Starbucks Corporation (NASDAQ:SBUX) revised the terms of its five-year agreement with Keurig Green Mountain (NASDAQ:GMCR) ended the super-premium exclusivity in exchange for an improved business terms, according to a press statement release on Friday.
Keurig Green Mountain (NASDAQ:GMCR) is the new name of Green Mountain Coffee Roaster Inc. The board of directors of the company changed its name to bring together its strongest brands (Keurig and Green Mountain) in one single corporate identity during its annual shareholders meeting last week.
The amended agreement enables Starbucks Corporation (NASDAQ:SBUX) to expand its K-cup pack offerings and further promote consumer choice as Keurig Green Mountain (NASDAQ:GMCR) continue to build its Keurig brewing system.
John Culver, group president, China and Asia Pacific, Channel Development and Emerging Brands at Starbucks Corporation (NASDAQ:SBUX) said, “This amendment advances Starbucks commitment to strengthening its global leadership position in the nearly $8 billion premium single cup coffee category.”
On the other hand, Mark Wood, senior vice president, Global Hot Systems at Keurig Green Mountain (NASDAQ:GMCR) said, “This amended agreement creates more favorable business terms for both companies and allows us to build upon our strong relationship.”
Since the start beginning of the partnership between the companies, Starbucks Corporation (NASDAQ:SBUX) shipped almost 2 billion Starbucks K-cup packs by the end of 2013. “This contractual update underscores the appeal of Starbucks to the millions of Keurig brewer owners and the continued innovation and collaboration our relationship reflects,” added Culver.
Separately, Keurig Green Mountain (NASDAQ:GMCR) announced its multi-year manufacturing and distribution agreement with Peet’s Coffee & Tea, Inc (NASDAQ:PEET), a competitor of Starbucks Corporation (NASDAQ:SBUX).
The companies agreed to introduce a selection of Keurig licensed Peet’s coffee and tea varieties in K-Cup packs for the Keurig brewers by the end of the summer. According to Keurig Green Mountain, (NASDAQ:GMCR), Peet’s Coffee & Tea, Inc (NASDAQ:PEET) will continue to hand-roast the beans for its Peet’s K-Cup packs, and the roasted beans will delivered to its facility for and grinding and packaging in K-Cup packs.
Peet’s Coffee & Tea, Inc (NASDAQ:PEET) will distribute its newly licensed K-Cup packs using its nationwide proprietary delivery system to Peet’s retail and online stores, grocery stores, mass merchandisers, and club stores. Keurig Green Mountain (NASDAQ:GMCR) will distribute the Peet’s K-Cup packs to specialty and department stores away from home channels.
“We’re thrilled to bring Keurig consumers and Peet’s lovers the choice of Peet’s premium specialty coffees and teas as part of the continually growing Keurig family of brands; hand-roasted by Peet’s and expertly packaged in K-Cup packs by Keurig to deliver optimum freshness and taste with the ease of the Keurig brewing system,” said Brian Kelley, president and CEO of Keurig Green Mountain (GMCR).