Green Mountain Coffee Roasters has announced a deal with Campbell Soup to start selling chicken soup K-cups for Keurig beverage machines.
K-Cups, for the uninitiated, are single-serving pods filled with beverage powder mix — usually hot chocolate, tea, or coffee. When you insert one in a Keurig machine and press the button, the machine punctures the foil lid and plastic bottom, and shoots hot water through the pod. What you get is an insta-brewed hot beverage, without the hassle of separating paper filters, boiling water, or steeping a tea bag.
They're nifty. But they've also been a challenge for Green Mountain's share price since 2011, when hedge fund manager David Einhorn publicly announced he was shorting the stock. In a 110-page presentation to other investors, Einhorn explained that with the patent on K-cups expiring and Starbucks gearing up to release its own instant coffee machine, the Verisimo, Green Mountain was about to face a crushing wave of competition. The stock price plummeted after his remarks, and though it's back up, it's nowhere near pre-Einhorn levels.
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Well, Einhorn had a point. Despite Green Mountain's licensing agreements with coffee giants like Dunkin' Donuts, the K-cup market is starting to get crowded. Now, the company is betting that consumers will want their Keurigs to do more than just brew coffee, which is where the packets of dehydrated chicken broth come in.
Some, like The Huffington Post's Carey Polis, think canned soup is already convenient enough:
But Green Mountain says customers have already reported using their Keurig machines to add hot water to soup mix. "We don't think we will have to convince consumers to think of their Keurig machines this way; they already are," Green Mountain CEO Brian Kelley told The Wall Street Journal.
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