Keurig Green Mountain

Keurig Green Mountain has dropped the most in three years after cutting sales and profit forecast. The maker of single-serve brewers now expects sales to suffer a large decline in the low to middle single digits this year. This larger decrease in sells will wipe out more than $3 billion from Keurig’s market value. This will be one of the company’s largest setback. This slowdown is not helpful for a business struggling to beat private-label competition such as Starbucks.

In 2014, Keurig's net income fell to $113.6 million which is 73 cents a share and in the third quarter ended June 27, 2013 it fell from $155.2 million which is 94 cents a share. Also in this year revenue fell 5.2 percent to $969.5 million. Forecasters were expecting adjusted earnings of 79 cents a share and revenue of $1.04 billion. In the most recent quarter, Keurig saw its brewer and accessories sales decrease 23%.  Shares have dropped steadily this year, with Keurig losing more than half its stock value year-to-date. The company reported disastrously bad results last month and planned layoffs of 330 workers. Sales dropped 5% in the most recent quarter. USDA report indicated that forecast coffee in the United States will fall to 23.7 million 60-kg bags in the upcoming 2015/ 2016 season. USDA forecast a1.25% decline at the end of September.

Customers also have been slow to adopt Keurig’s new 2.0 brewer machine that is valued at $199, this is also hurting sales of its K-Cup pods. A new cold-drink machine, which could compete with devices from Soda Stream International Ltd., is launch later than investors had hoped for due to low profit margins. The projected date for the clod brew machine in the fall is 2016.

Keurig has been working on several things to increase sells. Two years after announcing a partnership with the Campbell Soup Co. the coffee company is coming out with pods that will allow coffee fans to make a cup of hot soup in their Keurig machines. The product is available in two flavors: chicken noodle soup and Southwest chicken noodle soup. This 70-calorie treat is said to have no artificial colors or flavors and the soup will costs the customer $11.99 for an 8-pack of cups and packets. Keurig is very excited about this merger because sales are expected to increase to $1.13 billion from $1.1 billion.