Business, Economics and Jobs

Verismo: Starbucks enters the single-serve coffee machine market


Customers queue for coffee at Starbucks at Dulles International Airport in Dulles, Va., on Aug. 30, 2011.



Starbucks has started selling a single-serve coffee machine designed to compete against home coffee machines like Green Mountain Coffee Inc.’s Keurig and Nestle SA’s Nespresso, the Associated Press reported.

Last year, the market for single-serve coffee machines and pods nearly tripled to $8 billion, the AP reported. "It's rare that you identify a category as large as this that's growing," Starbucks CEO Howard Schultz told the AP.

Starbucks’ machine, called the Verismo, uses a high-pressure system and pods containing coffee and milk to produce single shots of espresso or espresso-based drinks like lattes, the Wall Street Journal reported.

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The standard and large sizes of the Verismo will cost $199 and $399, respectively, while Keurig brewers range from $99 to $189, the AP reported.

The machines will be sold on Starbucks’ website starting this week, then arrive in stores like Williams-Sonoma and Sur La Table in the first week of October and Starbucks cafes by the middle of the month, the Wall Street Journal reported.

Less than a year ago, Starbucks began producing coffee pods for Keurig machines, and the company will continue to make them, according to the AP. Schultz told the AP that Starbucks’ single-serve machine targets customers who want to down espressos and lattes at home, while Keurig customers may just want to brew regular coffee. "They'll coexist and be complementary," Schultz said.

According to Reuters, shares in Green Mountain fell in March when Starbucks first announced its plans to enter the single-serve machine market.

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