Late this past Friday, Kroger, the biggest U.S. grocery chain, told news service Reuters in an interview that it would begin selling Private Brand single-serve coffee cups for Keurig machines that would compete with Green Mountain branded cups. As a result Green Mountain Coffee Roasters shares fell as much as 10% on Monday to a 52-week low.
Green Mountain’s key patents on the K-cup technology are set to expire this fall, opening it up to a world of new competition by retailer owned brands look to capture share with a lower-priced offering.
The Kroger spokesman wouldn’t say who the company is working with to develop the coffee pods.
“Kroger does not plan to self-manufacture at this time, and we generally don’t disclose the manufacturers of our corporate brand products for competitive reasons,” the spokesman said. Kroger plans to offer the new product under both its Private Selection and Kroger Brand.
Green Mountain has recently announced that it would begin offering Private Brand K-cups in order to keep up with the growing competition.
“We might consider selectively two or three or four possibly private-label brands, store brands, as everybody in the room knows they typically operate with a value to the consumer. However, again we won’t do them unless we think that they are profitable,” Chief Executive Larry Blanford said at a conference last week.