Coffee prices hit a 34-year high recently. Poor harvests of premium arabica beans and growing demand in emerging markets have resulted in supply shortages. Faced with these adverse conditions, coffee companies have had to rework their strategies, even as consumers the world over demand more coffee.

One that has done well in spite of the crunch is K-Cups king Green Mountain Coffee Roasters (Nasdaq: GMCR). Green Mountain posted strong profit growth in its second quarter this year and gave a positive forecast for the rest of the year. As a result, shares skyrocketed by 20%.

Let's delve into the numbers to get the inside scoop.

Figuring it out
Green Mountain's second quarter saw revenues double from the year-ago quarter, to $647.7 million. Net margin increased to 10% from 7.6%. So both Green Mountain's top and bottom line have shown growth. This is all good stuff.

The rise in the price of ingredients has forced coffee makers such as Green Mountain, Starbucks (Nasdaq: SBUX), and Peet's (Nasdaq: PEET) to raise their prices. At the same time, faced with high coffee prices, roasters have expanded their businesses to cater to the growing demand for specialty coffee and the single-serve coffee market.

Green Mountain currently dominates the single-serve coffee market in the States, because of its Keurig machine, with a market share of close to 80%. The market is still in its infancy, and the company expects significant further growth. One RBC Capital Market analyst estimates that the single-serve market is currently $4 billion worldwide. The U.S. market looks all set to expand on its current $100 million base, with only 6% of U.S. households currently using the K-Cups brewer. With this market predicted to grow mightily, Green Mountain is already well-placed to capitalize on it.

The plan
The company has entered into license deals with brands such as ConAgra's (NYSE: CAG) Swiss Miss, Dunkin' Donuts, and the world's largest coffee chain, Starbucks, that would provide coffee pods for the Keurig brewer.

Tying up with these top coffee makers gives Green Mountain access to a much wider market and, more importantly, a much desired foray into the international market. The international single-serve market is almost seven times as big as the market in the U.S. Green Mountain's tie-up with Starbucks gives it access to nearly 6,000 more Starbucks outlets worldwide. Main rivals to the Keurig brewer are Sara Lee's (NYSE: SLE) Senseo Brewer and Nestle's Nespresso.

Acquisitions and expansion
In the past couple of years, Green Mountain has upped efforts to expand its horizons, especially into Canada, and has been busy on the mergers-and-acquisitions front. Last year, it acquired Montreal-based Van Houtte -- which sells packaged coffee, including K-Cups -- for nearly $908 million. Canadian company Timothy's Coffees was acquired a couple of years back. Canadian coffee and doughnut juggernaut Tim Hortons (NYSE: THI) should probably be paying close attention to these trends.

The Foolish bottom line
With Green Mountain Coffee Roasters set to take the single-serve coffee market by storm, it is also looking to expand its horizons geographically. Indeed, the company appears to be a bright prospect for the future. It has already posted strong results at the start of the year and will look to continue the run. I'm bullish on its prospects, as its initiatives are sure to boost both its top and bottom lines.