Starbucks and Green Mountain Coffee Roasters are going to rule the world of Coffee!

by chee Leng (on coffee makers)

Starbucks K cups

Starbucks K cups

The JV between Starbucks and Green Mountain Coffee Roasters (the company behind Keurig) has been speculated after the break of the former from Tassimo.

And now that they merged, this mutally beneficial relationships is going to boast both of their coffers and have an impact on competitors especially -Nespresso.

This JV would benefit both Starbucks and Green Mountain in their international expansion.

How it benefit Starbucks

From the coffee bags to the Via, it is not a secret that Starbucks wanted a product that can enter into the consumers' home.

It tried with Tassimo, has some success, but was limited because of the reach of tassimo -so it needed something bigger.

It launched Via, an single serve instant coffee that was a hit in US, Japan and Philipnes (heard that they just launched in China).

But, some coffee snobs complained about it being "instant", so they needed a R&G format that is easy for the consumers to use, after all, consumers that go to starbucks are not those that would bother using an espresso machine right?

With Keurig, they can do all these. Moreover, Keurig already has a very strong presence in KOrea and Japan.

If starbucks would to expand internationally, Japan is a key nation to be in, especially if an Asia expansion is in their plan.

In addition, keurig is also being sold in retail shops (most of which Starbucks is not yet there), but now they would be there as a K-cup, gaining them immediate entrance into consumers' homes.

And not to mentioned, the current millions of keurig users that are already using this brewer, Starbucks potentially be in this households as well.

Together with Via, Starbucks would now have two products that can be inside consumers' house...

How it benefit Keurig.

For Keurig, this is also a good deal. They get to sell at all starbucks outlets. Starbucks drinkers are loyal to their brands.

I expect a spike in sales just purely due to starbucks coffee lovers wanting to prepare the coffee at home and buying a Keurig.

For Keurig, this is an expansions of distribution outlets.

Product wise, Keurig now has a branded coffee name under their wing and that should get them more users as well, even those that are not loyal to starbucks brands.

The ability to enjoy a Starbucks coffee in the comfort of your home, is a good story to sell...

Now, I look forward to Starbucks keurig coffee maker coming to Singapore...

My $0.02.

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