Tuesday, October 16, 2012

Starbucks Corporation (NASDAQ:SBUX) Verismo brewers start selling from Tuesday - Green Mountain Coffee Roasters (NASDAQ:GMCR)

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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