Starbucks to Team Up with Coinstar

Gourmet coffee giant Starbucks and automated coin-counting company Coinstar Inc. have teamed up to test an automated coffee machine under the Starbucks Seattle's Best Coffee label.

A Coinstar spokeswoman, confirmed the partnership late yesterday but would give few details about the test, such as when it started or where the machines are. She said financial details have not been disclosed.

A description of a prototype machine, along with a picture, is included in a report published Wednesday by Eric Wold, an analyst for Merriman Curhan Ford. In the report, Wold said that the machine is located near an Albertson's store in Bellevue, Wash., which is where Coinstar is based.

Coinstar is known for its network of automated coin-counting machines in supermarkets, malls, airports and other public locations in the U.S. and some foreign countries. Starbucks has said it is interested in developing an automated coffee machine, and even published a picture of one at an analyst meeting several years ago.

The picture published in Wold's report shows a kiosk with the logo of Seattle's Best Coffee, a brand owned by Starbucks. Wold said the kiosk allows customers to purchase anything from a regular cup of coffee to specialized espresso drinks, with prices ranging from $1.30 to $2.55. Wold said he believes the kiosk could provide Starbucks with "the ability to penetrate additional third-party locations with both lower upfront capital costs and ongoing operating costs." Wold said if the prototype develops into an operating business, field service maintenance could likely be provided by Coinstar's existing coin-counting field service team.

Source: Dow Jones