Green Mountain’s Success Attracts Competitors

The competition in the single-serve coffee market is going to intensify in the near future. According to Euromonitor, the worldwide sales of coffee, including fresh and instant, saw growth of 17.5% and reached $70.9 billion in 2011. The single-serve coffee segment witnessed an impressive growth of 31% and reported $5.8 billion in revenues.

In the U.S., Green Mountain Coffee Roasters is the dominant player with control over more than three-quarters of the U.S. market. However, Nestle is the leading player globally with a 35% market share followed by Sara Lee’s Senseo brewers at 18%, and Kraft Foods’ Tassimo at 8%

((See: Single-cup coffee sales seen growing, Reuters))

See our full analysis of Green Mountain Coffee Roasters here

Other Players Showing Interest in this Niche Segment

• Sara Lee’s Executive Chairman Jan Bennink has expressed interest in reinvesting in the single-serve coffee market. Sara Lee plans to discontinue Senseo brewers in North America beginning March 31, except on select websites. The company is presently working to make the machine more appealing, with a target of attracting younger buyers. In January, it bought out its partner Philips’ and assumed full control of its Senseo business.
• Wal-Mart is planning to introduce Esio Beverage System, a more reasonable line of brewers at its stores. Going by reports, the price per serving will be much lower than the average cost of Keurig’s K-Cups, which range from 60 cents to 90 cents each.

Currently, the share of single-serve segment in the overall coffee market stands at about 8% which provides plenty of room for growth, and we expect it to grow further with increasing interest from other players in this niche segment. The growing demand for convenience, affordability, ease of usability and high-quality coffee at home will help drive growth in this niche segment.

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