A new veteran single serve coffee player might be emerging...

by chee Leng (on coffee makers)
(Singapore)

That brand is Senseo, used to be jointly owned by Sara Lee and Philips.

With the new agreement, Sara Lee Corp will fully own the Senseo brand and with both of them agreeing to penetrate new markets and new coffee segment.

With 33 million coffee machines in the market, Senseo is a major player in the single serve coffee market. And with the development that has since taken place, the move forward could make the single serve coffee market even more competitive.

The Developments

Sara Lee has a L'Oro Espresso in Europe, selling in France Supermarket that is compatible with Nespresso.

And it was the main income earner for Sara Lee coffee segment in the previous year. But, Sara Lee has faced lawsuits and actions from Nespresso because of that.

Read more at Success of Sara Lee

However, the patent for Nespresso capsules is expiring (if not expired), so moving forward, Nespresso might not be able to launch legal cases against any companies.

My $0.02

This is strictly my thoughts, you can even call it my imaginations, but the lure of the L'OR espresso capsules and the depth of the single serve coffee market might be the reason for Sara Lee to assume full ownership of the brand.

What if's:

It could be a case where Sara Lee wants to pursue compatibility of Senseo with their current L'OR espresso capsules.

Philips might not want to have their name involved in a legal case thus giving full ownership of Senseo back to Sara Lee.

But, if Sara Lee would to take this route, they have a ready market and is huge in Europe.

Senseo is currently one of the most economical priced single serve coffee machine. And if they are compatible with the L'OR espresso, Sara Lee might effectively mitigate any upcoming lawsuits of using Senseo.

In fact, they could expand even further into F&B with machines that are compatible both with e.s.e coffee pods, their current coffee pads and the L'or espresso capsules.

Office market would be another big segment that Sara Lee could be looking at.

Moving in with current coffee machine might not make sense as the quality of capsules are better and people are willing to pay for that.

Thus, if they have a machine that is able to serve current L'Or which is a better quality coffee and is already in production(cheaper), the competitive edge is much higher.

This would also be the selling point for their 33 million machines. If Sara Lee allows a trade up, they could effectively sell 33 million machines and increase the sales of L'OR capsules by thousands folds.

Of course, until this point, this is strictly my imaginations. But, let's remember this article and let's see if Sara Lee CoffeeCo is taking some of the steps which I have imagined...