Starbucks goes single -is official!

by chee Leng (on coffee makers)
(Singapore)

Since the announcement at the beginning of the year on the "marriage" between Starbucks and GMCR (Green Mountain Coffee Roasters), the world (don't think it is just me right?) has been watching when they would do the first launch.

And now they did. With the first batch of 30 million starbucks k-cups hitting major retail outlets this week, Starbucks is officially into the single serve coffee market.

This is a $3 billion and growing coffee market. Many research companies agree that single serve is the fastest growing coffee segment.

Beginning this week, if you are in US, you would be able to find them at all food, drug, and departmental stores.

The k-cups come in 10 count, 16 count, and 54 counts pack and you get flavors such as Breakfast blend, French Roast, House blend, Sumatra, Pike Place Roast. For Tazo teas, you have the Tazo Awake and Zen.

My $0.02.

This is going to cause some reactions in the coffee market. I personally believe due to the sheer huge distribution network of Starbucks outlets, the impact is going to be big.

Now, single serve has been around for a while, with Nespresso opening many markets. And currently, Nespresso is very strong in Europe and in some Asia market.

Keurig tried to get into Asia market with UCC as their partner but for more than a decade, nothing much was being achieved.

Nespresso took more than a decade and plenty of marketing dollars to grow their current presence in Asia.

So, why do I think Starbucks is going to be different and potentially be a game changer?

They have tasted blood!

This is not their first foray into single serve, they were with Tassimo t-discs for some time. They have personally experienced the sales and trend purchase of coffee drinkers.

And Tassimo while big, is not as extensive as Keurig.

Then, last year, with the launch of their Via, the response was very positive. They are still getting strong sales for their Via.

This again reinforces the mentality of allowing consumers to drink their starbucks in home.

The above two points should lead to Starbucks investing in marketing dollars to push this product. Marketing has always been their strong suit and if they pump in money for this K-cups, I believe the results is goingt to be phenomenal!

The ground is ready

Nespresso have been tilling the ground and educating the folks especially in Asia about single serve coffee.

And with free drinks given out in Nespresso boutiques, majority of coffee drinkers would have either tasted or know about single serve coffee concept.

So, it is not a total new concept (which is harder to sell and possibily a reason why keurig and UCC did not do much for the last decade). and now consumers only need to decide between the different brands.

They might choose Starbucks (see point above).

They are big!

Nespresso have to start a boutique at a time, Starbucks can launched into hundreds of outlets even in a small country such as Singapore.

Even without any above the line marketing, the presence would be keenly felt.

Assuming an average walk in traffic of 1000 people. With 100 stores, 100 000 people daily is going to be exposed to this concept!

So, their network of stores is going to greatly assist them.

The strength of their partner -Keurig

Keurig has one of the most visited website amongst all the coffee companies. It also has one of the strongest memberships (where customers get discount on purchase).

And of course, they have high numbers of users. A mere percentage of all these purchase Starbucks k-cups and recommends them, the impact would be significant.

This is going to further aid Starbucks in terms of awareness mileage and to some extent their topline.

The results would be out in a couple of week for their Christmas sales, I do not think 30 million k-cups should be a problem to them. It would likely be a case of when they sell out!

Do you have any thoughts about the single serve coffee market? Leave your comments below.