Starbucks inks supply chain deal, will provide coffee for Courtesy Products one-cup brewers

The world's biggest coffee chain, Starbucks, announced this week it will provide ground coffee for use with Courtesy Products' CV1 one-cup brewers in upscale hotel rooms in the U.S. starting this fall.

Starbucks has endeavored to break into the increasingly lucrative one-cup coffee market for the past few years, but it was stuck in an exclusive supplier deal with Kraft's Tassimo home brewer that effectively precluded it from selling its coffee offerings elsewhere in the market; that deal, however, will come to an end March 1 and Starbucks said in a statement its newest supply chain deal is the first of many it hopes to sign in the sector.

According to Reuters, Starbucks is also in negotiations with Green Mountain Coffee Roasters to sell its coffee for the Keurig brewer, which commands more than 70 percent of the market. The single serve coffee sector has surged in recent years, Canaccord Genuity analyst Scott Van Winkle said. Van Winkle asserts U.S. sales in the single-serve coffee category will near $4 billion in 2011.

"The single-serve coffee category in the U.S., and much of the world for that matter, is in its beginning stages of development," said Jeff Hansberry, the president of Starbucks' consumer products group. "Look for further announcements from Starbucks as we continue to expand our presence in the premium single-serve category."