On Tuesday, Starbucks Corporation (NASDAQ:SBUX) stores
in the United States will start selling the single-serve Verismo coffee and
espresso brewers that will enable die-hard coffee-drinkers make their own brew
at home.
With this the company will come in direct competition
with makers of such brewers, Green Mountain Coffee Roasters and Nestle that
have dominated the market so far.
Green Mountain Coffee Roasters Inc.(NASDAQ:GMCR) is
the colossus in this segment having more than 75 percent market share in the
U.S. with its single-serve Keurig coffee machines.
Nestle has a global market share of 35 percent with
its Nespresso that services up single-serve espresso coffee. It is largely
popular in Europe.
When Starbucks had first announced the launch of its
Verismo machines in March, shares in Green Mountain had taken a tumble.
The new single serve machines from the ubiquitous
coffee chain sell in two versions for $199 or $399, depending on the size and
will be stocked at about 4,300 stores of the company starting on Wednesday, the
company said.
However it is already available online and through
other U.S. retailers.
The pricing of the machines are similar to what the
competition has on offer.
Green Mountain's new Keurig Vue coffee brewer sells
for around $250, while Nespresso machines can cost anywhere from $130 to $700.
Starbucks and Green Mountain have a partnership to
provide coffee-filled K-cups for use in Green Mountain's Keurig machines.
Starbucks has 15 percent share of the K-cup market.
Shares in Starbucks rose more than 2.70 percent to $48.96
at close of trading on Monday.
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