Good article.

http://ibankcoin.com/flyblog/2009/11/07/...

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Many of you are familiar with “The K-Cup,” made by Keurig, which is a wholly owned subsidiary of Green Mountain Coffee Roasters Inc. (GMCR: 67.61 -0.63%) . However, what you don’t realize is how popular this thing is becoming. They are selling the K-Cup everywhere, from (LOW: 20.94 +4.33%) to Wal-Mart Stores, Inc. (WMT: 51.25 -0.06%) to your local grocery store. And, many of the big coffee vendors are producing single cup servings, that can only be used in the Keurig. Do you follow me?

Green Mountain Coffee Roasters Inc. (GMCR: 67.61 -0.63%) has created a monster brand, not only owning the hardware, but they also sell Tully’s coffee an their own brand Green Mountain Coffee too (both supply K-Cup lovers with great coffee).Mark my words, soon enough, Starbucks Corporation (SBUX: 21.12 +7.21%) and Dunkin’ Donuts will produce single cup coffee (for the Keurig). Other publicly traded companies that make single cup coffee are (DDRX: 26.40 +1.58%) and (CBOU: 8.64 -0.80%) . Other non-K-Cup producers worth watching, in the event they get smart, are (FARM: 19.47 +0.72%) , The J.M. Smucker Company (SJM: 52.68 -0.28%) (Folgers) and of course (SBUX: 21.12 +7.21%).


As you know, (PEET: 39.31 +7.40%) just acquired (DDRX: 26.40 +1.58%) (K-Cup producer) . As a result, it is likely that (PEET: 39.31 +7.40%) will enter the single cup coffee market in a big way, being the biggest retailer of coffee on the west coast, with 32% market share.

For every K-Cup sold, Green Mountain Coffee Roasters Inc. (GMCR: 67.61 -0.63%) makes .06. However, for every in-house cup (Green Mountain and Tully brands) sold, they make .12. The company is enjoying upwards of 60% revenue and 120% in net earnings growth; and the stock is not expensive, based upon 2011 estimates of $2.30—which is a low estimate. In early 2010, the company will embark on a number of licensing initiatives, with Cuisinart and Jarden Corporation (JAH: 26.81 -2.15%) (Mr. Coffee) to sell single cup coffee markers, using the patented Keurig technology. This market is going to explode.