Green Mountain Coffee Roasters Inc. (GMCR)’s prices were recently lowered in some grocery stores, according to data released today from SymphonyIRI Group.
Green Mountain single-cup coffee was 1.1 percent less expensive in the four weeks ended June 10 at food, drug and mass retailers excluding Wal-Mart Stores Inc. (WMT), compared with a year earlier, data from the Chicago-based researcher show. Packaged coffee prices for the overall category were up 4.9 percent in the four-week period.
The company is facing increased competition from private- label brands entering the single-cup coffee category as the main patents for its K-Cups expire in September. Kroger Co. (KR), the biggest U.S. grocery chain, said earlier this month that it’s planning to sell its own version of the pods used in Green Mountain’s Keurig brewers.
“Green Mountain is still a premium-priced product,” Kenneth Shea, senior consumer products analyst with Bloomberg Industries, said in an interview. “They have to keep pricing level or down if they’re going to fight this private-label threat.”
Safeway Inc. (SWY), the second-largest U.S. grocer, makes cappuccino and hot cocoa capsules under its private-label Safeway Select brand that fit into Keurig machines. The Pleasanton, California-based supermarket recently said it is introducing five new single-serving coffee flavors at all its U.S. stores.
Green Mountain single-cup coffee cost $7.89 a unit, on average, whereas private-label brands were $5.43 and all coffee was $6.86 during the four-week period, the data show. Starbucks Corp. (SBUX) ground-coffee prices, at $8.97 a unit, were also lower at food, drug and mass retailers compared with last year.
“Single-cup continues to be a growth driver of the coffee category,” Suzanne DuLong, a Green Mountain spokeswoman, said in an e-mail. K-Cup prices may increase or decrease by about 3 percent and have been in a “pretty tight range” for the past 10 four-week periods, she said.
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