Green Mountain (GMCR) Analyst Discusses Competition From Bevyz and SodaStream (SODA)

Green Mountain Coffee Roasters (NASDAQ: GMCR) faces new competition from Bevyz, a privately held company that is expected to launch its first At-Home beverage system that serves hot, cold, sparkling and still beverages all in one small machine. The launch is expected on March 15th. Analyst Akshay S. Jagdale of KeyBanc discussed the product and its implications for Green Mountain in a recent note.

"Bevyz is the only system/company we know of that is attempting to commercialize an At-Home beverage system that produces hot, cold, sparkling and still beverages in one machine (please see Figures 1-7 in the appendix for pictures of the aforementioned Bevyz system). We tried a broad range of products in a private viewing and came away impressed by the technology and were surprised by the small footprint (11.5” x 12” x 14”) of the machine. From a technology perspective, we see Bevyz as a strong #2 player in home carbonation behind GMCR; however, we believe it will take multiple years for the company to build a sizable installed base, and further technology advances are required for the system to become mainstream," said Jagdale.

"Following our meetings with Bevyz, we continue to have a positive view of the home carbonation category. We believe the GMCR/KO deal validates our positive thesis of the category and establishes GMCR as the leader. Although we appreciate SODA's (Nasdaq: SODA) strong marketing and distribution capabilities and first mover advantage, for the stock to work and its system to be become more mainstream, we believe it is critical for leading beverage brands to partner with the Company, which we now think is less likely given that we rank SODA behind GMCR and Bevyz from a technology perspective. The GMCR/KO (NYSE: KO) deal and the strong alliances Bevyz has built with some of the leading players in the global beverage industry (both equity stakes and product tests) seem to point to GMCR and Bevyz as the emerging leaders in the home-carbonation industry, in our opinion," he added.

KeyBanc has a Buy rating on Green Mountain Coffee Roasters with a price target of $150.00

For an analyst ratings summary and ratings history on Green Mountain Coffee Roasters (NASDAQ: GMCR) click here. For more ratings news on Green Mountain Coffee Roasters click here.

Shares of Green Mountain Coffee Roasters closed at $108.60 yesterday.

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