Green Mountain (GMCR) Slammed as New Competition Prepares for Massive Launch
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Price: $91.67 --0%
Rating Summary:
5 Buy, 15 Hold, 3 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
5 Buy, 15 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Shares of Green Mountain Coffee Roasters (Nasdaq: GMCR) are under pressure Thursday as new potential competition in the single-serve coffee sector has come to light.
Analysts at Detwiler Fenton said they have heard Wal-mart (NYSE: WMT) is planning to launch a new single-serve hot / cold beverage system this Spring. The product in question will compete head-on with Green Mountain's Keurig brewer, among other players in the single-serve category.
Specifically, the new manufacture will be ESIO Beverage and per unit price points are expected to be much lower than Green Mountain's K-cup.
"With full backing from WMT for a national launch, our understanding is that ESIO is in the process (as we speak) of developing in-store merchandising and marketing for the product launch," Detwiler Fenton analyst said.
The firm expects this launch to be a "game changer" in the space. First, the launch will pressure pricing through retail for GMCR K-Cups. The pricing will also be a much better fit for Wal-Mart, which is looking to offer a better value option for its consumers in the single serve coffee market.
Even without ESIO though, Green Mountain's is already seeing lower pricing on K-Cups, the firm noted. They expect this trend to continue as private label and other competing brands enter the category, along with firms like ESIO.
Green Mountain is looking to offset this slowdown with its next generation V-Cup brewer. However, "checks so far suggest that the brewer and a very limited number of V-Cups will be available sometime this year," the firm noted.
Shares of Green Mountain are down 5.7 percent to $48.15 in mid-day action. The company is scheduled to report earnings results on February 1.
Analysts at Detwiler Fenton said they have heard Wal-mart (NYSE: WMT) is planning to launch a new single-serve hot / cold beverage system this Spring. The product in question will compete head-on with Green Mountain's Keurig brewer, among other players in the single-serve category.
Specifically, the new manufacture will be ESIO Beverage and per unit price points are expected to be much lower than Green Mountain's K-cup.
"With full backing from WMT for a national launch, our understanding is that ESIO is in the process (as we speak) of developing in-store merchandising and marketing for the product launch," Detwiler Fenton analyst said.
The firm expects this launch to be a "game changer" in the space. First, the launch will pressure pricing through retail for GMCR K-Cups. The pricing will also be a much better fit for Wal-Mart, which is looking to offer a better value option for its consumers in the single serve coffee market.
Even without ESIO though, Green Mountain's is already seeing lower pricing on K-Cups, the firm noted. They expect this trend to continue as private label and other competing brands enter the category, along with firms like ESIO.
Green Mountain is looking to offset this slowdown with its next generation V-Cup brewer. However, "checks so far suggest that the brewer and a very limited number of V-Cups will be available sometime this year," the firm noted.
Shares of Green Mountain are down 5.7 percent to $48.15 in mid-day action. The company is scheduled to report earnings results on February 1.
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