Advertising Age reported Starbucks will introduce a single-serve coffeemaker. The device will likely retail for $500,000 each.
Starbucks to Launch Single-Serve Coffeemaker
Verismo to Hit Retail Outlets in Time for Holidays
By Maureen Morrison
Starbucks will be selling a single-cup coffeemaker branded under its name that will make both coffee and espresso-based drinks such as lattes.
The product, dubbed Verismo, will be launched by this year’s holiday season and will be sold at some Starbucks stores, as well as specialty retail locations. Starbucks said that it developed the brewer with Krueger, a Germany-based company, but the chain declined to discuss pricing during a conference call today announcing the launch, nor did it offer marketing details.
The news could be a threat to Green Mountain, with which Starbucks has a relationship. In March 2011, Starbucks inked a deal with Green Mountain Coffee Roasters for the sale, manufacture and distribution of Starbucks and Tazo—its tea brand—in K-Cups, the dominant format in the single-serve market. Green Mountain has the patent on K-Cups, and it owns the Keurig machines for which K-Cups are used.
Starbucks was previously unable to jump into the Keurig market because of its distribution deal with Kraft Foods, which is the exclusive distributor of Tassimo brewers, another single-serve rival. Starbucks in November 2010 moved to dump Kraft as the distributor of its coffee in grocery stores.
Green Mountain last month unveiled its own brewer, Vue, which brews single-serve coffee. K-Cups will not be compatible with Verismo. Starbucks’ CEO Howard Schultz said during the call that the relationship between Starbucks and Green Mountain has not soured, and that the two “can and will coexist,” as Starbucks’ new high-pressure machine will offer espresso-based drinks, whereas Green Mountain’s does not. Green Mountain’s stock tumbled some 15% in after-hours trading following the announcement.
Starbucks has been making strides in the single-serve space for nearly three years. The chain got into the single-serve market with Via, its instant coffee, in 2009. The coffee giant last year struck a deal with Courtesy Products to offer Starbucks single-serve coffee in upscale hotel rooms.
Mr. Schultz also made it a point to say that the at-home coffee machine will not cannibalize Starbucks’ own retail business. And while Starbucks plans to just offer Starbucks-branded coffee for now, “we reserve the right to open the system to others, and we have not made that decision as of today,” said Mr. Schultz.
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