Starbucks to End Exclusivity Deal with Keurig

Starbucks Corp. agreed to end its status as the exclusive super-premium coffee brand for Keurig Green Mountain Inc., in exchange for Keurig expanding its range of Starbucks products.

The companies have an existing five-year agreement to make and sell beverage pods under the coffeehouse chain's Starbucks and Tazo brands for use in Keurig Green Mountain's Keurig single-serve brewing systems. Last May, they extended the deal for a minimum of five years and at the time said the deal "reinforces' Starbucks's position as the exclusive super-premium coffee brand for Keurig's single-serving K-Cups.

However, on Friday, Keurig executive Mark Wood said the amended agreement "creates more favorable business terms for both companies and allows us to build upon our strong relationship."

Starbucks will receive "improved business terms," as part of the changes, including significantly expanded Starbucks K-Cup pack and variety types, the companies said.

Nearly 2 billion Starbucks K-Cup packs shipped from the inception of the companies' relationship through the end of 2013. Starbucks and Keurig Green Mountain first entered into a partnership in March 2011.

The contract change comes about a month after Coca-Cola Co. signed a 10-year partnership to sell its drinks through an at-home beverage system being developed by Keurig Green Mountain. Coke also agreed to acquire a 10% stake in Keurig Green Mountain for about $1.25 billion.

Write to Ben Fox Rubin at [e-mail]

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