Case 36: Green Mountain Coffee Roasters and Keurig Coffee * On March 10, 2011, Starbucks and Green Mountain Coffee Roasters (GMCR) announced the formation of a strategic relationship for the...

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Case 36:Green Mountain Coffee Roasters and Keurig Coffee* On March 10, 2011, Starbucks and Green Mountain Coffee Roasters (GMCR) announced the formation of a strategic relationship for the manufacturing, marketing, distribution, and sale of Starbucks and Tazotea branded K-Cup portion packs for use in GMCR’s Keurig single-cup brewing system. The new relationship was designed to provide owners of Keurig single-cup brewers with the additional choice of Starbucks-branded super-premium coffees for their brewers. This strategic relationship furthered Starbucks’s stated goals of expanding its presence in premium single-cup coffee, making its premium coffees conveniently available to consumers whenever, wherever, and however they wanted it. Howard Schultz, president, CEO, and chairman of Starbucks Corporation stated,
Today’s announcement is a win for Starbucks, a win for GMCR and most importantly a win for consumers who want to enjoy Starbucks coffee with the Keurig Single-Cup Brewing system. Our research shows that more than 80 percent of current Starbucks customers in the U.S. do not yet own a single-cup brewer and our relationship will enable Starbucks customers to enjoy perfectly brewed Starbucks coffee at home, one cup at a time.
Jeff Hansberry, president, Starbucks Global Consumer Products Group, added, “We are proud to be the exclusive super-premium licensed coffee brand produced by GMCR for the Keurig Single-Cup Brewing system, and we are looking forward to working with our colleagues at GMCR to further accelerate growth in single-serve coffee.” Lawrence J. Blanford, GMCR president and CEO stated, “This relationship is yet another example of GMCR’s strategy of aligning with the strongest coffee brands to support a range of consumer choice and taste profiles in our innovative Keurig Single-Cup Brewing system.”1
GMCR appeared on a roll with the Starbucks development following similar news in February with Dunkin’ Donuts announcing a promotion, manufacturing, and distribution agreement making Dunkin’ Donuts coffee available in single-serve K-Cup portion packs for use with Keurig Brewers.2Beginning in the summer of 2011, Dunkin’ Donuts will offer 14-count boxes of Dunkin’ Donuts coffee in single-serve K-Cup portion packs exclusively at participating Dunkin’ Donuts restaurants in the United States and Canada. GMCR will exclusively package the new Dunkin’ K-Cup portion packs using coffee sourced and roasted to Dunkin’ Donuts exacting specifications. Nigel Travis, Dunkin’ Brands CEO and Dunkin’ Donuts president stated,
We believe customers will be delighted to learn that ‘America’s Favorite Coffee’ will soon be able to be prepared in America’s fastest-growing single-cup brewing system. By introducing Dunkin’ K-Cup portion packs and making them available exclusively in our restaurants, we are giving people more occasions to enjoy Dunkin’ Donuts coffee and more ways to enjoy using the Keurig Single-Cup Brewing System. We believe this alliance of two brand leaders means incremental sales of GMCR, for Dunkin’ Donuts and for our Dunkin’ Donuts franchisees.
GMCR president and CEO Larry Blanford stated,
Dunkin’ Donuts has top quality coffee, an extremely loyal customer base and impactful advertising programs. Combine those assets with consumers’ enthusiastic response to Keurig’s Single-Cup Brewing technology and we believe this alliance represents a truly exciting opportunity for both companies, with the potential to strengthen Keurig brewer adoption by consumers in one of the fastest-growing categories of the coffee industry.
According to The NPD Group/CREST, Dunkin’ Donuts served the most hot traditional and iced coffee in America (for quick-serve restaurants, year ending October 2010), selling more than one billion cups of hot and iced coffee every year. Dunkin’ Donuts was recently ranked number one in customer loyalty in the coffee category for the fifth consecutive year by the 2010 Brand Keys Customer Loyalty Engagement Index. Additionally, in 2010 Dunkin’ Donuts opened more net new locations globally than any other quick-serve brand.
While Wall Street rewarded the stock price of GMCR on the news of the strategic relationships, Larry Blanford could not ignore the risks related to GMCR’s Keurig business. Although GMCR was based in Waterbury, Vermont, with a geographic footprint weighted almost exclusively to the U.S. and Canada, several global developments posed risks to Keurig’s future growth. Blanford was concerned about several issues. including product liability, protecting GMCR’s intellectual property, GMCR’s ability to integrate their acquisitions, and the effect of commodity costs on Keurig brewers.
The U.S. population consumed more coffee than soft drinks in 1969. According to Jack Maxwell ofBeverage Digest,U.S. consumption of coffee in 1969 was approximately 40 gallons per capita versus 20 gallons of soft drinks. By 1998, coffee consumption had fallen to 20 gallons per capita annually compared to more than 50 gallons of soft drinks consumed. But consumer preferences can and did change, responding to the availability of higher-quality coffee by drinking more coffee and reversing a three-decade decline. The National Coffee Association conducted a survey revealing that 80 percent of Americans drink coffee occasionally and over 50 percent drink coffee daily. The U.S. per capita consumption of coffee was estimated to be 424 servings, which included in-home and out-of-home consumption of roast, ground, instant, and ready-to-drink (bottled/canned) coffee.3While the average consumption per drinker rose to over three cups per day, 18- to 24-year-olds who drink coffee averaged 4.6 cups per day, whereas those over 60 years old averaged only 2.8 cups per day.4
Answered Same DayDec 20, 2021


David answered on Dec 20 2021
3 Votes
Case study
The name of the firm is Green Mountain coffee roasters and it operates as a player of the
everage industry focusing on manufacturing of coffee roasters, Keurig coffee makers and other
products that can help make coffee shop coffee at home which have been
anded as K-cup
products. Information can be accessed at http:
Green Mountain is a firm headed by its CEO, Lawrence J. Blanford that operates in the
field of manufacturing coffee roasters. It operates in a $17 billion industry and caters to several
specialist coffee houses like Sta
ucks and Dunkin Doughnuts. Since the sales of Green
Mountain are expected to increase, the Sta
ucks and Green Mountain strategic relationship
seems to be quite positive. Moreover the firm also can
ing about a better level of growth and
improvement with this strategic partnership.
Green Mountain started its functioning with supplying to specialty coffee houses only. It
focused on providing different products to specialty coffee houses and supplied to their complete
chains since standardization was their norm. It provided not only hot tea and coffee but also cold
coffee and ice tea. These products became an instant hit with the customers (Hunger, J. D., &
Wheelen, T. L., 2007).
Moreover Green Mountain, being a coffee roaster maker can expand its market by
enabling customers to relish Keurig coffee in K cup size packages. This can help the firm have
Case study
higher sales and an additional scope for developing new products and product lines. In this way
it becomes possible for the firm to expand in international markets since all of its strategic
partners are international chains.
- Network
- Established
- Dependence
- Lack of
- New customer sets
- Global markets
- Competition

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