Starbucks perks up single-cup competition with Verismo debut
Starbucks this week launched its new Verismo single-cup machine for the coffee-buzzed public as a chain known for its cafes continues to expand into new business venues.
Now selling exclusively on Verismo.com, the high-pressure technology uses pods of real milk to make espressos, lattes and regular brewed coffee. In early October, the products will hit many Starbucks retail stores and specialty retailers such as Williams-Sonoma.
Competitors likely aren’t pleased.
The one-cup market is the fastest-growing segment of the coffee market, according to Jeff Hansberry, Starbucks’ president of channel development. The $8-billion industry grew more than 143% in the last year alone in the U.S.
More than a third of brewers sold last year were a single-serving system, Hansberry said in a statement.
Though automatic drip machines are still by far the most popular choice for home coffee drinkers, with 57% of U.S. households owning one, pod and capsule machines are gaining fast, according to research firm NPD Group.
Single-serve brewers have more than tripled in recent years, becoming the primary brewer in 18% of homes from 5% in the past, according to the recent report.
Key to that growth? The Keurig machines sold by Green Mountain Coffee Roasters Inc., which dominate the market. When Starbucks first announced the Verismo in March, Green Mountain’s shares tanked.
Nestle’s Nespresso single-cup machines are also popular, though mostly abroad. The company hopes to build out sales in the U.S. Kraft Foods has its own machine, called the Tassimo.
Starbucks began offering its Via Ready Brew instant coffee in 2009 and launched its K-cup packs for Keurig machines in November.
The Seattle-based coffee giant is gung-ho about its new entry. The Verismo will be sold in a variety of colors, including silver, black, burgundy and champagne, and as both a $199 base model and a $399 version with LED display and temperature control.
“We are entering a highly dynamic and burgeoning market at a premium position, and we will win on quality and technology,” Hansberry said.
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