WATERBURY, Vt., Tue Nov 20, 2012 – Green Mountain Coffee Roasters Inc. named Coca-Cola Co. executive Brian Kelley as CEO, betting on a product specialist to see it through intensifying competition that has eroded its share of the single-cup coffee market.
Kelley replaces Lawrence Blanford, who over five years grew Green Mountain from a little-known Vermont-based coffee maker to one of the fastest-growing U.S. companies, but whose reputation has been diminished recently by sales misses and questions about the company’s business model and accounting practices.
Green Mountain’s market value has increased five-fold since Blanford, 58, took over from founder Robert Stiller in 2007, but the stock is down more than 40 percent this year.
The company’s shares rose as much as 11 percent to $30.23 in trading on the Nasdaq on Tuesday.
Kelley, 51, brings a wealth of experience to Green Mountain, especially in areas where the company has had problems, such as product and supply chain management, analysts said.
“We view the announcement favorably as Kelley’s operations experience at Coke is an area of considerable weakness at Green Mountain,” Stifel Nicolaus analyst Mark Astrachan said in a note.
Green Mountain’s growth prospects have moderated since some of the company’s patents related to the design of its K-Cup refills used in its Keurig brewer expired in September, paving the way for a wave of new competition from the likes of Starbucks Inc. and Wal-Mart Inc.
The company, which short-seller David Einhorn last year accused of inflating sales figures, is also the target of a Securities and Exchange Commission inquiry into accounting and revenue-recognition