With Coinstar and K-Cup Expansion, Starbucks Puts a Premium on Convenience

First Coinstar counted your coins. Then it changed rental-video distribution with its Redbox vending machines. And now, Coinstar — working with Seattle's Best Coffee — wants to change the way Americans pick up their daily cup of coffee.

Coinstar and the Starbucks-owned brand are partnering to sell coffee in thousands of kiosks across the United States beginning this summer. The two companies expect the kiosks — placed in grocery, drug and mass-merchandise stores — to sell thousands of cups of coffee each year and maybe revolutionize coffee dispensing just as Coinstar expertise has caused big changes in the other two businesses.

Prices will start at $1 for a brewed cup of coffee up to $1.50 for fancier concoctions including espresso and mocha and vanilla latte. While there's nothing new about vendor-dispensed coffee, this stuff will be brewed to order from beans ground just for you.

"The quality of the beverages are going to be the quality you'd find more closely aligned with that of a hand-crafted beverage created for you," Jenny McCabe, Seattle's Best director of communications, told brandchannel. "It's just that no person hands you the cup." The machines will be called Rubi, which McCabe said was a moniker coined by Coinstar.

The deal could be helpful for restoring the brand profile of Seattle's Best, which has been diminised lately by the closing of 475 Borders stores where it ran the coffee bars. Starbucks acquired the brand nearly 10 years ago as one the could satisfy mainstream consumers who didn't want to pony up $4 to $5 a day or stop for a Starbucks. Starbucks already had a program to dispense its gift cards from Coinstar machines.

Seattle's Best also is sold in retailers on a CPG basis, has some standalone outelts, and overall is merchandised and sold in more than 50,000 points of distribution. The brand recently also added a deal to sell at Kmarts and Chevron gas stations.

McCabe said that the two companies plan to customize what Rubi dispenses regionally, favoring bold roasts in the Northwest, for instance, and lighter roasts in the Northeast. Seasonal variations might include dispensing a peppermint mocha in the winter holidays.

"But we're serving the mass-market audience," McCabe said. "Our target is someone for whom speed and convenience are parmount. People who are not willing to copmromise on the taste of their coffee and who right now may be having to settle for convenience-store coffee."

The move comes as parent brand Starbucks rolls out K-Cup packs across its U.S. stores on Tuesday. (Starbucks is the exclusive, licensed super-premium coffee brand produced by Green Mountain Coffee Roasters Inc. for its Keurig K-Cup Single Cup Brewers.)  

“Following the successful launch of Starbucks® K-Cup® packs into food, drug, mass, and club channels last November, we are looking forward to offering Starbucks K-Cup packs to the millions of customers who visit our stores every week,” stated Cliff Burrows, Starbucks president, U.S. and the Americas.