Safeway to Introduce Its Own K-Cup Coffees

by Christopher Freeburn | June 15, 2012 12:06 pm

Safeway (NYSE:SWY[1]) supermarkets will soon offer its own branded coffees[2] in single-serving containers designed to fit the popular Keurig coffee brewing machine from Green Mountain Coffee Roasters (NASDAQ:GMCR[3]).

The supermarket will offer five varieties of its coffees in K-Cup containers. They’ll join its existing line of instant K-Cups drinks, launched in January, which include two cappuccinos and a hot cocoa drink, Reuters noted.

Safeway’s announcement comes just days after Kroger‘s (NYSE:KR[4]) said it plans to offer its branded coffees in K-Cups[5].

The supermarkets join Starbucks (NASDAQ:SBUX[6]), Kraft (NYSE:KFT[7]), Sara Lee (NYSE:SLE[8]) and Nestle (PINK:NSRGY[9]) in offering coffee in K-Cups. The growing market for K-Cup packaged coffees may ultimately hurt Green Mountain’s sales because supermarket brands are priced well below Green Mountain-branded K-Cups.

Making the Keurig-compatible containers for Safeway is Rogers Family, a California-based manufacturer that doesn’t have a licensing agreement with Green Mountain[10] and has been sued by the coffee maker for patent infringement. Rogers contends that design differences in its Keurig-compatible containers avoid infringing on Green Mountain’s patents.

Shares of both Safeway and Green Mountain Coffee Roasters slipped more than 1% in Friday midday trading.

Endnotes:

  1. SWY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SWY
  2. soon offer its own branded coffees: http://www.reuters.com/article/2012/06/12/safeway-keurig-idUSL1E8HC6Z220120612
  3. GMCR: http://studio-5.financialcontent.com/investplace/quote?Symbol=GMCR
  4. KR: http://studio-5.financialcontent.com/investplace/quote?Symbol=KR
  5. plans to offer its branded coffees in K-Cups: https://investorplace.com/2012/06/krogers-to-sell-k-cups-green-mountain-shares-drop/
  6. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX
  7. KFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=KFT
  8. SLE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SLE
  9. NSRGY: http://studio-5.financialcontent.com/investplace/quote?Symbol=NSRGY
  10. that doesn’t have a licensing agreement with Green Mountain: http://www.reuters.com/article/2012/06/14/us-rogers-coffee-idUSBRE85D1KU20120614

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