Starbucks to begin selling single-serving coffee machines

Starbucks says its planning to begin selling a single-cup coffee brewer to compete with rivals such as Green Mountain Coffee, the maker of Keurig coffeemakers, and the Switzerland-based, Nespresso group.

The world's largest retailer of coffee said the new machine, "The Verismo," will make espresso-based drinks as well as brewed coffee, and will advertise and sell the machine and single-cup pods by partnering with Krueger, a German coffee company.

According to Bloomberg, single-portion coffee servings, or pods, represent only 8 per cent of total worldwide coffee sales but that percentage is rising.

"The premium single-cup segment is the fastest-growing business within the global coffee industry," Starbucks CEO Howard Schultz said as quoted by CNN.

Starbucks' other rival in the field is the Swiss expresso machine maker, Nespresso, which dominates the luxury coffee market.

The Starbucks machine will compete directly with the maker of the high-powered machines that differ from Keurig in that they can make expresso coffee – Starbucks machine will do both.

"We have long believed that the biggest prize within the segment is a high-pressure system that would give us the opportunity to deliver Starbucks-quality espresso beverages at home and at work for customers who desire the Starbucks espresso experience outside of our stores," said Schultz.

Reuters said that the coffeemaker will be sold online at select Starbucks shops and at specialty retailers in the United States, Canada and some other international markets, but the pricing of the machine was not released.

On news of Starbucks' entry into the market, shares of Green Mountain sank as much as 24 per cent but rose on the announcement that Starbucks would still supply Green Mountain with Starbucks K-cup coffee pods, said the Financial Times

Starbucks shares rose 3 percent to $51.87 on the news.

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