North American coffee roaster Green Mountain emerged as one of the most dynamic forces in the local drinks market in the late 2000s as a result of the extraordinary success of its Keurig single serve home coffee systems. Spectacular growth since 2008 established it as the world's 4th largest coffee company by 2013. In its main market of North America, Keurig is the clear #1 in personal coffee-making systems, far ahead of rivals such as Senseo or Nespresso. The machine uses the company's proprietary K-Cup coffee pods, and Keurig cemented its position with a series of key alliances with other roasters. In addition to its own Green Mountain, Laughing Man, Original Donut Shop, Van Houtte and other proprietary blends it hosts co-branded capsules for all its main tea and coffee rivals including Starbucks, Folgers, Dunkin Donuts, Lavazza, Lipton, Celestial Seasonings and Twinings. However a move into soft drinks with the Keurig Kold system backed by Coca-Cola proved unsuccessful. The first machines launched in 4Q 2015, but consumer response was poor. A few months later, the company agreed to be acquired by JAB Holdings, also the controlling shareholders in Jacobs Douwe Egberts. Former Mars executive Bob Gamgort succeeded Brian Kelley as CEO in 2016. Soon afterwards, Keurig Kold was scrapped. Revenues rose by more than 500% between 2009 and 2014, reaching highs of $4.7bn in 2014. Pod sales accounted for 80% of revenues. In early 2018, the group agreed a reverse takeover of soft drinks company Dr Pepper Snapple Group for around $22bn in cash and stock, creating Keurig Dr Pepper. Green Mountain founder Bob Stiller bought a small cafe in Vermont in 1981, and expanded its coffee roasting operations to supply corporate customers. Green Mountain Coffee Roasters went public in 1993, and acquired coffee machine maker Keurig in 2006. Stiller stepped down as CEO in 2007 and retired from the business altogether in 2012.
Capsule checked 8th August 2018
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Adbrands Weekly Update 1st Feb 2018: Keurig Green Mountain, one of two coffee businesses controlled by family-controlled investment group JAB Holdings, has agreed to acquire soft drinks company Dr Pepper Snapple for $19bn in cash and around another $3bn stock. It is the biggest deal ever in the soft drinks industry, and also the largest to-date from the voraciously acquisitive Reimann family of Germany, who sit behind JAB. Structured as a reverse takeover of publicly quoted DPSG by Keurig, the deal will create a coffee and soda giant with sales of $11bn. Current DPSG shareholders will end up with around 13% of the merged entity. Mondelez, which had owned 24% of Keurig, will reduce to around the same percentage. Keurig CEO Bob Gamgort will lead the merged Keurig Dr Pepper. "To continue to prosper as a company within this space, you need to be able to offer multiple beverage formats, multiple beverage brands and to be able to deliver those brands across platforms," he said. The merger will give Keurig access to Dr Pepper’s traditional distribution network, and provide a much strong ecommerce platform for DPSG's soft drinks portfolio. The takeover creates a new milestone in the extraordinary expansion of JAB, which also controls the coffee roaster and retailer Jacobs Douwe Egberts, Krispy Kreme Donuts and sandwich retailer Panera Bread.
Adbrands Weekly Update 16th Nov 2017: Polarisation between supporters of America's political left and right over Fox News coverage continues to increase. It's hard to see (and worrying to imagine) where this escalation will end. Left-wing group Media Matters called for an advertiser boycott of lead anchor Sean Hannity's top-rated primetime show after he appeared to go easy on Alabama Senate candidate Roy Moore, who has been accused of past inappropriate contact with underage girls. Several advertisers, including E-Trade and Keurig, withdrew spots from the show, prompting a return boycott from Hannity's fans. Some posted videos of themselves smashing their Keurig coffeemakers; the backlash was so intense that Keurig CEO Bob Gamgort was forced to issue a statement apologising for "taking sides" over the issue.
Adbrands Weekly Update 12th Jan 2017: Apparently undeterred by the failure of the Keurig Kold soft drinks dispenser, AB InBev is teaming up with Keurig - now owned by German-Austrian investment giant JAB Holdings - to develop a home drinks system for alcoholic beverages. The two groups already have close links. One of JAB's three managing partners, Olivier Goudet, is also chairman of AB InBev.
Adbrands Weekly Update 9th Jun 2016: Keurig Green Mountain, now a subsidiary of JAB Holdings, pulled the plug on its Keurig Kold soda dispenser which launched last year to universally negative reviews and weak consumer demand. Too slow, too big and too expensive, was the general reaction. Keurig said it will refund (the not very many) customers who bought the machine at a pricey $370, and will focus instead on its core market: its Keurig home coffee maker machines, which are as ubiquitous in the US as Nespresso is in Europe.
Adbrands Weekly Update 10th Dec 2015: Keurig Green Mountain, makers of the Keurig coffee system which dominates the US single-serve market, is to join the fast-expanding portfolio of family-controlled investment group JAB Holdings. That group already has extensive interests in the coffee market, including global leader Jacobs Douwe Egberts and US roaster and retailers Peet's and Caribou. Other interests include a major holding in beauty giant Coty and private ownership of luxury group Labelux. After rapid growth over the past few years, Keurig's performance has slumped dramatically since the end of 2014. Its latest generation of coffee machines initially flopped because they weren't compatible with existing K-Cups pods, and response to the company's new Keurig Kold drinks dispensers has been lukewarm at best, despite its exclusive tie-up with Coca-Cola, also a minority shareholder. JAB and its supporting investors will acquire Keurig for $13.9bn. Coca-Cola has endorsed the buyout and will remain a shareholder.
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