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Keurig Green Mountain Gets Greener with Double-Certified Coffee

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Keurig’s new launch

Keurig Green Mountain (GMCR) launched its Green Mountain Coffee Organic line on June 26. This new line is both organic and certified fair trade, making it the first double-certified line of Green Mountain coffee available for the Keurig hot brewing system.

The new line of double-certified coffee comes in four varieties:

  • Ethiopia Yirgacheffe
  • Peru Cajamarca
  • Sumatra Aceh
  • Founder’s Blend

The first three varieties are single-origin coffees sourced from Ethiopia, the Cajamarca region of Peru, and the northern Sumatran province of Aceh, respectively. Founder’s Blend is a medium-roast coffee with notes of floral citrus, apple, and caramel.

Keurig Green Mountain’s double-certified coffees are available in ten- and sixteen-count boxes of K-Cup pods priced at $9.49 and $11.49, respectively.

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Fair trade sourcing

A Fair Trade Certified label from Fair Trade USA on a product indicates that the company has purchased ingredients from certified farms and organizations at fair trade prices and premiums. Fair trade sourcing has become part of the sustainability practices at several food and beverage companies. It gives farmers across the world the opportunity to sell more of their products, including cocoa and sugar, on fair trade terms.

In fiscal 2014, Keurig Green Mountain purchased 43.4 million pounds of coffee from Fair Trade Certified sources. This figure represents ~19% of the company’s total coffee purchases that year. Yet it should be noted that in fiscal 2014, the amount of Fair Trade Certified coffee purchased by Keurig declined by 23.7%. Meanwhile, the purchase of farm-identified coffee increased by 17.5%. Keurig’s farm-identified program is a traceability program that aims to identify the source of coffee purchased.

Keurig Green Mountain makes up ~0.5% of the portfolio holdings of the Consumer Staples Select Sector SPDR Fund (XLP) and 0.1% of the iShares Russell 1000 Growth ETF (IWF).

PepsiCo (PEP) has a number of products that are certified to the Fair Trade USA standard, including its Naked Coconut Water brand. In 2014, 8.6% of Starbucks’s (SBUX) coffee was Fair Trade USA certified.

The next part of this series looks at the demand for organic coffee.

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