which gives G.M.C.R. a better cost structure. It’s in the ability to partner successfully with strong brand partners. It’s in a broad distribution system that took years to build. It’s in having a multi-million household installed base. And it is in the ability to mine customer insight and to target continued innovation with the unending goal of delivering new solutions to consumers, customers, and partners over time.”
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