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The New Green Mountain Worry

Friday, 30 Mar 2012 | 1:01 PM ET

I’ve argued in the past that Green Mountain Coffee Roasters is getting to be an all-in product. In other words, while new brewers will continue to sell, the rate of growth will slow – leading to a slowdown in the sale of K-cups.

AP

That’s why biggest Green Mountain news nobody noticed in recent days was a Goldman Sachs report not about Green Mountain, but about Starbucks.

It said that based on Nielsen data Starbucks K-cup sales have stabilized. K-cup industry growth in general may have reached a plateau.

The significance is that Starbucks K-cups have been on the market a limited time. This would amount to a fast ramp-up and likely cannibalization of Green Mountain’s existing brands. And that’s before the later-this-year expiration of K-cup patents, which will likely lead to a flood of K-cups on which Green Mountain earns zero.

P.S: There has been a lot of chatter in recent days about two 500,000 share sales by Chairman Robert Stiller. While he doesn’t have a formal regular sales program in place, he has sold several large charge chunks over the past year and still holds 13 million shares.

His sales make good headlines, but as I’ve written previously, I still believe the sale of shares by partner Lavazza, the Italian coffee company, are more significant.

Lavazza blamed the sales, which take its stake under the legal reporting limit, on “global economic issues.” No matter the reason, the news occurred just before Starbucks announced its new single-serve espresso machine, which it partnered on with a German company — and which is expected to ship later this year. The significance of that: Green Mountain and Lavazza have been working on their own single-serve espresso machine, the timing of which still hasn’t been announced.

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