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Starbucks CEO Addresses Single-Serve Strategy

In recent days, there has been more than a little speculation about the direction Starbucks will take as it enters the single-serve coffee market.

Starbucks
Oliver P. Quillia for cnbc.com
Starbucks

The biggest question, as I have repeated pointed out: Will it or won’t it partner with Green Mountain, which is the patent-protected market leader in single-serve coffee, via its K-Cup coffee pods.

For the first time in its public discussions of single-serve, Starbucks specifically mentioned Green Mountain by name in an internal memo today.

According to the memo, obtained by CNBC, CEO Howard Schultz said: “With specialty distribution arrangements and some aspects of its cartridge technology protected by patents for the next 18 months or so, Green Mountain has done a very fine job introducing single-serve brewer technology to the U.S. market. And as a result it has emerged as an early leader."

The memo continued: "But as I have said, these are very early days, and history has demonstrated time and again that patents alone do not determine market winners—deep customer engagement, best-in-class experiences and quality do.”

For the entire memo, click here.

Questions or comments? Email HerbOnTheStreet@cnbc.com

Follow Herb on Twitter: @herbgreenberg

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