Main | Friday, October 26, 2012

Redbox Aims At Starbucks

Coinstar, the parent company of those ubiquitous Redbox DVD vending machines, wants to have the same effect on Starbucks that it did on Blockbuster.
Redding expects each machine to serve as many as 28 coffees and lattes a day, with a simple cup fetching $1 to $1.50 and specialty drinks $1.50 to $2. At those prices—up to $1.50 less than Starbucks for a latte—Coinstar is going after price-conscious shoppers. Coffee-sipping Americans on average spend about $5 a workday for their lattes and mochas outside the home, or $1,092 a year, according to Accounting Principals, a researcher in Jacksonville, Fla. That’s led everyone from gourmet chains, including Starbucks and Peet’s Coffee & Tea (PEET), to fast-food chains such as McDonald’s (MCD) and Dunkin’ Donuts to hawk java. Coinstar may eventually install as many as 15,000 Rubi kiosks. While that might generate sales of $200 million a year, according to Eric Wold, a B. Riley analyst in San Francisco, Rubi is unlikely to disrupt the coffee market the way Redbox upended DVD rentals. One reason: more competitors.
I can't see any of my coffee snob pals buying their go-go juice from a vending machine, but I'm guessing they are nowhere near the target demo for Coinstar.

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