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Starbucks Corp.'s (SBUX) single-serve coffee agreement with Green Mountain Coffee Roasters Inc. (GMCR) doesn't rule out the possibility that the coffee giant will one-day debut its own single-cup brewer.

Green Mountain announced its agreement Thursday to sell Starbucks coffee and Tazo tea brands for its Keurig Single-Cup brewing system starting this fall.

"This is just one piece of the bigger single-serve puzzle for Starbucks," a spokesman said, though shares of Green Mountain soared 36% this morning and Starbucks' stock saw a 8% bump in recent trading.

The agreement is a multi-year agreement, but it has a definitive end date, unlike Starbucks' previous single-serve coffee distribution deal with Kraft Foods (KFT), which ended in messy court battles.

In about 18 months, several of Green Mountain's patents on the K-cup technology will expire, presenting the possibility that any manufacturer could create and sell K-cups, without signing a contract with Green Mountain.

Starbucks' Chief Executive Howard Schultz said in a memo last month that while Green Mountain is the clear leader in the single-serve industry now, there are "no demonstrated long-term winners related to any format, geography or machine," and that "patents alone do not determine market winners."

In the memo, Schultz also indicated that Starbucks foresees the industry leader in the U.S. as one with an "open system," which means the technology to produce the singe-serve cups is available to any company; a potential situation for Green Mountain when, and if, its patents expire.

The agreement also seems to favor Starbucks in that it's one-sided in its exclusivity.

Green Mountain has agreed to make Starbucks its only "super-premium" brand for Keurig, while Starbucks is free to sign single-serve distribution deals with whomever it wants. And it already has, with Courtesy Products hotels for up to 500,000 hotel rooms.

But that doesn't mean Green Mountain won't keep signing deals with less-pricey coffee brands.

Two weeks ago, Green Mountain agreed to sell coffee from Starbucks' rival, Dunkin' Donuts and already has a licensing agreement with JM Smucker Co.'s (SJM) Folgers coffee brand.

Green Mountain sold 2.9 billion Keurig cup portion packs in 2010, up 75% year-over-year. With this new agreement, it's "poised to drive further adoption" of Keurig brewers, R.W. Baird analyst David Tarantino says in a note.

Starbucks' partnership with Green Mountain strengthens its presence in the nearly $2 billion single-cup coffee market, which the coffee giant entered last year with the launch of VIA Ready Brew.

It's a reasonable assumption that Starbucks could receive gross profit of 5 cents or more per Starbucks brand Keurig cup sold, Tarantino says.

Over 25% of current Keurig users would be "very likely" to use Starbucks as their premium brand of single-serve, says Morgan Stanley analyst John Glass in a note. "This move leaves an upside opportunity for Starbucks to expand the single-serve market further," he says.

Starbucks' grand entry into the single-serve coffee market is another step along the way to broaden its horizons in the consumer packaged-goods market. Earlier this week, Starbucks unveiled its new logo, which eliminates the words "Starbucks Coffee" on new coffee cups and sleeves. It also launched new food products for cafes this week and is testing wine bars at a few stores on the West Coast.

The coffee giant wasted no time making its "bold entry" into the space, considering its distribution deal with Kraft just expired March 1 after 12 years together. Kraft fought, requesting Starbucks pay damages for the severed relationship, a cost analysts at point estimated at $1 billion.

Kraft, now left without its top premium single serve brand, said in a statement it's committed to competing in all coffee segments, including premium and on-demand. "Our future plans are as robust as our coffee products, and we are focused on making Tassimo as successful as possible," the statement said.

Another company the deal doesn't bode well for is rival Peet's Coffee & Tea Inc. (PEET). Janney Capital Markets said the opportunity for Peet's to now team up with Green Mountain for Keurig licensing is now all but gone. Shares of Peet's fell 13% to $42.02. Through Wednesday's close, the stock had risen 20% the past year.

Starbucks' agreement with Green Mountain provides for the manufacturing, marketing and selling of Starbucks and Tazo-branded K-Cup portion packs throughout the U.S. and Canada.

Starbucks brand Keurig single-cup portions and Keurig brewers are expected to be sold in Starbucks stores and through Green Mountain's and Starbucks' websites beginning in 2012.

-By Corrie Driebusch, Dow Jones Newswires; 212-416-2143; corrie.driebusch@dowjones.com

-Melodie Warner contributed to this article.

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