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 Nestle, the world's largest food company, said on Wednesday its new
VertuoLine system will go on sale in the United States and Canada
this week. It will make larger cups of coffee as well as the smaller
espressos, popular in Europe, for which the brand is already known.
The $8 billion global single-serve coffee market is one of the
fastest-growing areas of an otherwise tepid packaged-food industry.
Nestle has about 35 percent of the market globally, but its presence
in the United States is dwarfed by Green Mountain's Keurig system,
which controls more than three quarters of the market.
"We'll watch it like we watch all of them," Green Mountain Chief
Executive Brian Kelley told Reuters at the Consumer Analyst Group of
New York (CAGNY) conference in Boca Raton, Florida.
Other rival brewers include the MyCafe from Bunn, the Tassimo from
Kraft Foods Group <KRFT.O> and Starbucks Corp's <SBUX.O> Verismo.
Green Mountain is planning new machines as well. This fall, it will
launch Keurig 2.0, which uses both single-serve "K-Cups" and
larger-sized "K-Carafe" packs that brew 28 ounces of coffee.
"We want a brewer on every counter and we want a beverage for every
occasion of the day," said Kelley, who added that only 20 percent of
people in the United States have a single-cup coffee maker.
Keurig personal brewers range in price from about $100 to $180. The
list price for Nespresso's basic VertuoLine will be $299 and a
version with a milk frother will cost $349.
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TreeHouse Foods Inc <THS.N> earlier this month sued Green Mountain,
alleging it attempted to illegally maintain a monopoly over the pods
used in its new Keurig coffee brewers due to be released later this
year.
TreeHouse and several other companies have made and sold pods for
Keurig machines since some patents expired in 2012.
"We think (the lawsuit) is without merit," Kelley told Reuters.
Separately, Green Mountain plans to launch a machine later this year
that makes cold beverages, and Coca-Cola Co <KO.N> has signed on as
its first partner. The world's largest soda seller bought a 10
percent stake in Green Mountain for $1.3 billion.
Shares in Green Mountain were off 2.2 percent to $117.71 on the
Nasdaq. Nestle stock was flat at 65.75 Swiss francs.
(Editing by Bernadette Baum)
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