Starbucks Verismo System vs. Competitors

Last night, Starbucks offered a free beverage from its new Starbucks Verismo System.  Since I’m a big fan of the Keurig and Nespresso systems, I had to check it out.  Plus, I can’t pass up free coffee!  The biggest benefit that Starbucks is touting with the system is that it can make lattes.  To do so, you put the milk pod in first and push the button for milk.  Then you put the espresso pod in and push that button.  However, there are a couple of engineering flaws in the system that we observed in our simple test of two lattes.

First, the pods tend to fall through to the discard chute when putting them in to use.  It’s a delicate balance of trying to put them in the correct way without them falling through to the bottom.  Thankfully, the fallen, unused pods can easily be retrieved, but it would be a pain to deal with that multiple times.  Our demonstrator had three fall through while we watched the demo, so even with practice, it seems to occur frequently.

Second, the pod puncture method doesn’t produce a consistent quantity.  While my latte came out just fine, my husband’s only had a few drops of espresso in a sea of warm milk.  Once again, this would be a bit annoying, especially after paying $200 for the system.

Speaking of price, I thought I’d do a little analysis on all three systems:

  • The Verismo is used for espresso, lattes, and coffee and has seven flavor choices (plus one milk choice).  System prices are $199 and $399 for the home version and professional version, respectively.  Twelve pods cost $11.95, and twelve milk pods cost $9.95.
  • The Keurig is mainly used for coffee and tea and has over 200 flavor choices.  System prices range from $100 to $250 for noncommercial versions.  Most K-cups range from $16.49 to $19.49 for 24.
  • The Nespresso makes coffee and espresso with some models having the attachment to froth milk for cappuccino or latte.  There are 16 flavors available at $6 for 10 pods.  System prices range from $129 to $699.

In looking at these prices, the Verismo system is probably priced about right even though both Keurig and Nespresso have models that are cheaper than Starbucks lower end model.  With the ability to make lattes and with the Starbucks brand name, $199 is probably in the proper range.  However, the Starbucks pods are too expensive, and since they are the variable cost that will really matter over time, this is where I would decide not to purchase a Verismo.  Nespresso pods are $0.60 each and Keurig pods are $0.69 to $0.81 each.  The Starbucks pods are $1 each with the milk pods costing $0.83 each.  A Starbucks tall latte in the store is around $2.60, so it would take making over 258 homemade lattes just to make up the cost for the $199 system (not including tax).  For people who drink Starbucks lattes every day, the cost for the system and pods may be worth it.  For me who just enjoys a great cup of espresso or coffee, it is not.

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