The following video is part of our "Motley Fool Conversations" series, in which consumer-goods editor and analyst Austin Smith and chief technology officer Jeremy Phillips discuss topics across the investing world.
In today's edition, Austin and Jeremy talk about Starbucks' (Nasdaq: SBUX ) new entrance into the home coffee brewing market. Of course this has huge implications for Keurig device maker Green Mountain Coffee Roasters (Nasdaq: GMCR ) . However, Starbucks is very careful to point out that Keurig's device is a low-pressure brewer, while Starbucks' new brewer, the Verismo, is a high-pressure brewer. This means the Verismo will be more focused on espressos, cappuccinos, and other speciality beverages. Despite the stated differences in product focus, this seems to be a shot across partner Green Mountain's bow. While current devices are low-pressure brewers, Green Mountain recently announced its own espresso-focused machine, the Vue. Furthermore, the company is partnering with Luigi Lavazza SpA to create a high-pressure capsule system. So while Starbucks' new product isn't direct competition to Green Mountain's current brewers, it's important to see that it is a direct threat to its new model. This puts Starbucks that much closer to nailing Green Mountain's coffin shut.
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