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Dunkin' Brands to Test Pods for Green Mountain's Vue

Dunkin’ Brands Group Inc. (DNKN), which started selling Dunkin’ Donuts single-serve K-Cup pods last year, will test capsules for Green Mountain Coffee Roasters Inc. (GMCR)’s new coffee maker.

Dunkin’ will do “some sort of test over the balance of this year,” Chief Financial Officer Neil Moses said in an interview today. While the Canton, Massachusetts-based chain has seen and likes the new Vue brewer, a decision on whether to sell V-Cups won’t be made until the end of the year, he said.

Dunkin’ Brands is working to boost sales and attract at- home coffee drinkers by selling K-Cups for the Keurig brewer in its stores. Green Mountain introduced the Vue machine earlier this year to help combat competition when the main patents for its K-Cups expire in September.

Private-label capsules that fit the Keurig aren’t hurting Dunkin’s K-Cup sales, Moses said. The company’s contract with Green Mountain is “short enough that we have flexibility” to get out of it if too many competitors come on the market and crimp Dunkin’s sales, he said, declining to say the length of the contract. Seattle-based Starbucks Corp. (SBUX) also sells K-Cups.

First-quarter net income at Dunkin’ was $26 million compared with a loss of $1.7 million a year earlier. Excluding some items, profit totaled 25 cents a share, beating the 23-cent average of 12 analysts’ estimates compiled by Bloomberg.

Dunkin’ rose 2.7 percent to $32.57 at the close in New York. The shares have gained 30 percent this year.

The company, which has about 7,000 Dunkin’ Donuts locations in the U.S., also owns the Baskin-Robbins ice cream brand.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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