Starbucks (SBUX) has had it pretty easy when it comes to the business of selling single-serve coffee pods called K-Cups -- simply mint money by licensing its powerful name to pod manufacturer Keurig Green Mountain (GMCR) .
But that cost-friendly arrangement for the Seattle-based coffee king may be about to change.
"We are 100% committed to the K-Cup market, but the one thing that is uncertain is if we will go at it alone," said Starbucks chairman and CEO Howard Schultz on a call with analysts Thursday evening. What Schultz was referring to was whether the impending acquisition of Keurig Green Mountain by a coffee competitor would force it to build its own K-Cup manufacturing platform.
Starbucks works with Kfee to make pods for its own Verismo single-serve coffee machine, according to a Starbucks spokesperson, but the Keurig-produced K-cups make up the majority of Starbucks' single-serve coffee business.
Keurig Green Mountain, the maker of the eponymous single-serve coffee machine, announced in December that it will be acquired by an investor group led by JAB Holding Companies for an eye-popping $13.9 billion. With the deal, Keurig -- which also produces various flavored pods under its own brand name -- will join a diverse portfolio of consumer-oriented companies. JAB owns controlling stakes in Jacobs Douwe Egberts, a coffee and tea giant that owns Gevalia, as well as other coffee brands that compete with Starbucks.