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UPDATE 1-Green Mountain's Keurig to serve Snapple ice teas

(Adds analyst's comment, share activity; changes headline)

Oct 9 (Reuters) - Green Mountain Coffee Roasters Inc

struck a deal with Dr Pepper Snapple Group Incto offer Snapple iced teas in single-serve packs for its Keurigand Vue brewers, the companies said on Tuesday.

The deal, which complements similar ones with Starbucks, Dunkin' Brands Group Inc and Caribou CoffeeCo , comes as Green Mountain is working to fend offcompetition from lower-cost rivals, including private-labelmanufacturers.

The addition of Snapple "demonstrates Green Mountain'sability to attract and align itself with the best consumerbrands, further bolstering its variety of offerings andrelevance to consumers," Lazard Capital analyst Matthew DiFriscosaid.

The Snapple K-Cup pack iced teas will be available in theUnited States and Canada in spring 2013, with Vue packs tofollow, the companies said in a joint statement on Tuesday.

Green Mountain's stock has been under pressure as investorshave been concerned that recent rebates on coffee brewers wouldhurt the company's profit margins. But DiFrisco said thoseconcerns appear "overblown," citing conversations withmanagement in which they affirmed that the rebates were plannedand factored into the company's previous forecast.

Single-serve coffee pods are expected to reach $959.1million in retail sales this year - up 32 percent, according toEuromonitor International. That would account for about 10percent of the overall coffee market, which is expected to growby only 6 percent this year.

Green Mountain shares rose 24 cents, or 1.1 percent, to$22.77 in midday trade on the New York Stock Exchange. Dr Peppershares were down 12 cents, or 0.3 percent, to $43.93.

(Reporting By Dhanya Skariachan and Martinne Geller; Editing byGerald E. McCormick and Jan Paschal)

((dhanya.skariachan@thomsonreuters.com)(+1 646 2236191)(Reuters Messaging: Follow me on Twitter: @DhanyaTweets))

Keywords: GREENMOUNTAIN SNAPPLE