Starbucks Signs Distribution Agreement With Courtesy Products For Single-Serve Coffee

Feb. 16, 2011
Starbucks Signs Distribution Agreement With Courtesy Products For Single-Serve Coffee

Starbucks Corp. announced that it is entering into an agreement with Courtesy Products, a provider of in-room coffee service to hotels, to provide Starbucks ground coffees for use in Courtesy's patented CV1® in-room and on-demand brewed coffee system in up to 500,000 luxury and premium hotel rooms across the U.S.

Starbucks plans to begin offering its premium quality coffees for the CV1 this fall. In a recent study, 95 percent of Courtesy's hotel customers surveyed said they prefer and would recommend the CV1 single-cup system over traditional in-room solutions. With the addition of the Starbucks brands, the CV1 will also deliver Starbucks quality and flavor and the Starbucks Experience in a single-serve format to guests in the luxury and premium segment of the hospitality industry.

"The single-serve coffee category in the U.S., and much of the world for that matter, is in its beginning stages of development," said Jeff Hansberry, president, Starbucks Consumer Products Group in a prepared statement. "At this very early stage, there are numerous contenders and no demonstrated, long-term winners related to either format or machines. Following our very successful introduction of Starbucks VIA® Ready Brew in the U.S. and into a growing number of international markets, Starbucks will continue to explore the many single-serve and on-the-go solutions and options available to us, and to participate in those where we can better and more conveniently serve our customers wherever they may be. Look for further announcements from Starbucks as we continue to expand our presence in the premium single-serve category."

"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," said Jim Theiss, CEO, Courtesy Products. "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."

Starbucks VIA® Ready Brew was Starbucks first entry into the newly-emerging and fast-growing premium single-cup segment, defined as single-serve portions (including sticks and pods/capsules) with a consumer price greater than $0.50 per serving. In the most recent 52 weeks, according to Nielsen Data, premium single-cup represented more than two thirds of the dollar growth in total U.S. coffee category, with Starbucks VIA® driving 40 percent of that growth. Starbucks VIA became a customer favorite quickly after its launch, has generated over $180 million in sales and is now available in the U.S., Canada, England, Ireland, Japan and the Philippines through a combined 50,000+ points of distribution globally.