Starbucks Corp. agreed to end its status as the exclusive
super-premium coffee brand for Keurig Green Mountain Inc., in
exchange for Keurig expanding its range of Starbucks products.
The companies have an existing five-year agreement to make and
sell beverage pods under the coffeehouse chain's Starbucks and Tazo
brands for use in Keurig Green Mountain's Keurig single-serve
brewing systems. Last May, they extended the deal for a minimum of
five years and at the time said the deal "reinforces' Starbucks's
position as the exclusive super-premium coffee brand for Keurig's
single-serving K-Cups.
However, on Friday, Keurig executive Mark Wood said the amended
agreement "creates more favorable business terms for both companies
and allows us to build upon our strong relationship."
Starbucks will receive "improved business terms," as part of the
changes, including significantly expanded Starbucks K-Cup pack and
variety types, the companies said.
Nearly 2 billion Starbucks K-Cup packs shipped from the
inception of the companies' relationship through the end of 2013.
Starbucks and Keurig Green Mountain first entered into a
partnership in March 2011.
The contract change comes about a month after Coca-Cola Co.
signed a 10-year partnership to sell its drinks through an at-home
beverage system being developed by Keurig Green Mountain. Coke also
agreed to acquire a 10% stake in Keurig Green Mountain for about
$1.25 billion.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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