LIVING SINGLE

LIVING SINGLE

Riesbeck's Food Markets has perked up Center Store by cutting in a new 4-foot section specifically for single-cup coffee. What's more, the St. Clairsville, Ohio, retailer brought in a companion item: a Keurig single-cup coffee-brewing machine. Selling for $119, the machine carries one of the highest retails at the 11-store retailer. Nevertheless, company officials decided the machines would complement

Riesbeck's Food Markets has perked up Center Store by cutting in a new 4-foot section specifically for single-cup coffee.

What's more, the St. Clairsville, Ohio, retailer brought in a companion item: a Keurig single-cup coffee-brewing machine. Selling for $119, the machine carries one of the highest retails at the 11-store retailer. Nevertheless, company officials decided the machines would complement the single-serve coffee section well.

“Seeing the actual machine will help shoppers better understand what single-serve coffees are and how they're made,” Jeff Wines, Riesbeck's coffee buyer, told SN.

The new section offers about 30 stockkeeping units, including such popular brands as Green Mountain and Newman's Own.

The section is particularly popular with Riesbeck's younger shoppers, said Wines.

“Younger shoppers like the convenience and variety of single-cup coffee,” he said.

So much so that Riesbeck's even started carrying other beverages that can be made in single-cup brewers. These include Twining's tea and Swiss Miss hot chocolate, both of which are sold in “K-Cups,” single-serve coffees designed to be brewed in Keurig machines.

The typical price point for single-serve coffee at Riesbeck's is $8.99 for a 12-count package. While that's much higher than canned coffee, sales are doing well, said Wines.

The $119 coffee machines are off to a slow start, but Wines expects sales to pick up during the holidays when people buy them as gifts.

Single-cup coffee generated $239.5 million in dollar sales in food stores for the 52 weeks ending July 10, a whopping 136% jump from the previous 52 weeks, largely a result of new product introductions. The Top 10 brands are Green Mountain, Folgers Gourmet Selections, Tully's, Newman's Own Organics, Keurig Caribou, Donut House, Senseo, Millstone, Van Houtte and Keurig K-Cup Coffee Sampler.

Green Mountain Coffee Roasters, which acquired Keurig in 2006, offers more than 200 varieties of single-serve coffee and tea.

“We believe that single-cup brewing is driving the growth of specialty coffee in grocery,” said company spokeswoman Sandy Yusen.

That's because more consumers opt to enjoy coffeehouse-quality coffee at home.

“Consumers have become accustomed to a higher-quality, more convenient coffee experience, and many have a tough time getting that in their home,” Yusen said. “This has created a nice opportunity for us to stress how convenient and cost-effective it is to get a great cup of coffee at the touch of a button with the Keurig Single-Cup Brewing System.”

In addition to Keurig, plenty of other brewers are on the market, including Tassimo, Brevill and Mr. Coffee. In a partnership with Krups, Nescafé markets the Dolce Gusto brewer, which features a 15-bar pressure system that's equal to or above coffeehouse machine standards. Dolce Gusto single-cup coffee flavors include Caffè Lungo (dark roast, mild and decaf); Cappuccino; and Iced Cappuccino.

The market is also exploding with new coffee brands.

Under a partnership between Starbucks Corp. and Green Mountain Coffee Roasters, the Starbucks coffee and Tazo tea brands will be available this fall for Keurig single-cup brewing systems.

The deal makes Starbucks the exclusive, licensed super-premium coffee brand produced by GMCR for the Keurig Single-Cup Brewing System.

The Starbucks K-Cup portion packs will be available through food, drug, mass, club, specialty and department store retailers throughout the U.S. and Canada. The companies expect to expand distribution to Starbucks stores, as well consumer-direct websites like www.greenmountaincoffee.com [4] and www.keurig.com [5]

Among other new products, Dunkin' Donuts just started selling Dunkin' Donuts K-Cup portion packs for use with the Kauri Single-Cup Brewing System.

Dunkin' Donuts K-Cups are available only in Dunkin' Donuts retail stores, and come in five flavors, including Original Blend and Dunkin' Decaf, at a suggested retail price of $11.99 for a 14-count box.

While Dunkin' does not plan to expand distribution to grocery, the rollout is yet another vote of support for the at-home brewing concept.

“Our customers want to enjoy Dunkin' Donuts coffee throughout the day, whether they're at home or work,” said Michelle King, a company spokeswoman. “We believe that coffee prepared in-home and coffee purchased from retail establishments like Dunkin' are two separate occasions, and our goal is to increase the number of Dunkin' coffee occasions overall — in home and through our restaurants.”

Demand for at-home brewed beverages is not limited to coffee. The single-cup coffee section also features items like Twinings tea and Swiss Miss hot cocoa.

GMCR introduced K-Cup portion packs for iced coffee and iced tea. The “Brew Over Ice” K-Cups are designed to brew directly over ice with a Keurig Single-Cup Brewer. Iced coffee flavors include French Vanilla and Nantucket Blend, while iced tea flavors include Celestial Seasonings Southern Sweet Tea.

GMCR's Green Mountain Naturals' brand has also introduced hot apple cider K-Cups, made with real apples, brown sugar and cinnamon.

West Point Market, Akron, Ohio, has a successful bulk coffee department, so it decided not to sell single-cup coffee. But Chief Executive Officer Rick Vernon can see why the segment is growing in popularity.

“It's a great alternative to running out and spending $5 at Starbucks,” he said. “It gives you the same thing at home for 20 cents.”

West Point does, however, sell single-cup tea from Twinings. The tea is a strong performer, said Vernon.

“Many consumers don't have the time or know-how to make a good cup of tea,” he said.

Single-Cup Leaders

Top 10 Single-Cup Coffee Brands

  1. GREEN MOUNTAIN
  2. FOLGERS GOURMET SELECTIONS
  3. TULLY'S
  4. NEWMAN'S OWN
  5. KEURIG CARIBOU COFFEE
  6. DONUT HOUSE
  7. SENSEO
  8. MILLSTONE
  9. VAN HOUTTE
  10. KEURIG K-CUP COFFEE SAMPLER

SOURCE: SymphonyIRI, based on dollar sales in food stores for the 52 weeks ending July 10

Home Goods

SEATTLE — The ever-expanding single-cup coffee section will get bigger this fall when Starbucks K-Cup portion packs hit the market.

Under a partnership between Starbucks Corp. and Green Mountain Coffee Roasters, the Starbucks coffee and Tazo tea brands will be available for Keurig single-cup brewing systems.

The deal makes Starbucks the exclusive, licensed super-premium coffee brand produced by GMCR for the Keurig Single-Cup Brewing System.

The Starbucks K-Cup portion packs will be available through food, drug, mass, club, specialty and department store retailers throughout the U.S. and Canada. The companies expect to expand Starbucks K-Cup portion pack and Keurig Single-Cup Brewing System distribution to Starbucks stores, as well as consumer-direct websites like www.greenmountaincoffee.com [4] and www.keurig.com [5].

The goal of the deal is to provide more convenience to Starbucks consumers, as Starbucks research shows that more than 80% of current Starbucks customers in the U.S. do not yet own a single-cup brewer.
— C.A.