Less than two weeks after scorching Green Mountain Coffee Roasters with news that it will market a competing single-serve coffee machine, Starbucks said Wednesday it also will make coffee packets to fit in Green Mountain’s new Vue-brewed coffee machine.
Starbucks still plans to sell a machine with Germany-based Krueger that will make single-serve espresso and brewed coffee drinks.
When the Seattle chain announced that news earlier this month, Green Mountain’s stock fell as much as 25 percent in one day and has struggled ever since.
Two years ago, Starbucks ditched its relationship with Kraft, which also markets an at-home brewing machine, and last year partnered with Green Mountain on single-serve coffee.
Green Mountain’s machines focus on brewed coffee, which requires lower pressure, although the Vermont company sells coffee packets with espresso-roasted coffee for its machines. The cups used in Starbucks’ new Verismo machines will not fit in Green Mountain machines.
Starbucks’ relationship with Green Mountain was shaky from the start.
Last year, Starbucks CEO Howard Schultz said in a memo to executives that just having a patent did not ensure Green Mountain’s continued primacy in the single-serve category.
The memo came amid rumors that Starbucks hoped to buy Green Mountain.
One analyst suggested at the time that Starbucks may have been playing games by releasing the memo.
“We are amused at the public battles Starbucks finds the need to wage when it cannot get its way in private negotiations,” wrote Janney Capital Markets analyst Mitchell Pinheiro, who covered Green Mountain but not Starbucks.
Meanwhile, Starbucks is building a new plant in Georgia that will make its Via instant coffee and ingredients for Frappucinos sold both in Starbucks outlets and in grocery stores.
The plant, in Augusta, Ga., will employ 140 and open in early 2014. Construction, which will also generate construction and transportation jobs, is slated to start this spring.
The work that will be performed at the Georgia plant has been through third-party plants in Latin America. Building a new plant in the U.S. gives Starbucks more control over the process, said Peter Gibbons, executive vice president of global supply chain operations.
“We want to get a lot more into packaged products and expand ready-to-drink coffee and other drinks,” Gibbons said. “This is a chance to control and streamline the supply chain.”
The Associated Press contributed to this report
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