Forecasting below estimates from analysts, Keurig Green Mountain Incorporated expects a slow down due to rising coffee prices and tight competition among coffee pod manufacturers. Because of that, the company’s share fell to 1.2 percent when markets closed on Wednesday.
In the past years, the company is trying to expand beyond its main business of K-cup coffee packets as it competes with rivals, including the Tree House Foods Incorporated. Right now, it is developing a cold drink machine that it expects to launch by the fall of the recent year preceded by the launch of a coffee brewing system they call the Keurig 2.0.
CEO Brian Kelley revealed that while their consumers are satisfied with the brewer’s quality, some of them found that unlicensed packs are not accepted by it resulting to confused and disappointed consumers, especially if they have those unlicensed coffee packets.
For the first quarter of this year, it forecasts earnings of up to 88 cents per share just below what the analyst revealed earlier of 96 cents. Keurig Green Mountain reported higher expected revenue for this fourth quarter with help from its main revenue-generating product, coffee portion packs which increased by 22 percent in sales in the last quarter of last year ending in September 27.