Starbucks to Compete with Nestle and Green Mountain

Starbucks has announced the company plans to sell a single-serve coffer maker. The name of the machine is the Verismo™ System, and the coffee giant indicates consumers can use this machine to recreate the Starbucks experience.

With this new product, consumers can make single-cup servings of Starbucks® Caffé Lattes, espresso, and brewed coffee from the comforts of home.

“Starbucks is passionate about coffee and passionate about innovation,” says Jeff Hansberry, Starbucks president, Channel Development in a company press release  . “We are entering a highly dynamic and burgeoning market at a premium position, and we will win on quality and technology.”

The machine has made its debut this week, and is available on Verismo.com, however, the coffeemaker won’t be available in brick and mortar stores for another few weeks. The company said in October it plans to sell the product in participating Starbucks stores and “select high-end specialty” stores, although the company did not share which stores the coffeemaker would be available at for purchase.

It comes in a variety of colors including black, silver, burgundy and champagne. There will be two different models, the higher-end version will have additional features. The coffeemaker is priced between $199 – $399, depending on which version is purchased.

“For more than 41 years, we have been committed to bringing exceptional coffee and espresso beverages to our customers,” says Howard Schultz, Starbucks chairman, president and CEO, in a press release  . “We are applying that passion and commitment, once again, to the fastest growing segment of the coffee market, the multi-billion-dollar premium single cup segment, with the introduction of a breakthrough at-home Starbucks® coffee experience that is second to none. What we are bringing to market today has been impossible until now.”

With this debut, Starbucks is creating competition in the market for Green Mountain Coffee Roasters Inc and Nestle SA, two companies that currently dominate the single-cup coffee market. According to Reuters (courtesy of Chicago Tribune  ), Green Mountain’s Keurig machine maintains a healthy 75 percent of the U.S. market, while Nestle SA enjoys a 35 percent global market share. How the new Starbucks machine will impact this market remains to be seen.

Over the past two years, Starbucks has made significant strides to stretch beyond selling its popular coffees. To date the company has opened a juice bar, specialty tea store, and is selling wine and beer in some select markets. Another recent announcement shared by the coffee giant is the company is piloting   recycling old coffee grinds and stale muffins into other products, such as laundry detergent.