Starbucks Climbs the Green Mountain

Perhaps the biggest news in coffee was unveiled yesterday and, of course, I had to say something about it. For a couple of years now, Keurig (owned by Green Mountain Coffee Roasters) has been slowly introducing us to the idea of single-serve coffee with its now famed K-Cups. Many popular roasters, including Caribou Coffee and Gloria Jean's, have gotten on board and offered up their coffees to the K-Cup format. One stubborn roaster, however, has up until now resisted that trend. That roaster is none other than Starbucks.

Undoubtedly, Starbucks has been aggressively expanding it's portfolio over the past few years. In the last decade, it has established a heavy presence in grocery stores with it's ready-to-drink Frappuccinos and Double Shots, created a line of ice cream for the same venues, and dramatically improved the food offerings at its retail outlets with products such as oatmeal and breakfast sandwich. Just two years ago, Starbucks introduced its wildly successful Via ready-brew line, changing the public perception of instant coffee. Starbucks, for better or for worse, has become more and more mainstream-seeking to appeal to a broader and broader customer base.

The one niche coffee market Starbucks has struggled to enter is the single-cup market. Starbucks tried to get in with the a line-up in Kraft Foods' Tassimo T-discs, but it just never caught on like Keurig. At the beginning of the month, Starbucks ended a 13 year agreement with Kraft Foods, leaving them a free-agent in the single-cup niche. What was Howard Schultz (Starbucks CEO) going to do? Would he try to introduce Starbucks' own proprietary Single-cup brewing system or would he swallow his pride and get on board with Keurig like everyone else?

Yesterday, the answer became clear. There will now be a Starbucks K-Cup. This truly could be revolutionary to the industry. In all likelihood, Starbucks, Green Mountain, and consumers alike will all be winners from this agreement. Perhaps it is even enough to get this old laggard to get himself a Keurig for the moments when there is no time for a press.

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