Explaining Southern California's economy

Starbucks goes single-cup

Starbucks Verismo

Starbucks

Starbucks introduces a single-cup coffee-brewing system. Can you say "Verismo?" And of you love espresso, do you want to?

Big news! But bad news for Green Mountain Coffee Roasters. Starbucks just announced that it will begin selling a single-cup home coffee-brewing system. This is from MarketWatch:

Starbucks said its brewer, called Verismo, will make coffee, espresso, latte and Americano drinks. Verismo will be available by the 2012 holiday season and be sold over the Internet, as well as at certain Starbucks stores and retailers.

In a statement, Starbucks didn’t give pricing information or indicate how this would affect its current relationship with Green Mountain, which this past fall began selling K-Cups with Starbucks coffee. In the first two months, Starbucks shipped more than 100 million of its branded K-Cup packs.

The single-cup coffee brewer market is growing fast, and Starbucks Chief Executive Howard Schultz has been seeking to make a strong push into it.

“We have long believed that the biggest prize within the segment is a high-pressure system that would give us the opportunity to deliver Starbucks-quality espresso beverages at home and at work for customers who desire the Starbucks espresso experience outside of our stores,” he said in the statement.

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Dunkin' Donuts: The return to California, by the numbers

dunkin' donuts to california

Photo by Qfamily via Flickr Creative Commons

Is this a match for Starbucks in California?

There haven't been any actual Dunkin' Donuts stores in California since the 1990s, but that's all about to change. This isn't you father's Dunkin' Donuts. This is a whole new, amped-up, recently IPO'd and private-equity enabled Dunkin' Donuts. Not a cheerful place to stop in for a delicious coffee and and sticky ring of fried dough, but Starbucks worst nightmare.

Dunkin' Donuts, which has become something of a hipster alternative to 'Bucks, has almost no presence west of the Mississippi. However, following its $400 million initial public offering last year, it's putting itself under pressure to grow. Understandably, given that it's stock price has bumped along in a narrow trading range since its successful debut (it came out at $19 and has lived reliably above that ever since). But it's trading at 100 times earnings (not unusual for a newly IPO'd company), which means that investors are expecting this sucker to go someplace.

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The DeBord Report on 'America Now with Andy Dean'

I did my weekly Economy Report on "American Now with Andy Dean" a day early this week — Thursday rather than Friday. Andy very kindly informed me that the first step to leaving the liberal matrix is admitting that you have a problem, but I think I need to know what the other eleven steps are before I'm fully prepared to go down that road. In any case, we ran through the business news of the week, which included President Obama's budget; General Motors' record 2012 profit and Mitt Romney's view of the bailouts; the thorny question of whether "carried interest" income earned by folks in the financial sector should be taxed as regular income; and the whole dustup over Starbucks policy toward gun owners.

Listen in! It was a snappy discussion, as usual. I come in about halfway though.

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Lawyers, guns, and coffee: Starbucks may have to kick gun lovers out

Chris Scott/Flickr.

Starbucks re-opening, 2010.

Starbucks has gotten itself into the very definition of an awkward position, particularly in California. The coffee chain is being protested by an anti-gun group for looking the other way when practitioners of what's called "open carry" show up for meetings at Starbucks with their unloaded firearms.

Starbucks has said that it's just respecting the local laws. But there's speculation that 'Bucks is being used as a forum by the open-carry crowd to invite challenges to its rights (they're even come up with a gun-weilding Starbucks alterna-logo that probably horrifies Howard Schultz). And of course Starbucks' core demographic isn't as friendly to the Second Amendment as the core demo of the National Rifle Association.

So Starbucks has a business problem. Gun advocates and gun haters both like coffee. Why would you want to choose between groups?

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Diet Mountain Dew: Pepsi's billion-dollar baby

The Diet Dew does a billion bucks in sales.

The Chicago Tribune reports that Diet Mountain Dew brings in $1 billion a year in sales. That's enough for PepsiCo, which produces the Diet Dew, to buy every many, woman, and child in America two 20-ounce bottles, with some change left over. And that 20-ounce bottle is very popular. Here's the Trib:

Diet Mountain Dew was introduced in 1988. According to the company, it is now the top-selling 20 ounce diet soft drink by volume in convenience stores and gas stations.

So you can see where the billion comes from. Interestingly, the other two billion-dollar Pepsi brands are Brisk tea and Starbucks beverages. Only one of those is an iridescent green color and contains few calories while invoking the storied history of American moonshine-making, so if that's what you look for in a drink, Pepsi has you covered.

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