OAK BROOK, ILL. — Sam K. Reed, chairman, president and chief executive officer of TreeHouse Foods, Inc., offered a strong defense of his company’s lawsuit against Green Mountain Coffee Roasters, Inc., for potentially locking TreeHouse out of the single-serve coffee market with the launch of the Keurig 2.0.
“We have filed a lawsuit to ensure that the single-serve coffee and hot beverage market is not restricted by anti-competitive conduct,” Mr. Reed said. “In doing so, we seek a marketplace that provides all participants with a level playing field, a broad array of consumer choice, extensive price competition, and incentives to bring true innovation to consumers.
Mr. Reed made his comments Feb. 13 while discussing the company’s most recent financial results.
With the broader food and beverage marketplace in the U.S. growing at a sluggish pace, TreeHouse sees significant opportunity in the single-serve beverage space, and the move by G.M.C.R. clearly threatens the company’s position.
“Opportunity abounds as the private label portion of the single-serve coffee and hot beverage category should surpass an annualized run rate of $0.25 billion in grocery revenues before the end of the year,” Mr. Reed said. “The beverage sector, dependent as it is on consumers’ non-ending thirst for convenience, innovation, and value, should prove to be fertile ground, or should I say grounds, for private label growth.”
The Keurig 2.0 coffee maker will include technology that will only allow certain pods to function properly. Companies that wish to deliver products for the system will be required to pay G.M.C.R. a fee to license the technology.
“In our view, it is free competition, rather than the exclusionary abuse of monopoly power, that is the engine that drives both economic growth and consumer satisfaction across the universe of food and beverage products,” Mr. Reed said. “Accordingly, we intend to defend not only our business and customer brands and custom products, but also the rights of all of those who enjoy these products, be they consumers, customers, retailers, distributors, or suppliers.”
Mr. Reed emphasized the lawsuit is not about one piece of technology, but a “long-standing pattern of anti-competitive behavior.”
“Our belief here is that simply what we are trying to do is we want to be on the playing field, not locked out of the stadium, and have the opportunity to compete,” he said. “There is some confusion here about how the role of innovation versus a technological lockout, and I think the key matter is that true innovation really is based upon consumer benefit. And that’s what brands focus on and what we try to follow.”
Speaking of brands in general, Mr. Reed said they are always “bigger, better and faster” than TreeHouse.“They have great brands, but it’s the — we are prepared — we just expect that others will conduct themselves by the same rules that all of us should abide by,” he said. “This is another example — it will be seen as another example of the TreeHouse way and we will prevail in this instance in both the marketplace and in the courts.”