Friday, March 25, 2011

Starbucks to Offer Single Serve Brewing to Compete with Keurig

Starbucks has always been a progressive company & they're always looking for ways to even further dominate the market.

The past few years has seen a rise in the market of single serving hot beverage machines and now Starbucks is looking to capitalize on that market. When we opened the new dental office 3 years ago, one of the amenities we made sure to provide for our patients was a Keurig system so that they could have a cup of coffee of their choice or other types of hot drinks such as hot tea or hot chocolate.

The Keurig systems have been very popular in homes, businesses, and also in the hotel industry where I would say that about 50% of the hotels I've stayed in lately have a Keurig system in the room.

Starbucks is now looking at that market by bringing their own single serving device into the marketplace as well as providing drinks in the K-Cup single serving format.

Here is a portion of the press release from the shareholders meeting that took place earlier in the week.

SEATTLE, March 23, 2011 - Celebrating 40 years of history and reaffirming solid growth plans for the future, Starbucks Corporation (NASDAQ:SBUX) today hosted its 20th annual shareholders’ meeting, with more than 2,000 in attendance. Starbucks leadership team, led by Howard Schultz, chairman, president and ceo, honored the company’s 40-year history of providing exceptional coffee, world-class customer experience, commitment to its partners (employees) and dedication to operating as a responsible corporate citizen. The management team also reaffirmed growth plans for a new, evolved business. The focus remains on building a truly global consumer company by harnessing a powerful portfolio of brands with a unique business model, combining a global retail footprint with a significant Consumer Products (CPG) business, and leveraging direct customer engagement that drives growth across all channels globally.

“Over our 40-year history, we have built the Starbucks brand with a goal of staying true to our values and our guiding principles with a deep sense of humanity,” stated Howard Schultz. “Going forward, we will continue to focus on what made us a different kind of company, one that balances profitability and social conscience while providing exceptional shareholder value.”

Extending the Brand beyond Our Retail Stores

At the meeting, Starbucks reiterated its commitment to delivering the world’s best coffee in every format and through every channel. The company highlighted the successful launch of its Starbucks VIA® Ready Brew platform and its recent announcements of strategic relationships with Green Mountain Coffee Roasters, Inc. (GMCR) and Courtesy Products.

“We are particularly excited about the progress we are making in the premium single-cup segment,” commented Jeff Hansberry, president, Starbucks Global Consumer Products and Foodservice. “The single-cup segment is already a $1.6 billion segment that represents a significant growth engine for the entire U.S. coffee category. We believe that over time we can generate K-Cup® portion pack system sales in excess of $1 billion across all channels.”

Starbucks also provided additional details around its previously announced relationship with Courtesy Products, the nation’s leading provider of in-room coffee service to hotels. Under the relationship, Starbucks and Courtesy will bring Starbucks® coffee to 500,000 luxury and premium hotel rooms in the U.S., as well as offer an on-demand, single-cup brewing system featuring Starbucks® and Seattle’s Best Coffee® ground coffee and Tazo® teas for sale in multiple channels exclusively through the Starbucks Global Consumer Products group. “We are proud to be working with Courtesy to provide great Starbucks coffee to hotel guests, and a value-oriented single-cup brewed coffee system to consumers across the U.S.,” added Hansberry.

The company also announced a 10-year extension to its exclusive strategic agreement with Autogrill’s HMSHost, one of Starbucks first licensee partners. Under this agreement, HMSHost will continue to build and operate Starbucks locations in airports and motorway travel plazas across the U.S.

“For nearly 20 years, Starbucks and HMSHost have successfully brought the Starbucks Experience to millions of travelers who are looking for an exceptional cup of coffee,” stated Cliff Burrows, president, Starbucks Coffee U.S. “We are very excited to extend our relationship with HMSHost for another 10 years.”

Currently, Autogrill’s HMSHost operates more than 360 Starbucks locations in airports, on motorways and in railway stations in North America and Europe. The continuance of these strategic relationships will foster further growth opportunities as well as the development of innovative store concepts to serve the global traveler.

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