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Mondelez International Inc (MDLZ), Green Mountain Coffee Roasters Inc. (GMCR): Where to Invest in the Single-Serve Market

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Shares of Mondelez International Inc (NASDAQ:MDLZ) rose slightly after the announcement of Nespresso-compatible espresso capsules and continuing an investment in its Tassimo multi-beverage product. Tassimo is sold in most major retail stores as well as wholesale on the company’s website. There is more to the individual beverage market than selling the best brewing machines, however. Cross-pod contamination from rival companies is emerging as the pod category continues to grow with Keurig, Tassimo, and Nespresso beverages.

Mondelez International Inc (NASDAQ:MDLZ)

Copycat wars

For Mondelez International Inc (NASDAQ:MDLZ), the chance to tap into the $80 billion global coffee industry and the $8 billion single-serve industry is vital to the success of the company’s global coffee growth plan. With both the “Jacobs” and “Carte Noire” brands offering the single-serve packets, the company is poised to make entry into the Nespresso machine to drive its bottom line coffee growth. With revenue of over $35 billion in 2012 and emerging as the no. 2 leader in global coffee market, the future looks bright for this snacking company.

Mondelez International Inc (NASDAQ:MDLZ) has done very well since its spin-off from Kraft Foods. With $8.7 billion in revenue and organic net revenues of 3.8%, this snacking giant has grown substantially in the last year. It has also grown in emerging markets, showing double-digit growth in China, Brazil and India. The company has a presence in 165 countries, with over 110,000 employees worldwide.

Mondelez International Inc (NASDAQ:MDLZ) sees a great opportunity to expand its coffee category holdings while leveraging its huge international presence as a means of expanding production and increasing market share. Currently, Tassimo is one of the company’s powerhouse brands and is one of six brands which account for 50% of the company’s beverage, cheese, and dairy revenue. With the expansion into the Nespresso market, however, the brand can grow even more.

What does this mean for Nestlé?

With the single serve market growing by 14% since 2006, Nescafé and Dolce Gusto lead single serve market with over a 70% market share in Europe. Although Nestle SA Reg Shs. Ser. B Spons (ADR) (NASDAQOTH:NSRGY)‘s sales from Nespresso have slowed, rival companies have started to penetrate the market with outside beverage capsules. Nestle SA Reg Shs. Ser. B Spons (ADR) (NASDAQOTH:NSRGY) owns 30 smart and stylish designer machines with an elegant Grands Crus capsule collection. With a limited selection of 19 flavors, however, Nestlé is inviting competitors to take part in its collection even though it currently leads the market with 19% of the espresso & filter-portioned coffee machine sales.

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