Green Mountain, Dunkin’ team up on single-serve joe

Globe Staff

Fans of Dunkin' Donuts coffee will soon have one more way to enjoy their joe: In singe-serve packets designed for a Keurig home coffee machine.

Dunkin', a coffee-and-baked-goods base chain based in Canton, entered the single-serve home coffee business last year. But its single-serve coffee wasn't originally available in K-Cups from Keurig, a unit of Green Mountain Coffee Roasters Inc. and the dominant player in the single-serve home coffee. Today Dunkin' Donuts and Green Mountain Coffee of Waterbury, Vt., said that Dunkin' coffee in single-serve K-Cup portion packs will become available in the summer.

"Our goal is to give our customers more ways to enjoy Dunkin' Donuts coffee," Dunkin' Donuts president Nigel Travis said.

Dunkin' coffee in K-Cup portion packs will be available only at participating Dunkin' Donuts restaurants, but not in grocery stores.

"The reality is that Keurig single-serve home brewers are becoming a major force in home coffee consumption," said Scott Van Winkle, an analyst with Canaccord Genuity, an institutional investment bank. "If you're not available in K-Cups, you're going to lose market share" in the single-serve home coffee business.

Green Mountain Coffee president and chief executive Lawrence J. Blanford estimates that Keurigs are in 6 to 8 percent of the US households that own coffee machines; the company sold 2.2 million Keurigs in its most recent quarter.

For Green Mountain, the agreement is part of a strategy to align itself "with the strongest coffee brands," Blanford said.

Green Mountain has identified single-serve home brewed coffee as a niche where it can thrive. Earlier this month, its stock took a hit when Starbucks Corp. announced plans to partner with Courtesy Products, a Keurig rival in the single-serve coffee business. Still, speculation continues that a deal between Starbucks and Green Mountain could eventually happen.

Blanford declined to discuss Starbucks today.

In a note to investors, Janney Capital Markets food analyst Mitchell Pinheiro wrote that he doesn't expect the Dunkin' agreement to "pressure Starbucks into joining Keurig as the Dunkin' coffee flavor profile is vastly different than Starbucks." Janney Capital Markets owns Green Mountain shares.

Pinheiro added, "The Dunkin' Donuts K-Cup agreement is a nice win for Keurig as it brings one of the strongest US coffee brands into its portfolio."