Coffee Pod Launch

COFFE POD LAUNCH

Coffee is a staple in grocery stores, an everyday product that most consumers shop for on a regular basis.

Popularity of big size discount tins creates strong price competition, but higher priced premium coffee adds significant dollar sales at retail (but have less market share).

More and more Canadian coffee drinkers are knowledgeable about coffee and demand a wider and finer selection.

Coffee pods are seen in offices, but the migration from the office to the home opens up incredible opportunities to expand he market for premium gourmet coffees and boost coffee dollar sales in grocery stores.

The introduction of single-serve coffee brewers together with single-serving coffee "pods" is expected to add both excitement and sales dollars to the coffee category.

"We believe that on-demand coffee is the begin- ning of a great new way for consumers to quickly enjoy fresh-tasting coffee, and Kraft is putting the full weight of powerhouse brands like Maxwell House and Nabob coffee behind this innovation,"

WHY USE COFFEE PODS?

Why will consumers trade in their old coffee makers for the new designs? The coffee pod sys- tems offer some distinct advantages for con- sumers. First of all, it takes less than a minute to make a cup of gourmet quality coffee. Second, it is incredibly simple to use and easy to clean. A pre-measured coffee pod (looks much like a teabag only filled with ground coffee) is placed in the machine where it is clamped tight to form a pres- sure seal. The water automatically heats to the optimum temperature of between 90 and 100 degrees C and is pressure forced through the pod to brew the coffee directly into a cup.

FAST TO USE, CONVENIENT TO CLEAN, CHEAP (high than traditional drip coffee machines, but still a lot less than the coffee at Tim horton's or Starbucks). Easier to use because there's no need to measure the ground coffee or use filter. Easier to clean because no messy ground coffee left over to toss, no pot toclean etc.

Most advantageous when person wants to make coffee in small batches, or cater to different tastes at same time.

ON-DEMAND COFFEE is the beginning of a great new way for consumers to quickly enjoy fresh-tasting coffee.

TARGET MARKET FOR COFFEE PODS?

People who want CONVENIENCE. High income (working) and high education. Coffee lovers between the age of 25 to 54. Family oriented, take trips to grocery stores. middle aged, family oriented people with high income and high education. Will tend to look for cost-effective ways to enjoy coffee, make regular trips to grocery stores, and would rather spend time at home drinking coffee in the morning while watching the kids instead of dropping by a local Starbucks. People will hectic lives that have to balance family and their work.

MORE EXPENSIVE THAN BIG TIN COFFEE

Consumers who buy into the coffee pod technol- ogy, could be paying more per cup for their at-home coffee—a trend that could drive up category dollar sales in grocery stores. "Using the pod brewing sys- tems, people will be able to make café-style coffee for about 20 to 30 cents a cup," says Buckingham. "That may seem like a lot compared to the average five cents a cup you get from typical big-tin coffee, but many people are prepared to spend $3 for a cup of gourmet coffee outside the home."

LAUNCH OR NOT TO LAUNCH?

Kraft Foods has a strong distribution network and a well-earned reputation for developing innovative new products and food applications! "Kraft will continue to take a leadership role in this emerging category with exciting innovations and brand initiatives." Kraft needs to take a leadership role in this emerging category! Need to maintain this leadership role! WORLD LEADER in coffee sales. Waiting is just not in line with their reputation. They are ready to go, but waiting to see how the U.S. does first just seems cowardly and they could lose potential sales and market share (FOLGERS). The market for convenient coffee is booming right now. No better time than right now. Market is thriving right now. There is enough research and proof to say that this launch will be successful, the European market has been thriving, and Canadians are the world's leading drinkers of coffee, how could anything possibly go wrong. Providing a convenient yet still cost-effective way of drinking coffee! Waiting will only deteriorate Kraft's leadership role in