Starbucks Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Starbucks (Nasdaq: SBUX  ) popped 11% in intraday trading today after announcing a deal to bring its coffees and teas to Keurig's popular single-cup coffee brewers.

So what: Green Mountain Coffee Roasters (Nasdaq: GMCR  ) will manufacture, market, and distribute Starbucks' coffee and tea for Green Mountain's Keurig single-cup systems in the U.S. and Canada. Sales of Keurig's machines have been robust, while sales of Starbucks' single-serve VIA Ready coffee have been only lightly roasted.

Now what: Starbucks' revenue fell in 2009 because of consumer spending cutbacks and increasing competition from lower-priced offerings. As many consumers switched to brewing their own to save money, Keurig machines were a big winner. The established and growing network of Keurig owners were not likely to invest in a different brewing machine and would remain difficult for Starbucks to access without a deal like the one announced today.

Interested in more info on Starbucks? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1456279, ~/Articles/ArticleHandler.aspx, 11/29/2014 4:52:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement