Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Scott Van Winkle – Cannacord Adams.
Scott Van Winkle – Cannacord Adams
Michelle, you mentioned some MPD data. Does that MPD data, was it affected by Wal Mart?
Michelle Stacy
Wal Mart does not report to MPD just as they don't report to IRI or Neilson.
Scott Van Winkle – Cannacord Adams
Not like any panel data or anything like that. So that share excludes the 3,000 Wal Marts.
Michelle Stacy
Yes. It does exclude the Wal Mart. It also excludes several other retailers.
Scott Van Winkle – Cannacord Adams
What was Tully's contribution to inventory in the quarter?
Frances Rathke
In terms of inventory for Tully's it was probably $2 million or so. I think we needed to build more K-Cup inventory overall this quarter, so we've been working hard building up, especially Tully's but just in general our inventory of K-Cups.
Inventories were up $31 million. Of that, $20 million is the brewers, the at-home side and about $8 million of it was K-Cup of which Tully's is a piece of that and we also had probably about at $2 million to $3 million build in raw materials.
Scott Van Winkle – Cannacord Adams
So last couple of quarter's inventory days have been falling pretty significantly year over year and this time they were relatively flat. I just assumed that the last couple of quarters you were below the inventory levels you wanted to be?
Frances Rathke
I wouldn't say below. I would say we've been lean or leaner on K-Cups. I think definitely when we bought Tully's for example, we did need to significantly improve their inventory levels. They were I think we bought them it was about $2 million of inventory and we really needed to get that to a $3 million to $4 million number.
And right now, as we do pretty much every year, we really have to ramp the At-home brewer shipments to get ready for the holiday season, so you can see just for this quarter that was a major planned increase.
Scott Van Winkle – Cannacord Adams
As you probably know to the outsiders, a tough company to kind of forecast and model, but I have a question. So if I look at the Keurig revenue sequentially after eliminations, it went from $102 million in Q2 to $90 million which is down about 12% I believe, but if you look at K-Cups, K-Cup shipments were down about a little less than 10% I think sequentially and brewer shipments were down a few percent. It looked like the revenue was down a little more sequentially than the numbers, the brewers and the K-Cups. Should we assume that there's a channel shift towards grocery or specialty revenue collecting more of the K-Cups than Keurig sending them through their wholesale channels? How should I think about that?
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