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Green Mountain Coffee Roasters Inc. (GMCR), Starbucks Corporation (SBUX): More than Enough Coffee to Go Around

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My instinct a few months ago would have been to avoid Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), and I would have been foolish in the short-term. However, I still remain uncertain about the long-term outlook for the company.

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)’s price recovery raises expectations. The company can be profitable without significant growth–that means that the company can stay in business, but might not be able to keep the price rising. The Starbucks Corporation (NASDAQ:SBUX) news provides the most important piece of the puzzle.

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)

Partnership between rivals?

Starbucks Corporation (NASDAQ:SBUX) and Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) have renewed their partnership to offer Starbucks Corporation (NASDAQ:SBUX) coffee in Keurig machines with single serve K-cups. Starbucks Corporation (NASDAQ:SBUX) has entered the single-serve market itself with its Verismo machines, which are not compatible with K-cups.

A lot of people own Keurig machines, and the switch to Verismo is not going to happen very fast. Starbucks Corporation (NASDAQ:SBUX) has a substantial fan base that bought Keurig machines over the years. The deal goes beyond extending the status quo. Starbucks Corporation (NASDAQ:SBUX) will be adding Seattle’s Best and Teavana K-cups. The Verismo seems targeted at Starbucks fans, as most of the marketing appears in the stores and on the website. The marketing for Keurig is more extensive.

Enter Rubi

Seattle’s Best will also be coming to a few square feet near you in the form of the Coinstar, Inc. (NASDAQ:CSTR) Rubi machines. I still have yet to find a machine to try, but I eagerly await the chance. Coinstar, Inc. (NASDAQ:CSTR) is an extremely innovative company, and it is frequently underestimated. The coin machines are now integrated with PayPal, allowing you to add and request money from your Paypal account at the machine.

The Rubi looks impressive, and is seeing significant traffic at the locations in which it has been installed. It should provide an additional revenue stream for Starbucks in the Seattle’s Best brand, especially after the shutdown of Borders.

The final thing for Coinstar are its beauty product kiosks, which have massive potential. These machines dispense samples of beauty products for $1 so that consumers can try out a product. This leads to a lot of opportunities to partner with companies coming out with new beauty products.

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