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Green Mountain strikes coffee deal with Costco

Thursday, 1 Nov 2012 | 4:08 PM ET

WATERBURY, Vt. -- Green Mountain Coffee Roasters has struck a deal with Costco to manufacture store-brand packs of coffee for the retailer.

Green Mountain developed two blends for Costco's Kirkland Signature lines, a lighter breakfast blend and a darker roast.

Costco will begin selling the single-serve coffee pods, for use in Green Mountain's Keurig single-cup brewing system, in mid-December.

Green Mountain pioneered the single-serve coffee in the U.S. It has partnered with a number of companies, such as Tully's Coffee, Newman's Own and Caribou Coffee.

The company has struggled, however, as its patents expire and competitors release their own single-serve coffee makers. That includes Starbucks.

Shares of Green Mountain Coffee Roasters Inc. had fallen 65 percent since its high this year of $69.75 in February.

Shares of Green Mountain jumped $2.10, nearly 9 percent, to $26.28, after it announced the agreement with Costco Wholesale Corp., which is the largest wholesale club in the nation.

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