“We expect the newest Verismo system to be introduced into “select” Starbucks retail stores, online, and some specialty retailers in the U.S., Canada, and some unspecified overseas markets. No pricing is yet available; our best guess is that the brewer could retail for $299 or more.”

SBUX made it very clear that Verismo is not meant as a direct substitute to brewed K-Cups on a Keurig and that it fully supports continuing to grow its Keurig business. A lower-priced machine aiming at drip coffee drinkers remains a clear segment of the market, and we do not see meaningful near-term risk to our K-Cup assumptions following the announcement. Waiting on additional info to build into [earnings] estimates, but see a ~$0.25 opportunity out several years: We believe the new business could generate $0.25+ in incremental EPS once established.”

“Introducing a new, single-cup coffee machine called Verismo … was somewhat surprising since almost 1 year ago to the day SBUX announced a multi-year partnership with Green Mountain Coffee Roasters. This announcement speaks to the leverage that the SBUX brand has in the broader coffee market, and it is encouraging to see the company putting this leverage to work without putting significant company capital at risk.”