Starbucks plans instant coffee debut

Thu Feb 12, 2009 8:24pm EST
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By Lisa Baertlein

LOS ANGELES (Reuters) - Starbucks Corp is moving into the instant coffee market as it works to shake off its reputation as a seller of pricey coffee drinks.

The Seattle company plans to unveil Via instant coffee on Tuesday and to make it available next month.

Starbucks says the new drink item was 20 years in development and replicates the taste of Starbucks coffee. A trio of single-serve Via packets will sell for $2.95 and 12 packets will be priced at $9.95.

The move pits the company, which already sells its coffee beans in grocery stores and in its own shops, against giant food sellers with established instant coffee brands. They include Nescafe maker Nestle and Sanka seller Kraft Foods Inc.

Instant coffee, which Starbucks says has a $17 billion global market, was more popular decades ago in the United States and remains a staple in parts of Europe and Asia.

In the latest quarter, the United States contributed $2 billion of the company's $2.6 billion in total revenue.


Starbucks started paying the price for building too many stores at around the same time that the U.S. economy hit the skids. Its customers are visiting less often and some have switched to brewing coffee at home in a bid to save money.   Continued...

<p>Starbucks signs are seen outside one of its stores in New York July 3, 2008. REUTERS/Chip East</p>