In looking for a used car recently, I test drove a ’98 Mercedes that had two very anachronistic features.
It came with an actual car phone attached to a walkie-talkie type thing that Mash’s Radar O’Reilly might have used. And it had no cup holders. Now, even in the dark ages of the 1990s, most cars had cup holders.
Meanwhile, Keurig Green Mountain shareholders will vote next Wednesday to sell the Vermont coffee company to European holding company JAB.
It’s been known for a while that Keurig would be sold, but when and to whom wasn’t clear. Like many, I thought it would be Coca Cola – since Coke already holds a big stake in the company and it’s the kind of goliath that could afford it. The fact that Coke didn’t buy Keurig is probably telling.
Starbucks was another possibility. And the fact that JAB and Starbucks are competitors in the global premium coffee arena also probably tells us something.
If the JAB sale goes through as expected, shareholders will earn a windfall. JAB is paying $13.9 billion for the Waterbury-based beverage company. On a per share basis, this was a 78 percent premium on the stock price when the deal was announced shortly before Christmas.
For 16 months Keurig’s stock price has roller-coasted from more than $150 a share down to 40. JAB will pay 92. Most investors will be happy with that, including the many long-serving Green Mountain Coffee employees here in Vermont who’ve held on to their shares through thick and thin.
It seems clear that JAB isn’t buying Keurig for its technology or its new Keurig Kold service. Most likely, it’s buying it for its important place in the American coffee market and for its potential in the European coffee market.
K-Cups barely have a beachhead over there. JAB already has a controlling interest in PEET’s and Caribou coffees over here. So this purchase suggests it wants to compete with, yes, Starbucks and, I believe, expand in Europe.
Think of that old Mercedes. Newer versions have cup holders. And while Europeans still prefer to sit down for coffee at a zinc bistro table, the pressure to be more productive is changing the world of business everywhere.
Chances are that during the workweek European workers will have to grab a mug and jump into their E Class to make that meeting at 9, just like we do.
And just maybe they’ll have to wait for the weekend to linger in a café over their cups of cappuccino.
