Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/41387
Single brews drive success, lawsuits Green Mountain thrives; Nestlé goes to court Single-serve prepackaged brewing is one of the fastest-growing areas for coffee, leading to success for companies with established single-serve technology—and lawsuits over who else can tap into the market. Portioned coffee makes up about 8 percent of the global coffee market by volume but 25 percent by value, according to the Wall Street Journal. The leading American single-serve brewing system is the K-Cup, using technology from Keurig. Green Mountain Coffee Roasters' 2006 acquisition of Keurig is paving the way for its current success: Its earnings of $56.3 million in the latest quarter is more than double the previous year. In that quarter, sales of K-Cup single- serve pods reached $485 million, an increase of 136 percent. Starbucks and ConAgra both market coffee in K-Cup pods, and Dunkin' Donuts recently signed a deal with Green Mountain to do so. Meanwhile, across the Atlantic, Nestlé is entangled in a patent lawsuit with a Swiss rival that is making coffee capsules usable in Nestlé's Nespresso machines. Nespresso, introduced in 1986, has been a lucrative product for Nestlé, with about $4 billion in sales last year. Unlike Green Mountain and the K-Cup, Nestlé does not license Nespresso technology, attempting to keep control of the market for the single-serve capsules. Nestlé sued to stop Denner, a Swiss discount supermarket chain, from marketing Nespresso-compatible Mark Your Calendar October IPO nets Dunkin' $427.5 million Franchise expansion eyed with new cash Dunkin' Donuts is poised to expand in the wake of an initial public offering that raised $427.5 million. The three private-equity firms that bought Dunkin' Brands Group in 2006 floated 20 percent of outstanding shares for the IPO. The money will be used to pay down debt and fund further expansion, especially in the western U.S., where the chain is underrepresented compared with K-Cup individually packaged brewing portions have helped fuel Green Mountain Coffee Roasters' success. capsules. Swiss courts ruled in Nestlé's favor originally, reversed the ruling, then reinstated it. A final decision is expected later this year. Similar lawsuits are pending against Nespresso-compatible capsules being sold in France and Holland. rival quick-service chains. Coffee has become increasingly important to Dunkin', with beverages bringing in 60 percent of total revenue, according to the IPO prospectus. The company claims to have a 57 percent share of the fast food coffee market. Starbucks keeps pushing in China Joint venture will export beans from Yunnan Continuing its aggressive drive into China, Starbucks Corp. has announced a partnership with a Chinese corporation to buy and export Arabica coffee beans from Yunnan province. The memorandum of understanding with Ai Ni Group is for a joint venture, China is an increasingly important market for Starbucks. like most Chinese-American partnerships, although Starbucks will have operational control. It includes operating dry mills as well as buying and exporting coffee. The deal was signed in a ceremony at the U.S & China Trade, Culture and Education conference in Salt Lake City, Utah, in July. One of Starbucks' long-term goals is 20-23 China Xiamen International Coffee Fair, Xiamen, China, www.coffeefair.cn 24-27 Camp Pull-a-Shot barista training, Santa Barbara, Calif., www.baristaguildofamerica.net/camp.html 3-5 Middle East Coffee & Tea Convention, Dubai, United Arab Emirates, www.coffeeandteaconvention.com 9-13 Sintercafé 25th Anniversary, Herradura Beach, Costa Rica, www.sintercafe.com/en/ 22-24 European Coffee Symposium, Berlin, Germany, www.europeancoffeesymposium.com/Home.aspx 6 | September 2011 • www.specialty-coffee.com November expansion of the Chinese market, where coffee consumption remains something of a novelty. Annual per-capita consumption stands at only three cups. The Ai Ni venture comes on the heels of Starbucks' announcing that it intends to triple its Chinese mainland stores to 1,500 by 2015. Starbucks took full control of a majority of its Chinese stores in June by buying out its ownership partner. "Starbucks Yunnan Coffee Project reinforces Starbucks coffee leadership in China, our second home market outside of the United States, and will help fuel our continued growth as we seek to serve customers through the more than 1,500 stores we expect to have in the market by 2015," Starbucks President John