Starbucks and Keurig: Who Needs Who More?

(TheStreet) -- Starbucks SBUX just broke up with its longtime supermarket distributor Kraft KFT and seems to have its eye on Green Mountain Coffee Roasters GMCR for a steamy single-cup partnership. But who wants who more? If both Starbucks' recent struggles and Green Mountain's highly caffeinated rise are indication, the neediest suitor in the single-serve scene lives in Seattle. "Starbucks needs a single-serve solution, and there's no question they're going to have to have one," says Scott Van Winkle, consumer analyst for Canaccord Genuity. "Green Mountain doesn't need Starbucks." Starbucks broke off its grocery distribution deal with Kraft on Tuesday after an ugly court battle in which Starbucks accused Kraft of not doing everything it could to "protect and promote" its Starbucks and Seattle's Best Coffee brands. Kraft still maintains that it brought Starbucks' grocery sales from $50 million in 2004 to $500 million last year, but the market has changed a bit since 1998, and the paltry 2.6% of the single-serve coffee business that Kraft's Tassimo holds is a tall compared with the grande 70% to 80% share held by Green Mountain's Keurig machine. Continue reading the article.