K-cup Pricing

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Sun, 04/14/2013 - 8:45am -- Seth Golden

According to data from Nielson, Starbucks' $-share in K-cups declined 70 bps in the four weeks ending March 16th. Starbuck's sequential $-share declined 70 bps to 15.8 percent. Meanwhile, Green Mountain Coffee Roasters added 190 bps to $-share.

"Total KCups (all brands exprivate label) $ sales as a % of the ground coffee category were 26.5% down from 26.9% last period, although these do not include private label kcups, suggesting that kcups continue to take $ share of ground. Similarly, total KCups units (ex kcups) comprised 16.9% of the ground coffee category, from 17.3% last period. Total KCup (all brands) $ sales growth remains strong but decelerating increasing 35.7% this period, on a 36.4% increase in avg. eq. units and ~0.7% decrease in avg. eq. unit price," said Herzog, citing the Nielson Data.

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Detwiler Fenton said channel checks indicate a noticeable decline in Starbucks (SBUX) K-Cup prices and to a lesser degree, declines at Green Mountain (GMCR). The firm said competition is increasing and expects margin pressures in the future.

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