Kraft, Starbucks Agree to Launch Starbucks Branded Beverages for Tassimo

04/09/07 Kraft Foods Inc. has launched several new initiatives to further fuel the growth trajectory of its proprietary Tassimo hot beverage system. The first is a new alliance with Starbucks Coffee Company to add select varieties of its popular Starbucks coffee to the Tassimo beverage lineup in the U.S. and Canada. Kraft also announced a new global brewer alliance with Bosch Household Appliances and more rapid geographic expansion of popular beverages.

Tassimo is Kraft’s on-demand beverage system that freshly brews a wide variety of hot beverages, including coffees, cappuccinos/lattes, teas and hot chocolate, at the touch of a button. Since its launch in France in 2004, more than two million Tassimo brewers have been sold in seven countries. With the global on-demand coffee category currently experiencing double-digit growth, Tassimo is on track to become a $200 million brand by year’s end.

“Kraft recently revamped its business plan for Tassimo to spur stronger, more profitable growth, and we’re already seeing results,” said Hubert Weber, Vice President and General Manager, Tassimo. “We’re appealing to consumers seeking true coffeehouse quality in the comfort of their own home. Our alliance with Starbucks – the brand that’s synonymous with coffeehouse quality – gives coffee lovers even more reasons to turn to Tassimo.”

Starting in December, select Starbucks varieties will be available in a single-cup Tassimo DISC (T DISC) capsule format. Tassimo brewer owners in the U.S. and Canada will be able to enjoy these four Starbucks coffees at home: House Blend, Breakfast Blend, Caffè Verona and Africa Kitamu. Other products already available in T DISC form include Seattle’s Best Coffee and Tazo tea.

“We are always looking for ways to provide an authentic Starbucks coffee experience to our customers, and to do so anywhere and anytime they prefer,” said Gerry López, president of Starbucks Global Consumer Products Group. “Starbucks Research and Development department worked closely with the Kraft Tassimo team to develop a T DISC that delivers a high-quality brewed cup of Starbucks coffee. The result will delight our customers, as they will be able to continue to enjoy their Starbucks coffee while using the highly convenient Tassimo brewing system. It’s another step as we extend the Starbucks experience beyond our stores.”

Kraft’s relationship with Starbucks dates back to 1998, when the two companies entered into a supply and distribution agreement. Today, Kraft manages sales, marketing and distribution for Starbucks coffees in the retail grocery, club and mass channels in the U.S., the UK and Canada. Starbucks is the best selling super-premium coffee in U.S. supermarkets. All Starbucks coffee distributed by Kraft is sourced, roasted, blended and packaged by Starbucks Coffee Company.

The pairing of the Tassimo and Starbucks brands is a significant milestone. “By pushing just one button, coffee lovers now can enjoy several Starbucks coffees, all perfectly brewed thanks to the patented Tassimo technology,” said Kraft’s Weber. “This brings our total Tassimo beverage offerings to more than 60 worldwide, with the selections customized for each country.”

Furthermore, Kraft is announcing a new global brewer alliance. In mid-2008, Bosch Household Appliances will launch a new Tassimo brewer carrying the well-known Bosch name. The Bosch consumer-centric approach to innovation, quality and sophisticated product development ensures the Tassimo system will continue to be made to exacting performance standards.