Boston, MA 05/09/2014 (wallstreetpr) –Keurig Green Mountain Inc. (NASDAQ:GMCR), has announced it has expanded its partnership agreement with J.M.Smucker Co for the manufacturing, marketing, distribution and sale of Smucker brands of coffee. The two companies having entered into a partnership in 2010, have decided to expand their partnership after huge success in the past three years of business.
Partnership to Spur Further Growth
The new partnership will enable the expansion of Keurig Green Mountain Inc. (NASDAQ:GMCR)’s product offering into new systems including the yet to be launched Keurig bolt and Keurig 2.0 brewers. The partnership has been beneficial especially to Smucker which has been able to reach consumers across their various segments of the country.
The agreement is now expected to enhance leadership into the lucrative home coffee category by expanding the K-cup pack offerings, as well as facilitating expansion into the multiple distribution channels. This is part of Keurig Green move to line up more licenses deals before the launch of the new brewing systems Keurig 2.0 and Keurig Bolt.
Keurig Beats Analysts Estimates
The signing of the partnership comes as Keurig Green Mountain Inc. (NASDAQ:GMCR) announced second earnings that beat estimates. The coffee machine seller saw its earnings come in at $1.08 per share against estimates of 95cents and easily surpassing a guidance of between 93 and 98 cents. Increased competition in the coffee industry continues to be the biggest challenge. Premium home coffee machines continue to build the company’s name despite the increased competition.
More companies continue to enter the market making it extremely difficult for Keurig Green to maintain a competitive advantage it ones commanded. Keurig Green profit for the quarter was mainly driven by business in the sale of K-Cups and Vue Pods. Coca Cola’s 10% investment stake in the company is expected to spur growth in the coming years even further.
Keurig Green Mountain Inc. (NASDAQ:GMCR)’s second quarter sales were up by 10% to $1.1 billion up from $1.0 billion reported last year. The improvement in sales was mainly backed by an 8% growth in sales for K-cups and Vue packs. Gross profit, on the other hand, surged to $457.4 million with a gross margin of 41.5%.