Return to story
Hannah So demonstrates the Verismo, Starbucks' entry into the single-serve coffee market. It debuts this week.
AP Food Industry Writer
NEW YORK--Starbucks Corp. is about to turn up the heat on the single-serve coffee market, and someone might get burned.
The Seattle-based company says it will start selling its new single-serve brewer online this week for $199. It plans to start selling the machine in its ubiquitous cafes next month.
The arrival of the Verismo, which was announced earlier this year, comes amid intensifying competition in the rapidly growing market for single-serve brewers and the coffee pods they use.
The market was pioneered by Green Mountain Coffee Roasters Inc., which enjoyed soaring sales after its acquisition of the Keurig-brand machine in 2006. But this month, the company's patent on its K-cup technology expired, which prompted supermarkets to roll out store-brand versions of coffee pods that can be used in Keurig machines.
Starbucks' decision to sell its own brewer comes just about a year after it struck a deal with Green Mountain to make coffee pods for Keurig machines.
In an interview with The Associated Press, Starbucks' CEO Howard Schultz said that the relationship with Green Mountain will continue and that Starbucks will still sell its pods for Keurig machines in cafes. He said that "the Keurig machine is a fantastic choice" for customers who want only brewed coffee.
The Verismo, however, uses a high-pressure system that can make lattes and other espresso-based drinks, as well as brewed coffee. Essentially, Starbucks has said its machine targets a different type of customer.
When Starbucks first announced its plans to roll out the Verismo in March, shares of Green Mountain plunged. Green Mountain's stock has lost 51 percent of its value since then. Starbucks' stock is little changed in the same period.
Green Mountain, which is based in Waterbury, Vt., has also been targeted by a Securities and Exchange Commission inquiry into its accounting methods.