Northern,WI  10/16/2012 (BasicsMedia) – I don’t know about you but when I get up in the morning I just don’t pop out bed like toast from a toaster. If there was a time of the day that routine really comes into play, it has to be that first hour from the time the feet hit the floor, till the time we walk out the door. One of the first things I do is head downstairs and make sure the timer went off on my coffee maker. Secure with that knowledge I then bounce off a few walls and hit the shower knowing my day will start with my beloved jolt of caffeine. Did you know that caffeine is the world’s most widely consumed psychoactive drug, and unlike many other psychoactive substances, it is legal in most of the world. Sorry, I digress.

Today Starbucks Corporation  (SBUX) is bringing out the new Verismo coffee and espresso maker for sale in U.S. stores. The Verismo is a single serving coffee brewer which is already being sold online and through U.S. retailers. Pardon the pun, but this move  has been brewing for a long time.

The single serving coffee market is one of the fastest growing markets out there “estimated to be $8 billion”. At the moment this market is controlled by Green Mountain Roasters (GMCR) and Nestle SA (NESN.VX), thats right the world famous chocolate maker. To show you the weight Starbucks throws around, back in March they announced that the Verismo was coming out and at that time Green Mountain was trading near $70. After the announcement Green Mountains share price dropped to right around $50 within two months and now they are trading in the mid twenties.

Why is this so scary? Green Mountain’s Keurig single cup makers have three quarters of the U.S. market share and Nestle’s Nespresso espresso brewers hold a 35% share of the global market, with much of that control residing in Europe. Starbucks and Green Mountain have an agreement at the time being where Starbucks provides K-cups which is what the Green Mountain Keurig machines use. So you can see how somewhere down the line this agreement could become a big question mark.

The price tag on all these single serving machines is anywhere between $150 on the low end, up to around $700 on the high end. Starbuck’s Verismo is right in the middle of the pack with a price tag range of $199 to $399. With 4,300 stores across the U.S. you are only about eighty miles from the nearest Starbucks Coffee Shop in over half the country.

Would you  like another cup? But of course you would.

Disclaimer: We have no position in any of these companies and do not intend to trade any shares. Nor are we paid to write about them.

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