Deal brings Starbucks to hotel rooms

By Emily Bryson York
Posted Feb. 15 at 1:06 p.m.

Starbucks announced Tuesday that it will partner with St. Louis-based Courtesy Products to provide its ground coffee in 500,000 hotel rooms in the U.S. and promised that more single-serve news to come.

The announcement follows rampant speculation as to which partner the Seattle-based coffee giant would select for its push into the single-serve coffee market, following a Chicago Tribune report on Sunday.

Starbucks expects to take control of its grocery and single-serve coffee business March 1, after a 13-year agreement with Northfield-based Kraft Foods Co. The coffee chain has had an exclusive arrangement with Kraft’s Tassimo machine, which has lagged competitors in the U.S.

Keurig, owned by Waterbury, Vt.-based Green Mountain Coffee Roasters is leader in the single-serve brewing market, with a 71 percent share, according to Janney Capital Markets.

“The single-serve coffee category in the U.S., and much of the world for that matter, is in its beginning stages of development,” Jeff Hansberry, president of Starbucks’ Consumer Products Group, said in a statement. “At this very early stage, there are numerous contenders, and no demonstrated, long-term winners related to either format or machines.”

Hansberry added more announcements will be forthcoming as Starbucks continues “to expand our presence in the premium single-serve category.”

Starbucks is making packets for Courtesy’s patented CV1 single-serve machine.  The products will be available this fall.

Starbucks plans to make a big splash in the single-serve market, which has been doubling in size each of the last three years. Single-serve comprises about 7 percent of the home coffee market, but is expected to reach 10 percent by 2012.

“Courtesy Products is continually looking for ways to innovate as well as provide our customers with amenities to make traveling more comfortable for their guests,” Jim Theiss, CEO of Courtesy Products said in a statement. “We know guests staying at luxury and premium hotels value a great cup of coffee. By pairing Starbucks coffees with our CV1 machine, we will be able to deliver a quick and delicious high-quality cup of Starbucks coffee right in their room or suite.”

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