* Supervalu's private brand pods work with Keurig brewers
* Pods to be more lightweight than leading brand
* Shares of Supervalu, Green Mountain both down
By Martinne Geller
Sept 4 Supervalu Inc plans to launch its
own single-serve coffee cups compatible with leading brewing
systems, including the Keurig, made by Green Mountain Coffee
Roasters Inc, the supermarket operator said on Tuesday.
The product, to be called Java Delight Single Serve UnCup,
will go on sale this month in six flavors at the chain's 1,100
retail stores, which include Albertsons, Jewel-Osco and Shop 'N
Analysts and investors have been bracing for an onslaught of
competition from lower-cost competitors to Green Mountain, since
two of Green Mountain's patents governing pod design are
expiring this month.
Supervalu did not say how much its pods would sell for, or
who the manufacturer was, but it was clear that they are not
being made by Green Mountain, the No. 1 seller of single-serve
coffee pods in the United States.
A photo of the UnCup showed that it is made from mesh,
whereas Green Mountain's cups are made from plastic. Sam
Mayberry, Supervalu's vice president of private brands said the
UnCup pod uses 30 percent less material by weight than the
leading national brand pod.
A Supervalu spokesman declined to identify the manufacturer
saying only that the UnCup will be "competitively priced below
the national brands".
Other grocers, including Kroger and Safeway,
are selling, or are planning to sell, their own private label
coffee pods as well. Reuters first reported news of those
retailers' entries in the market in June.
This has hurt Green Mountain's shares, since the competition
could pressure prices in the overall category and ultimately
hurt Green Mountain's profit margins.
Green Mountain makes most of its money from its so-called
K-Cups. It sells the Keurig brewers at cost in order to drive
Green Mountain spokeswoman Suzanne DuLong said the entry of
unlicensed manufacturers has already been factored into Green
Mountain's forecasts for 2013 and beyond. She added that the
company will continue to defend its intellectual property
The company has sued two private label manufacturers for
alleged patent infringement.
Supervalu shares were down 13 cents, or 5.4 percent, at
$2.25 on the New York Stock Exchange. They were down before the
statement. Green Mountain shares were down 34 cents, or 1.4
percent, at $23.96 on the Nasdaq.