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Starbucks Introduces the Verismo Single-Cup Machine

Starbucks Introduces the Verismo Single-Cup Machine

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The Verismo could threaten sales of Green Mountain's Keurig machines

The new Verismo single-cup machine is now available on the Starbucks website.

Starbucks fans who want the convenience of a Starbucks latte, cappuccino, or regular coffee at home have been anxiously waiting for the company to introduce its own single-cup coffee machine. And it's finally here: the Verismo Coffee Machine is rolling out online this week, threatening the single-cup market's big players.

The Associated Press reports that the Verismo, which is priced at $199, will be sold online this week and in stores later this month. What makes the Verismo different from the Keurig or other single-cup machines, said CEO Howard Schultz, is that it makes the premium Starbucks espresso drinks, like the latte, in addition to regular coffee. So Starbucks is getting in on the single-cup game in order to get Starbucks drinkers to purchase a single-cup machine. "Seventy-five percent of existing Starbucks customers do not yet own a single-cup machine, primarily because the two machines (from Nestlé and Green Mountain) don't deliver on the expectations that our customers want," he said to Reuters.

However, he said to the AP, Starbucks won't try to impede on Keurig's turf; Starbucks will still make K-Cups, or the coffee pods, for Keurig. But Green Mountain's stocks took a tumble when the Verismo was first announced in March, and they haven't fully recovered. The coffee pods make up about 8 percent of worldwide coffee sales, but it seems all coffee companies — Starbucks included — think the market will take off. You can get in line for the Verismo at retailers like Macy's and Williams-Sonoma in early October.

Starbucks's Verismo Now in Stores

Coffee giant Starbucks Corporation (SBUX) recently announced that its premium single cup domestic coffee machine, Verismo, will now be available at more than 65% of its retail stores. The Verismo system is a premium machine that will allow customers to prepare Starbucks-quality espresso and coffee beverages at home, using milk pods also developed by Starbucks. Verismo was previously available through and at Specialty Retailers since September.

The Verismo single cup coffee machine is a major step by the company to grab a share of the premium single-cup segment, which is the fastest growing market in the coffee industry. Starbucks already has a presence in the premium single serve market with its Starbucks VIA Ready Brew instant coffee and Starbucks K-Cup packs.

Starbucks also has a partnership with Green Mountain Coffee Roasters (GMCR), whereby it sells the K-Cup packs to Green Mountain to run on the latter’s Keurig Brewers. Earlier this year, Starbucks expanded its partnership with Green Mountain, by virtue of which, Starbucks will manufacture and sell Starbucks-branded Vue packs that can be used on Green Mountain’s newly-introduced Keurig Vue single-cup machines starting this fall.

The Verismo machine is expected to pose strong competition to Green Mountain’s Keurig Brewers, though Green Mountain’s management had ruled out any competition between the high-pressure Verismo machine and the low-pressure Keurig machine. However, shares of Green Mountain had witnessed a sharp decline after the Verismo launch was announced. Starbucks will continue to supply K-Cup packs to Green Mountain.

The premium coffee segment now accounts for over 50% of total coffee sold in the US grocery, drug, and mass channels. Starbucks owns 28.2% share of premium coffee in these channels. In the premium segment, premium single cup makes up 20% of the market. Starbucks, through the VIA Ready Brew and Starbucks K-Cups, commands 22% share of the premium single cup market, which is a huge improvement from zero presence in this segment just 2-3 years back. The premium single-serve category is expected to become an $8 billion market globally. The Verismo system and the expanded partnership with Keurig on the Vue platform are expected to help Starbucks capture further share of the premium single cup coffee segment.

We currently have a Neutral recommendation on Starbucks. The stock carries a Zacks #3 Rank (a short-term ‘Hold’ rating).

Starbucks to sell single-cup home-brew machine

The Starbucks Verismo machine can make both espresso beverages and brewed coffee.

NEW YORK (CNNMoney) -- Starbucks unveiled its own single-cup home-brewing machine Thursday, sending shares of competitor Green Mountain Coffee Roasters reeling in after-hours trading.

Starbucks will begin selling its "Verismo" machine this fall, the company said in a statement, which did not offer pricing information.

Green Mountain currently dominates the single-serve market with its popular Keurig, or K-Cup, machines.

Last year, the two companies announced a deal allowing Green Mountain to produce K-Cup versions of Starbucks coffees and Tazo teas. With the Verismo, however, Starbucks is moving into single-cup brewing for itself, partnering with Germany-based Krueger GmbH & Co. KG to produce the machine.

"The premium single-cup segment is the fastest-growing business within the global coffee industry," Starbucks CEO Howard Schultz said in a statement.

"We have long believed that the biggest prize within the segment is a high-pressure system that would give us the opportunity to deliver Starbucks-quality espresso beverages at home and at work for customers who desire the Starbucks espresso experience outside of our stores."

Shares of Green Mountain ( GMCR ) were down more than 20% late Thursday, dipping below $49 after closing at $62.40. Starbucks ( SBUX , Fortune 500) was up more than 3% after-hours, after closing at an all-time high of $50.37.

Starbucks gave no indication that it would dissolve the existing agreement with Green Mountain. Starbucks said that it shipped over 100 million K-Cup packs in the eight weeks following last year's launch, and that the Starbucks K-Cup business "continues to accelerate."

"This is complementary to our partnership with Green Mountain, and they can and they will co-exist," Schultz said in a call with analysts.

Schultz noted that the K-Cup brews coffee in a low-pressure machine, while the Verismo will also offer espresso-based drinks.

Representatives of Green Mountain did not immediately respond to a request for comment Thursday.

Verismo brewers – Starbucks coffee makers for single-serve coffee lovers.

The Starbucks Verismo single-serve brewer.

As you have doubtless noticed, coffee lovers are turning more and more to single-serve coffee makers.

I get it. I have one of my own, although my principal coffee maker is still a traditional drip brewer.

I use the single-serve machine for a couple of reasons.

First, when the carafe from my drip brewer is empty, I sometimes crave an extra cup of coffee. Instead of making another big brew, I make a single cup. Less waste.

There are a couple of other reasons I like the Verismo.

First, I like the design. It’s clean, slim and elegant. It also comes in a variety of colors, so you can take your pick according to your kitchen décor. The Verismo doesn’t look like just another clunky appliance. It will actually enhance the appearance of your countertop.

Next, it has a very small footprint. Some single-serve brewers I could mention are very wide. They take up way too much counter space. I don’t know about you, but I don’t have a huge kitchen and I appreciate a brewer that both takes up as little space as possible, and looks good as well.

With the Verismo, don't expect the same variety of coffee choices you have when buying Starbucks whole beans in the bag.

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ARE Starbucks Verismo®* pods discontinued?

According to Starbucks®, Starbucks' Verismo® pods were officially discontinued as of December 31, 2020. However, rest assured that all K-fee® and Mr & Mrs Mill coffee and espresso pods are Verismo®* machine compatible. Find your flavor >>

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Where can I buy the Starbucks® Verismo®* machine?

While no longer sold at Starbucks®, K-fee® machines can now be purchased online here as well as well at Amazon and Bed, Bath and Beyond.

Can I use K-fee mr & Mrs Mill coffee pods in a Verismo®* machine?

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From Starbucks®* to Your Favorite Retailers.

Coffee lovers were first introduced to the K-fee® brand through a partnership with Starbucks*, when the Twins II & Latte hit stores as the Starbucks Verismo®*. The high-quality machine allowed fans to brew the famous coffee shop flavors right at home. With an expansion to other retailers, K-fee’s swiss-engineered machines can now be found online and in select Bed, Bath and Beyond stores. The Twins II is the Verismo®* compatible machine, but K-fee® also offers a larger, family friendly option, called the Grande and a stand-alone, barista-quality frother that crafts the perfect crema, called the Lattaero. No matter your brew style, there’s a K-fee® coffee maker for you.

What's in Store for the Starbucks Verismo Single-Serve Coffee Maker?

Starbucks (NASDAQ:SBUX) has struggled to gain a toehold in the United States single-serve coffee maker market with its Verismo brewer, but the company remains committed to selling the system. The coffee chain does not release sales figures for Verismo, but spokesperson Erin Shane told The Motley Fool via email that "the Verismo system continues to deliver on our sales expectations."

That may be true, but the company is well behind Keurig Green Mountain (NASDAQ:GMCR.DL) in the United States, and Nestle (OTC:NSRGY) globally, though that does not seem to deter Starbucks. "Starbucks is committed to strengthening its global leadership position in the highly competitive nearly $8 billion . premium single-cup coffee category," Shane wrote. "We will continue to invest in the single-serve business, which we believe will be an important driver of our long-term at home coffee growth."

Going forward, the question for the coffee giant is whether it makes sense to continue to pump resources into a platform that has yet to find a large audience. It's not about whether the company can afford to keep pushing Verismo, but whether it's worth the shelf space and resource cost when Starbucks is succeeding with other single-cup offerings.

A display of Verismo products in a Starbucks store. Source: Author.

How dominant is Keurig in the U.S.?
Starbucks is a player in the single-serve market, but that's due to its partnership with Keurig, for which it makes Starbucks-branded K-Cups. It's not due to sales of the Verismo. K-Cups are a huge part of the single-cup market, especially in the United States, where Mintel reports that, in 2013, U.S. consumers bought $3.1 billion worth of coffee pods, according to The Seattle Times. That number is clearly a low estimate just based on Keurig's reported sales, but it shows you how clearly the company dominates the market.

Keurig had $4.25 billion in total sales in 2013, with $3.7 billion of that coming from the U.S., and nearly all the rest from Canada. The company reported an overall $3.13 billion in portion-pack sales, but does not break that down between the U.S. and Canada. If you assume that the ratios are roughly the same between the countries, the company controls roughly $2.7 billion of that estimated $3.1 billion pod market in the U.S.

Globally, it's Nestle's Nespresso that's the leader. Looking at the success of Keurig and Nestle in this area shows how hard it is to establish an alternative brewer once there's a clear market leader. With Verismo, Starbucks' only chance is that its customers would want a Starbucks experience at home. They might, but so far, it's clear that many of them believe they can get that with a branded K-Cup, or they're willing to go in another direction, because Keurig has made it so easy.

It's hard to knock off the incumbent
K-Cups are sold in every supermarket chain, in Dunkin' Brands stores, as well as in Krispy Kreme locations. It's even sold in Starbucks. In fact, in the dozens of Starbucks I have visited in Massachusetts, Connecticut, and Washington state during the last few months, I have never seen a Starbucks that gave more shelf space to Verismo than it did to its K-Cup offering. Some did not have the brewer or its pods at all. That's certainly anecdotal, but it's a lot easier to sell pods for an established brewer than it is to get people to shell out $119 for a new one -- and that's down from $199 when the system launched a couple of years ago.

Keurig stays dominant because its brewers are good enough that it's hard to justify replacing a working K-Cup machine with a Verismo, even if the Starbucks machine is superior -- which I think it is. That's the same problem Keurig has bumped into trying to launch its Vue system and its Keurig 2.0 machines.

Will Starbucks really push forward?
Continuing to sell Verismo when it has very little market share makes little sense except that Starbucks can afford to play a very long game. And the company intends to do just that. "In the coming year, we plan to expand the distribution of the Verismo 600 to a wider selection of specialty retailers and Starbucks stores, and we also have continued machine innovation in the pipeline," Shane wrote.

That may seem foolish, but Starbucks' only real opportunity to sell a Verismo is when someone needs to replace a worn-out Keurig brewer. If the company can slowly -- even very slowly -- gain market share, it may be worth it, as Verismo pod sales don't require the company to send Keurig a piece of the action.

It's an uphill battle, though. If customers are satisfied with their brewers, then they'll be inclined to stick with the brand they owned previously. Still, Starbucks has a loyal audience and a massive retail platform that it can, perhaps, ultimately win over.

The single-serve coffee market affected by Starbucks Verismo

The competition in the growing single-serve coffee market is intensifying, though Starbucks Corp. decided to introduced its new Verismo machine to the market.

The single-serve coffee market, which was pioneered by Green Mountain Coffee Rosters Inc., sees the growing competition among companies as Green Mountain Coffee Roasters Inc.’s patent on its K-cup technology expired. Supermarkets and other companies were encouraged by the expiration of the patent so they introduced their versions of coffee pods that could be used in Keurig machines, which had been acquired by Green Mountain Coffee Roasters Inc. in 2006.

The most important players in the single-serve coffee market are Green Mountain Coffee Rosters Inc. and Nestle SA. According to compiled data, Green Mountain’s Keurig one-cup coffee brewers control more than three-quarters of the U.S. market. In addition, Nestle SA Nespresso espresso maker holds a roughly 35 percent share globally, but mainly its share is concentrated in Europe. Nespresso costs from $130 to $700, while Green Mountain’s new Keurig Vue coffee machine is sold for approximately $250.

Green Mountain Coffee Rosters Inc. is a Starbucks Corp.’s partner and it had been affected by the first announcement of Starbucks Corp.’s plans for introducing Verismo machine in March. Green Mountain’s shares dropped. However the recent move of introducing Starbucks Corp. Verismo machine to the market may stop Nestle SA from expanding into the U.S. single-serve coffee market. Howard Schultz, chief executive officer at Starbucks Corp., has emphasized that the company remains committed to its partnership with Green Mountain Coffee Rosters Inc. As it has been stated by him, the Starbucks Corp. Verismo machine will coexist with the existing partnership.

Starbucks perks up single-cup competition with Verismo debut

Starbucks this week launched its new Verismo single-cup machine for the coffee-buzzed public as a chain known for its cafes continues to expand into new business venues.

Now selling exclusively on, the high-pressure technology uses pods of real milk to make espressos, lattes and regular brewed coffee. In early October, the products will hit many Starbucks retail stores and specialty retailers such as Williams-Sonoma.

Competitors likely aren’t pleased.

The one-cup market is the fastest-growing segment of the coffee market, according to Jeff Hansberry, Starbucks’ president of channel development. The $8-billion industry grew more than 143% in the last year alone in the U.S.

More than a third of brewers sold last year were a single-serving system, Hansberry said in a statement.

Though automatic drip machines are still by far the most popular choice for home coffee drinkers, with 57% of U.S. households owning one, pod and capsule machines are gaining fast, according to research firm NPD Group.

Single-serve brewers have more than tripled in recent years, becoming the primary brewer in 18% of homes from 5% in the past, according to the recent report.

Key to that growth? The Keurig machines sold by Green Mountain Coffee Roasters Inc., which dominate the market. When Starbucks first announced the Verismo in March, Green Mountain’s shares tanked.

Nestle’s Nespresso single-cup machines are also popular, though mostly abroad. The company hopes to build out sales in the U.S. Kraft Foods has its own machine, called the Tassimo.

Starbucks began offering its Via Ready Brew instant coffee in 2009 and launched its K-cup packs for Keurig machines in November.

The Seattle-based coffee giant is gung-ho about its new entry. The Verismo will be sold in a variety of colors, including silver, black, burgundy and champagne, and as both a $199 base model and a $399 version with LED display and temperature control.

“We are entering a highly dynamic and burgeoning market at a premium position, and we will win on quality and technology,” Hansberry said.

About Starbucks

Back in 1971, Starbucks opened its first coffee shop in Pike Place Market of Seattle.

Fast forward to 1982, when Howard Schultz joined Starbucks as a retail and marketing manager, he realized the potential of espresso bars on his trip to Milan, Italy.

He convinced the founders and changed the coffee shop that retailed coffee grounds to a place that sells coffee. That was the beginning of the global coffee brand Starbucks!

Starbucks has expanded its business to numerous countries since 1980.

Consequently, it owns 22519 stores spread across 80 countries around the world.

  • urge Function: Automatically adjusts water temperature after steam for optimal espresso extraction temperature
  • Stainless steel conical burr grinder
  • thermo coil heating system

  • The Starbucks Verismo Home Brewer brews your favorite high-quality Starbucks coffee and authentic espresso shots
  • Swiss-engineered
  • wide variety of signature Starbucks coffee blends and roasts, espresso pods, tea pods and milk pods

To make a perfect cup of coffee, you need to pay attention to all the steps involved- from choosing the right coffee beans to grinding them, and brewing them to get the desired flavor.

Before looking at what coffee machines Starbucks uses, let’s find out more about the different types of coffee beans it uses.

Starbucks Verismo Review: The New Home-Brew Coffee Machine

Even though there's a Starbucks location on nearly every corner, the company has now made its coffee even more accessible with the release of Verismo, a sleek Keurig-type machine for your home that brews pods into "Starbucks cafe quality lattes, espresso and brewed coffee using Swiss engineered high-pressure technology."

We know that most coffee drinkers complain about the taste of Starbucks coffee, saying it's too darkly roasted (okay, burned) and that it leaves something to be desired. But statistics speak the truth, and Starbucks made $11.7 billion in revenue in 2011 -- so someone must be drinking the stuff.

Unlike the single-pod machines of yore, Verismo features three different pod types -- espresso pods, coffee pods and milk pods that can be combined in a number of ways to make your own custom drinks. We have to admit the design is pretty sleek, probably fitting on even the most crammed countertops. The cost of the basic 580 model is $199, with the more expensive 585 model coming in at $399 (it has temperature controls and custom controls for drink size).

We at HuffPost Taste were lucky enough to get our hands on a Verismo, and were pleasantly surprised with its success. It was easy to operate, actually sort of fun to play with, and we were particularly surprised at how quickly the machine heats up your water -- the wait between plug-in to pour is only about one minute, which beats the heck out of Keurig machines.

But the real question is, how much does Verismo coffee taste like Starbucks coffee? Here's what our tasters thought.

Starbucks Verismo single cup coffee machine

So here they are, long awaited Swiss designed Verismo single cup coffee machines from Starbucks with 19 bars of pressure. You have two models to choose from, the basic Verismo 580 shown above, available in Piano Black, Burgundy and Champagne, and the programmable Verismo 585, which comes only in Piano Black and Silver. Both machines use Verismo by Starbucks single-serve coffee, espresso and milk pods that hold the same good stuff that is served in Starbucks cafes. Currently, you can buy 9 pods – Veranda Blend, House Blend, Caffè Verona, Espresso Roast, Decaf Espresso Roast, Guatemala Antigua Espresso, Caffè Latte, Decaf Caffè and Natural Dairy Milk.

Starbucks Verismo reaches brewing temperature in remarkable 15 seconds, then brews espresso in 30 seconds and coffee in under a minute. Both models come with height-adjustable drip tray to accommodate cups, mugs, etc. Used pods are automatically dropped into integrated container, that can hold 10 in the 580 and 30 in the 585 model. Either single cup coffee machine automatically shuts itself down after 5 minutes of inactivity.

Verismo 585 offers much larger 118 oz removable water tank. The 580 version only has a 34 oz one. The other key advantages of the 585 machine over the 580 model include these convenience and functional highlights,
– custom temperature control button to suit your preference
– adjustable, programmable beverage size settings
– easy-to-read, user-friendly LED display
– internal water-filtration system
– integrated rinse cycle
– LED indicator to add water, empty pod container, descale or change the filter
The price difference is $200. You can get Verismo 580 for $200, while the Starbucks Verismo 585 sells for $400. Starbucks.

Watch the video: Meet the Verismo System by Starbucks (December 2022).