The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- The competition in the single-serve coffee market is expected to intensify in the near future. According to Euromonitor, the worldwide sales of coffee, including fresh and instant, witnessed a growth of 17.5% approximately 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
Senseo brewers at 18%, and
Tassimo at 8%.
See our full analysis of Green Mountain Coffee Roasters
Sara Lee's Executive Chairman Jan Bennink has expressed an 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 an intention to attract younger buyers. In January, it bought out the stake of Philips, its partner in the business, 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 is expected to be much lower than the average cost of Keurig's K-Cups, which range from 60 cents to 90 cents each.
Presently, 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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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.