Starbucks Corp. plans to soon unveil the Verismo, a new machine that allows people to make single-cup coffee drinks at home.
The Verismo is the last component of Starbucks’ strategic three-year plan to infiltrate the single-serve market. The Verismo lets customers make espresso drinks such as lattes, as well as brew coffee, and is expected to pit Starbucks against Green Mountain, which presently dominates the US single-cup coffee market.
Starbucks first dipped into the single-cup coffee market in 2009 by selling Via Ready Brew instant coffee to customers not looking to buy a coffee machine. This past November, the coffee giant targeted customers wanting basic home-brewed coffee by selling K-cup packs for Green Mountain Company’s Keurig single-serve machines.
Howard Schultz, Starbucks CEO, asserts that Green Mountain is fully aware of this new development, and says the companies will continue their positive partnership. “This is not about any disappointment with Green Mountain; it’s about controlling our own destiny,” he said in a recent webcast.
Globally, single-cup coffee makes up only 8% of total coffee revenue, but this number is expected to grow. Financial analysts cite this new business venture as a shrewd move that will capitalize on Starbucks’ strengths in the gourmet coffee sector.
The Verismo should be especially profitable in the US and Western Europe, which are the largest single-cup coffee markets worldwide.
This fall the Verismo will be available for purchase at selected Starbucks cafes, online and at upscale specialty shops in North America and a few other international markets.
German company Krueger GmbH & Co KG is presently developing the Verismo as well as accompanying milk and coffee pods. Pricing will be announced closer to launch.
Starbucks Plans to Open Concept Stores in Middle East, Africa and Europe
As part of its general global expansion plan, Starbucks will open 5 to 10 local concept stores in its Europe, Middle East and Africa (EMEA). These cafes will feature unique, locally-inspired products and designs.
Starbucks hopes to boost revenue in this underperforming region, and test out ideas that could be developed in other regions if successful.
The first of the EMEA concept stores opened on March 9 in Amsterdam.
Key Statistics - Global Hot Drinks Market (source: MarketLine)
- The hot drinks market is expected to reach a value of over $81.4 billion worldwide by 2014, representing an approximately 20% increase from 2009.
- Coffee makes up the largest portion of the hot drinks market worldwide, with a share of over 54% of the market’s total value.
- Around 45% of the hot drinks market value worldwide comes from Europe.
- Kraft Foods Inc. is the clear leader in the global hot drink market, generating nearly 10% of market volume.
- The top three players in the global hot drinks market account for almost 23% of the total market volume.