Vermont-based coffee maker Green Mountain Coffee Roasters (NASDAQ:GMCR) announced that it will begin making coffee capsules for Costco (NASDAQ:COST). The deal makes Green Mountain the exclusive maker of K-Cups for Costco’s Kirkland Signature brand.
Costco is developing two coffee blends for Costco, a light breakfast blend and a darker roast. They should be available in December 2012.
Green Mountain shares, which had lost more than half their value this year, climbed 9% yesterday following the announcement and are up again Friday morning in early trading. The shares have been down significantly as Green Mountain faced increasing market pressure from Kroger (NYSE:KR) and Safeway (NYSE:SWY), both of whom also make capsules for Keurig machines.