Green Mountain Rises on Private-Brand K-Cups for Costco

Green Mountain Coffee Roasters Inc. (GMCR), maker of Keurig K-Cups and brewers, rose the most in three months after saying it will make private-label capsules for Costco Wholesale (COST) Corp.

The shares climbed about 9 percent to $26.34 at the close in New York, the biggest increase since Sept. 10. The Waterbury, Vermont-based company has lost 41 percent this year.

Green Mountain will be the exclusive K-Cup pack manufacturer for Costco’s Kirkland Signature brand, the brewer said in a statement. Green Mountain is making so-called Breakfast Blend and Pacific Bold single-cup capsule varieties that will be for sale this month at the Issaquah, Washington- based company’s club stores and website.

Green Mountain is facing increasing competition from private-label capsules made by Kroger Co. (KR) and Safeway Inc. (SWY) that fit into Keurig brewers. Green Mountain also sells branded K- Cups under the Tully’s Coffee, Newman’s Own Organics and Cafe Escapes names.

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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