Green Mountain (GMCR) Pressured as Starbucks (SBUX) Begins Selling Keurig Competitor
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Green Mountain (Nasdaq: GMCR) looks like it could use a little of its own product Thursday morning, with shares slumping ahead of the bell.
One reason could be a Reuters article, which highlights how K-Cup partner in crime, Starbucks (Nasdaq: SBUX), is going to pressure Green Mountain in the single-serve coffee department. (We're guess Starbucks isn't going to have incredible Hot Chocolate at the start, a game breaker for some.)
According to Reuters, Starbucks Verismo will at a price of $199, with features like temperature controls and self-cleaning moving the price up to $399. Sales of the Verismo will begin in October, Starbucks said.
In addition to Green Mountaain, the Verismo will compete with Nestle's Nespresso espresso makers, which have a large following in Europe.
Nespresso machines range in price from $130 to $700, while Green Mountain's machines also vary in price, but its latest Keurig Vue model runs about $250.
Starbucks CEO Howard Schultz has said his company will remained committed to Green Mountain and the partnership both share. Verismo will be complimentary to Keurig, like Netflix (Nasdaq: NFLX) is complimentary to services from Time Warner (NYSE: TWC), Comcast (Nasdaq: CMCSA), and other cable providers.
Unlike current K-Cup models, the Verismo will be able to brew both the single-serve coffee and espresso, something Green Mountain machines aren't able to do quite yet.
Starbucks' Schultz did note that about 75 percent of Starbucks customers don't have a single-serve brewer "primarily because the two machines (from Nestle and Green Mountain) don't deliver on the expectations that our customers want." Ouch.
Shares of Green Mountain are down 2.7 percent in early trading.
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One reason could be a Reuters article, which highlights how K-Cup partner in crime, Starbucks (Nasdaq: SBUX), is going to pressure Green Mountain in the single-serve coffee department. (We're guess Starbucks isn't going to have incredible Hot Chocolate at the start, a game breaker for some.)
According to Reuters, Starbucks Verismo will at a price of $199, with features like temperature controls and self-cleaning moving the price up to $399. Sales of the Verismo will begin in October, Starbucks said.
In addition to Green Mountaain, the Verismo will compete with Nestle's Nespresso espresso makers, which have a large following in Europe.
Nespresso machines range in price from $130 to $700, while Green Mountain's machines also vary in price, but its latest Keurig Vue model runs about $250.
Starbucks CEO Howard Schultz has said his company will remained committed to Green Mountain and the partnership both share. Verismo will be complimentary to Keurig, like Netflix (Nasdaq: NFLX) is complimentary to services from Time Warner (NYSE: TWC), Comcast (Nasdaq: CMCSA), and other cable providers.
Unlike current K-Cup models, the Verismo will be able to brew both the single-serve coffee and espresso, something Green Mountain machines aren't able to do quite yet.
Starbucks' Schultz did note that about 75 percent of Starbucks customers don't have a single-serve brewer "primarily because the two machines (from Nestle and Green Mountain) don't deliver on the expectations that our customers want." Ouch.
Shares of Green Mountain are down 2.7 percent in early trading.
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