Starbucks Attacks Coffee Market with K-Cups

Starbucks (NASDAQ:SBUX) announced Tuesday that it will begin offering its coffee in single-cup brewing K-cups, which are used in Keurig coffee makers. Green Mountain Coffee Roasters (NASDAQ:GMCR) produces the Keurig Single Cup Brewing system, and is currently the system’s “exclusive licensed super-premium coffee brand”, according to a Starbucks statement.

Starbucks’ new K-cups will be available in grocery stores and specialty retailers, including Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), beginning in November. The Starbucks K-cups will be made available in Canada and online on Starbucks and Green Mountain’s websites early next year. K-cups will go on sale in Starbucks retail stores later in 2012. Dunkin’ Brands (NASDAQ:DNKN) already sells its own version of the K-Cups at Dunkin’ Donuts stores.

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Jeff Hansberry, head of Starbucks’ global consumer products business, says the company plans to build K-cups into a $1 billion business. In its announcement this morning, Starbucks (NASDAQ:SBUX) noted that K-cup sales totaled nearly $2 billion last year, driving growth within the coffee industry.