Green Mountain Coffee Roasters Inc. (NYSE:GMCR) reported earnings today after the market close. The biggest news was the company’s announcement of a deal with KO. Shares of Green Mountain Coffee Roasters Inc. (NYSE:GMCR) skyrocketed (currently up over 40% in after hours trading) on the news. Below are remarks President and CEO, Brian Kelly‘s on the deal from the company’s conference call.
Brian Kelley our President and CEO Green Mountain Coffee Roasters Inc. (NYSE:GMCR)
We’ll quickly get to our first quarter results, but prior to that I’m very excited to discuss our new long-term agreement with the world’s largest beverage company, The Coca-Cola Company (NYSE:KO) to develop and globally launch our upcoming Keurig cold system.
We’ve spoken before about our conviction that with disruptive innovation Keurig can do for cold beverages what we’ve done for hot coffee and tea at home.
That is give consumers a convenient way to quickly produce their favorite cold beverage brands at the push of a button.
Toad’s agreement combines the unparalleled strength of the Coca-Cola and distribution system.
With the breakthrough technology of our new Keurig cold system.
We’re confident that our complementary assets will deliver a superior premium in home cold beverage experience for consumers globally.
Let me briefly recap the details of the agreement and the benefits we see for Green Mountain Coffee Roasters Inc. (NYSE:GMCR)’s shareholders, customers, supplier partners, employees and other stakeholders.
We have signed a 10-year commercial and strategic collaboration agreement that gives us access to coke’s beverage brands in the US and in more than 200 countries around the world.
This partnership also brings the benefit of Coke’s significant R and D technology, sales, marketing and distribution strengths.
In an effort to ensure the long-term interests of both companies are tightly aligned Coke is acquiring a minority equity position of 10% in GMCR.
Over the last six or seven years, we’ve experienced the truly remarkable growth of our Keurig system for hot beverages as it has changed the way consumers brew coffee at home, and we are still in the very early stages of that growth both here in the US andened a the world.
With the announcement of today’s partnership with Coke we are embarking on an exciting new journey to successfully introduce a second disruptive global platform for our company, a cold beverage system to further diversify our portfolio materially expand the addressable marketplace opportunity for us, and enhance the long-term growth of our company.
As with our hot system, we will have multiple brands and multiparking light partners in our cold system over time to offer the world’s finest cold beverages to Keurig consumers.
Opportunities as large and attractive as this are rare, so everyone involved in this partnership is very excited about the future.
We are still in the very early days of a broad movement that is empowering consumers to change the way they purchase, prepare and customize beverages in their home, and the Keurig brewing system technology is leading this evolution.
Having the cocoa la company as our partner and collaborator in this effort will amplify and accelerate this consumer movement.
We’ll continue to provide updates as progress warrants but will now focus the remainder of our comments on our fourth quarter results.