Ticker: GMCRClosing Price: $36.86

Adam BernthalJerry Hendrix Josh DeWittMatt Allemang

Company Background

o Founded in 1981

o Bought Keurig in 2006

o Leader in specialty coffee and single-cup brewing technology

o Licenses its patented Keurig Machine technology to competitors such as Mr. Coffee, Cuisinart, and Breville

Product Lineo Keurig-Single cup coffee makers– wide brew variety

o K-Cups- Owns several brands; multiple partnerships

o Rivo- New product line specializing in Espresso Based Beverages (EBBs)

Thesis

o New Product Lineo Expansion o Excess Devaluationo P/E Expansion

Recommendation: Buy

New Product Lineo Keurig Rivo

o Introduced: November 2012

o Release: Spring 2013

o Suggested Retail Price: $229

o 4 blends: Classico, Intenso, Decaf, and Delicato

o Produces over 10 specialty drinks

New Product Line

o The Rivo is the result of a partnership between Keurig and Lavazza

o Lavazza has been producing coffee since 1895

o Leading coffee brand in Italy and Europe

o 20 years of Experience in Single-Serve Expresso

Rivo Competitors

Nestle Nespresso Starbucks VerismoPrice: $299 Price: $199

Expansion

International: -"The Geoffrion Offer"

o GMCR has hired Gerard Geoffrion to oversee international development

o Previously the President ofGMCR's Canadian Unit

United States: -2 New Plants

o Vermont & Virginia

European Recovery

Macroeconomic Trends

Macroeconomic Trends

Macroeconomic Trends

Excess Devaluationo Missed Earnings in 2011o Expectations of high growth were

shatteredo P/E of 11.53; low compared to industry

average of 21.6

P/E Expansion

P/E Expansion

Industry Trends

o Over half of people 25-39 drink one EBB per week

o EBB consumption opposite that of traditional coffee consumption

Valuation

Discounted Cashflow Analysis

Questions?

Appendix: Revenue by Segment