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.
Some other Green Mountain sips:
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