New Starbucks kiosks to sell $1 coffee
The kiosks, developed through a joint venture with Coinstar, will exclusively offer Starbucks' Seattle's Best brand.
By Katey Stapleton, Benzinga Staff Writer
Coinstar (CSTR) has entered an agreement with Starbucks (SBUX) to open hundreds of kiosks all over the country, much like the ones shoppers now dump jars full of change into. The difference? They will brew coffee for $1.
The new kiosks, named "Rubi," will pop up at grocery stores, pharmacies and mass retailers.
Post continues below.
Coinstar has agreed to provide kiosks that only brew Seattle's Best Coffee, and in return Starbucks has promised not to forge any agreements placing its product in other companies' kiosks or vending stations.Starbucks has been pushing out new products, such as espresso machines and energy drinks, with breakneck speed, attempting to ramp up sales as its traditional cafe business has matured. The company announced this week it is buying a San Francisco bakery chain to improve its food offerings.
Coinstar's amazing new kiosks have the ability to not only serve up a cup of coffee, but also brew swankier café-style drinks for just 50 cents more. With plans to place 500 kiosks across the U.S. in the next year, this venture will put America on the map again when it comes to automated food vending, a category in which we are way behind the times.
"This relationship is a logical next step in our strategy to bring great coffee to new and unexpected locations where it's traditionally been hard to find great coffee," said Jim McDermet, senior vice president and general manager of Seattle's Best Coffee, in a company release. "Our Seattle's Best Coffee fans will be delighted to find their favorite coffee now available around-the-clock at the places they visit regularly each day."
According to McDermet, the small kiosks will be more affordable and accessible for Seattle's Best Coffee customers to get their daily fix. For these reasons, Starbucks decided Coinstar was the only way to go when it came to finding a partner. The fact that revenue is expected to be about $180 million (if 15,000 kiosks are eventually unveiled) is just the cherry on top of the whipped cream latte.
About 50 vending stations have debuted so far, prompting Coinstar to announce a "coffee club" where frequent sippers can join a loyalty program and receive promotions.
For both innovative companies, the news of this unlikely merger is not as shocking as one would think. Coinstar and Starbucks have each continued to debut original, profitable ideas, and this newest agreement is no exception to the rule.
Starbucks closed Wednesday up 2% to $53.47, while Coinstar closed at up 6% to $62.85.
MORE ON MSN MONEY
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
LATEST POSTS
S&P's top-ranked analysts share their latest stock recommendations.
FIDELITY VIEWPOINTS
- How to sell covered calls - Fidelity Investments
- Savvy year-end tax moves to consider now - Fidelity Investments
- Seven ways to prepare for tax changes
- Five reasons an annual review is crucial - Fidelity Investments
- Take a look at mid caps now - Fidelity Investments
- State of the sector: Health care - Fidelity Investments
VIDEO ON MSN MONEY
ABOUT
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.

