Starbucks, Keurig Green Mountain amend agreement
Starbucks loses exclusivity as super-premium coffee for Keurig but gains K-Cup expansion
Starbucks Coffee Co., Seattle, and Keurig Green Mountain Inc., Waterbury, Vt., announced amended terms to their existing five-year agreement, which they reached last summer.
The updated agreement eliminates Starbucks’ exclusivity terms as the super-premium coffee for the Keurig brewing system. In exchange, Starbucks will receive improved business terms, including significantly expanded Starbucks K-Cup pack and variety types, the company says.
Under the companies’ previous 2013 agreement, which replaced their original agreement in 2011, Starbucks retained its position as the exclusive licensed super-premium coffee brand on the Keurig brewing platform. That agreement also added Seattle’s Best Coffee, Torrefazione Italia, Teavana and Starbucks Cocoa brands and tripled the number of Starbucks K-Cup products.
“This amendment advances Starbucks’ commitment to strengthening its global leadership position in the nearly $8 billion premium single-cup coffee category,” said John Culver, Starbucks Coffee Co. group president for China and Asia-Pacific, channel development, and emerging brands, in a statement. “With nearly 2 billion Starbucks K-Cup packs shipped from the inception of our relationship through the end of 2013, this contractual update underscores the appeal of Starbucks to the millions of Keurig brewer owners and the continued innovation and collaboration our relationship reflects.”
Mark Wood, senior vice president of global hot systems for Keurig, added, “This amended agreement creates more favorable business terms for both companies and allows us to build upon our strong relationship.”
Originally launched in November 2011, Starbucks K-Cups have recorded notable sales and were the top beverage in Chicago-based Information Resources Inc.’s (IRI) 2012 New Product Pacesetters with year-one sales of $198.9 million in multi-outlets.