Soup, There It Is!

Shares of Green Mountain Coffee Roasters (NASDAQ: GMCR  ) are down today on the news that it's partnering with Campbell's Soup (NYSE: CPB  ) to create single-serve soup packs you can make with your Keurig. According to Motley Fool Analyst Ron Gross, while the idea is a good one, it's probably not a game changer for either company. Green Mountain's still going to focus on its core coffee market, and Campbell's is going to continue selling regular old soup. But which company most needs this experiment to work?

Ron thinks that Green Mountain is in a stronger position than Campbell's, and shares of the company are up over 95% year to date. Meanwhile, due to some financial finagling, Campbell's earnings are down dramatically from last year, which is why Ron thinks Campbell's needs this experiment to work. Meanwhile, Ron thinks that Green Mountain shareholders shouldn't buy into the news, nor should they panic. He thinks that the best course of action is to stay calm and wait to see how the soup packets are received by consumers when they debut in 2014.

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  • Report this Comment On September 15, 2013, at 3:44 PM, XMFChaodan wrote:

    Hi Mark and Ron,

    I thought this piece of news was interesting! Although, my first reaction certainly wasn't panic. I can see why some may see it as a "weird" combo, but I see it as just another way for GMCR to expand their K-Cup offerings (which they currently derive ~90% of their revenues from). So wouldn't it make sense that the more they offer the more attractive they would be? Now, not only can mom and dad make a cup of fresh-brew, they don't have to worry about making junior soup from a messy can.

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