Green Mountain Brews Up a Name Change

The single-serve coffee brewer thinks it can come out smelling like a rose.

Jan 13, 2014 at 4:10PM

What's in a name? That which we call Green Mountain Coffee Roasters (NASDAQ:GMCR) by any other name would smell as rich and refreshing.

With apologies to Shakespeare, we note that the coffee maker wants to ask its shareholders for permission to change its name to Keurig Green Mountain, a decision that's so obvious it's a wonder it wasn't considered before now.

Although its coffee is pretty good, too, Green Mountain is arguably best known for its Keurig coffeemakers, and with the single-serve machines the overriding driver of its business, linking the two in the company name makes a ton of sense. Not so much if it wanted to call itself K-Cup Coffee Roaster, even though it derived 73% of its annual sales last year from the single-portion packs. The brew machines themselves comprised less than 19% of sales, but because they're synonymous with the coffee company, the move is a bit of genius, at least from a marketing standpoint.

Companies occasionally go through a similar ritual, but all too often something happens between the room where they threw all those cool-sounding ideas at the whiteboard and the labeling that comes out on the packaging. The old Kraft Foods went through the process and spewed out the awful-sounding Mondelez International, a mashup of the Latin word for "world" and "a fanciful expression of 'delicious.'"


Indeed, Kraft's old parent itself went through a similar corporate rebranding process, changing its name to Altria from Philip Morris no doubt due to the close association with cigarettes, and probably liking the resemblance to the word "altruism." Others have offered bizarre name changes for no apparent reason that would have sent Don Draper running from the room screaming -- such as bebe rebranding its bebe sport stores to the unintelligible PH8 before eventually closing the chain altogether.

There are some companies, though, that could follow Green Mountain's lead here. Daimler, anyone? The company makes Mercedes; why not just go with that and not confuse everyone? After all, AMR finally saw the light -- though it took a merger with US Airways to do it -- and renamed itself American Airlines Group, while Research In Motion realized at last it was all about the BlackBerry -- until it no longer was.

In the end, it remains the business that's most important, not what you call it. The clumsily named Mondelez saw a 5% increase in organic sales last quarter while a streamlined bebe was down almost 3%, so who's laughing now?

Green Mountain, for its part, had 22% revenue growth in the fourth quarter and 16% for the full fiscal year. It's not likely someone will go out and buy a single-serve brewer simply because the company will be called Keurig Green Mountain, but every chance a company has to make it easier for a consumer to link to what it sells makes it that much easier to complete the sale.

And now every time someone mentions the company, they'll be reinforcing the brewer's name, which should make it come out smelling like a rose in the end.

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Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Green Mountain Coffee Roasters. Try any of our Foolish newsletter services free for 30 days. 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.

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