Will Starbucks partner with Green Mountain to capture single-serve coffee market?

Starbucks Corp. the world's largest coffee chain may soon announce a partnership with single-serve coffee segment leader Green Mountain Coffee Roasters, according to unconfirmed reports, with a view to establishing its presence in the fast-growing segment with a big bang.

Starbucks had announced on Sunday that it was planning to launch a new product for the single-cup coffee market, which according to Euromonitor International is steadily growing its market share and is expected to hit 10 percent of the fresh coffee market in 2012. At present, Vermont-based Green Mountain is the undisputed leader in this market with its Keurig brewer, with a share of close to 80 percent.

Canaccord Genuity analyst Scott Van Winkle told Reuters that the rapidly rising consumer adoption of Green Mountain's brewers spells a market opportunity that is difficult for Starbucks to resist, and hence a partnership would not be surprising.

Starbucks spokeswoman Lara Wyss herself was quoted in The Chicago Tribune as saying that Starbucks hopes to accomplish with single-serve coffee what Apple did for mobile phones. Given that Starbucks cafes do not have single-serve machines, a partnership with a maker for the launch of the new product seemed to be on the cards and given Keurig's dominance in the market, Green Mountain could well be a natural choice.

However, sources from Green Mountain declined to comment on what it called speculation around potential partnerships.