Starbucks, Green Mountain expand partnership

[March 22, 2012]  SEATTLE (AP) -- Starbucks Coffee Co. said Wednesday it will make Starbucks-branded coffee packs for Green Mountain Coffee Roasters Inc.'s new line of Keurig Vue single-cup coffee brewing machines.

Starbucks already makes single-serve packs for Green Mountain's other Keurig brewers. But investors had questioned if the relationship would continue when Starbucks announced this month that it will make its own single-cup brewers, dubbed Verismo. The new deal offers a big-name partnership that could boost Vue's sales.

The announcement came ahead of Seattle-based Starbucks' annual meeting, where the company was expected to discuss Verismo as well as its other businesses.

Green Mountain announced its new higher-priced Keurig Vue machine last month, saying it was created to brew stronger, larger and hotter beverages.

Green Mountain stock rose $5.52, or 10.9 percent, to $56.22 by early afternoon. That compares to a 16 percent drop March 9, the day after Starbucks announced its Verismo system. Before trading commenced Wednesday, Green Mountain shares were up 13 percent from the beginning of 2012.

"We believe the customization offered by Vue and its appeal as a premium beverage solution will resonate with loyal Starbucks consumers, and we're pleased to have Starbucks coffee as a brand option in the system as we move forward," Green Mountain President and CEO Lawrence Blanford said in a statement.

Green Mountain, which is based in Waterbury, Vt., is expected to distribute Starbucks Vue packs initially to U.S. specialty, department store and mass retailers and add them to its retail and wholesale websites by fall.

"Premium single-cup is the fastest-growing segment of global coffee (sales), and the expansion of our relationship with Green Mountain allows us to grow further, faster, in the single-cup category," said Jeff Hansberry, Starbucks' president of channel development.

Shares of Seattle-based Starbucks Corp. rose 12 cents to $53.85.

[Associated Press]

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