Starbucks goes instant with 'Via Ready Brew' coffee

NEW YORK -- STARBUCKS/:Starbucks to unveil 'Via' instant coffee

Via, a minutely crunched bean that dissolves in boiled or cold water, is intended to steal from the $16 billion instant coffee market outside the USA, especially Japan and the United Kingdom.

In the U.S., where instant coffee sales are about $1 billion annually, Via will go after the 65 billion cups of brewed coffee that are consumed annually.

Via will be sold in single-serve foil packets, about the size of your index finger, and packaged in an oversize matchbook. It will be available in Starbucks, Costco and Target stores in Seattle and Chicago March 3. A packet of three will sell for $2.95; a 12-pack will cost $9.95.

Chairman and CEO Howard Schultz introduced Via, currently available in Italian Roast and Colombia varieties, in New York Tuesday before media and analysts, who tasted the product.

"This is a patented process in which we have cracked the code on replicating Starbucks coffee," said Schultz, who said the product has been in the making for 20 years. Only in the past two years, he said, has Starbucks found the technology for the "micro grinding" which allows the coffee to dissovle.

The beans are sourced and roasted in the same as the beans for Starbucks brewed coffee, and that allows Via to taste like a regular cup of brewed Starbucks.

Playing in a downscale market won't tarnish Starbucks' premium image, Schultz says. Although the dollar-a-cup cost is cheaper than a cup of coffee brewed at a Starbucks store, it is a premium over traditional instant coffee.

A ShopRite in New Jersey for instance, sells a 19-pack of Folgers Coffee Singles for $7.59, or 39-cents a cup while Via will cost 98-cents or $1.20 a cup depending on the package size. Starbucks sells a cup of brewed coffee for about $1.60.

"We realize this is a very tough environment," Schultz said. "Who would pay a premium in this market? But for less than $1 a cup … people can have a cup of coffee that's the mirror image of Starbucks. We think it's going to be positive."