Single-Serving Coffee Growing in Popularity – Starbucks Poised for Growth in Sector
United States (March 10, 2011) – Starbucks will be entering the single serve coffee market which delivers premium coffee (specialty coffee) one cup at a time, and we all know that when Starbucks puts its mind to something it goes after it in a big way.
However that idea has now been discounted and analysts expect Starbucks to develop its own consumer products, perhaps after acquiring one or more other companies other than Green Mountain.
Starbucks Already Has Some Single Serve Products
To some degree Starbucks is already involved in the single serve coffee market with their Via instant coffee products sold at all Starbucks, newly introduced in China, and also available at about 30,000 locations outside of Starbucks stores.
Via has already generated more than $200 million and the technology used to produce it will be used in developing other products said to be coming soon. Starbucks will also be opening stores in India during the next year.
In an internal memo Starbucks CEO said the single serve segment of the coffee industry is “poised for a sea change of innovation” and that Starbucks will “continue to reinvent this category.” The memo complemented Green Mountain for bringing single-serve brewer technology to the United States market.
Starbucks recently announced a partnership with Courtesy Products (a leader in hotel room amenities) providing access to up to a half-million U.S. hotel rooms which utilize the Courtesy CV1 in-room and on-demand single cup brewed coffee system. Starbucks also announced that in fall of 2011 it will launch its CV1 premium coffees.
Starbucks now seems well-poised for a huge market-moving strategy to gain a large foothold in the single serve coffee market. While Green Mountain dominates the U.S. it has not yet gained a significant market share internationally, which Starbucks could certainly attempt with its own international presence already well established.
Starbucks Entering Single-Cup Coffee Market in 2011
In Europe the single serve coffee model is well-accepted (e.g., about forty percent of homes have a single cup brewing machine) and much more popular than in the United States where a single cup machine is found in just six percent of households, and this is growing rapidly due to Green Mountain and some other competitors in the market.
Another statistic cited by Schultz, about eighty percent of Starbucks customers do not have a single-serve machine in their house. Starbucks is now in about 55 countries around the world and served 50 million customers last year in its cafes and millions more served through other retail and consumer outlets.
Schulz confirmed that the aspirations of Starbucks in the single serve market are “very bold” and noted that this is the quickest growing segment of the coffee industry now worth about $4 billion overall and still in the early stages of development.
Future of the Single-Serving Coffee Market Uncertain – Starbucks Poised for Growth in 2011
Though Green Mountain is the industry leader in the U.S. currently, the future remains uncertain since some of their Keurig Coffee K-Cups patents expiring next year.
Schultz noted that there are currently numerous single-serve brewing systems and solutions, “and even more in late-stage development.”
Starbucks plans on using its ability to provide sampling and trials to grow single-serve awareness through its stores, and then migrate products on a global scale through supermarkets, drug stores, mass marketing, clubs and online channels.
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