Green Mountain Guy Wasn’t Worried About Starbucks, So He’ll Probably Wave This Off, Too

Chief of Green Mountain Coffee Roasters (GMCR), Larry Blanford, seemed oddly relaxed about Starbucks’ (SBUX) plans to create a rival single-cup coffee machine, taking on Green Mountain’s Keurig unit, which brought in almost half of last year’s sales.

So we expect he’ll be equally calm about this news: Kraft Foods (KRFT) plans to sell its own, unlicensed single-serve coffee pods that are compatible with Keurig brewing machines. It will sell Maxwell House and Gevalia single-serve pods, and it won’t pay any royalties on them to Green Mountain.

This stems from the fact that Green Mountain saw two key patents expire in September, both relating to its K-cup pods. That allows other companies to introduce their own pods, competing on brand and price. Green Mountain failed to include this as a risk factor in regulatory filings, and Blanford recently told the Wall Street Journal that he wasn’t worried about Starbucks or those key patents. But investors might be.

Granted, the stock and PE ratio have already fallen significantly.

GMCR Chart

GMCR data by YCharts

But these are giant competitors. Kraft Foods Group was formerly Kraft before it spun off its global snacks business. It’s been halved but still has $19 million in annual sales.

GMCR Market Cap Chart

GMCR Market Cap data by YCharts

And Green Mountain still has a pile of sales at stake.

GMCR Revenue TTM Chart

GMCR Revenue TTM data by YCharts

From the editors of YCharts.YCharts Pro Investor Service includes professional stock charts, stock ratings and portfolio strategies.



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