updated - October 31, 2014 Friday EDT
Starbucks Corp. announced Thursday it will start selling its new single-serve brewer online this week for $199. The machine will be rolled out in its ubiquitous cafes next month.
Starbucks Corp. announced competitive prices for its new Verismo coffee and espresso makers that could pose a threat to brewers from Green Mountain Coffee Roasters Inc. and Nestle SA, the dominant players in the $8 billion single-serve coffee market.
The basic Verismo will sell for $199 while a larger version, with temperature controls and self-cleaning, will be priced at $399. Retail sales will begin in October, the company said late on Wednesday. Although it remains to be seen whether consumers will latch on to the Verismo machine, Jeff Hansberry, president for channel development and emerging brands at Starbucks, told the New York Times that single-cup coffee sales grew by 143% last year.
Green Mountain Coffee Roasters has dominated that massive market in recent years, emerging as the countertop coffee king thanks to 37 patents protecting the omnipresent K-cup coffee pods. Two of those main patents, however, expired last week, leaving GMCR wide open for competition.
Schultz said that by carving out niches in one area, Green Mountain and Nestle left plenty of room for Starbucks.
"Seventy-five percent of existing Starbucks customers do not yet own a single-cup machine, primarily because the two machines (from Nestle and Green Mountain) don't deliver on the expectations that our customers want," Schultz said in an interview.
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