Green Mountain Coffee Roasters (Nasdaq: GMCR ) is getting into the vending-machine business, but don't start picturing those old-school contraptions that spit out putrid coffee in flimsy cups.
Green Mountain's machines will only dispense K-Cups of premium coffee, tea, and cocoa. Buyers can then create their own fresh, hot beverages with an adjacent Keurig single-cup brewer.
This approach offers a perfect solution for commercial settings like a company break room or a hospital's waiting room, where the proprietor wants to offer access to coffee without giving it away.
These machines probably won't contribute materially to Green Mountain's financial performance -- not initially, anyway. The company moved 432 million K-Cup units in its latest quarter, so it's hard to see these single-unit dispensers moving the needle much. Instead, their benefit lies in the free advertising they offer.
Companies can stock up to a dozen different varieties of K-Cups in the machines, and they don't have to be just the namesake brands. Third-party brands including Caribou Coffee (Nasdaq: CBOU ) and Hain Celestrial's (Nasdaq: HAIN ) Celestial Seasonings are also available. What's more, proprietors installing the machines will probably stock at least one tea and cocoa option -- enough to make java-sippers aware that Keurig is about more than just fresh coffee.
The machines could also encourage users to purchase their own K-Cup systems for home use, once they see how easy it is to operate Keurig brewers. After all, now that even Wal-Mart (NYSE: WMT ) is stocking K-Cups and entry-level brewers, Green Mountain's single-cup mastery couldn't be any more accessible to the masses.
In short, this is just one more reason for the baristas at Starbucks (Nasdaq: SBUX ) and Peet's (Nasdaq: PEET ) to wonder where the premium-coffee drinkers have gone. Sure, those companies offer fancy beverages -- and a cozy environment -- that Green Mountain can't duplicate. But no one ever said there's room for just one premium-coffee solution, And as retail chains lose traffic and Green Mountain gains momentum, these machines are the latest recruits into an army that help make the rich even richer.
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