Starbucks brews instant coffee for cash strapped customers

NEW YORK - Starbucks, which built its business on selling $4 cups of coffee, is to offer customers instant or soluble coffee for less than $1, which it claims tastes as good as the real thing.

The Seattle-based retail coffee giant will begin selling an instant variety of coffee, called Starbucks Via, next month at selected stores.

It follows a move last summer to offer US diner-style free refills at its UK outlets in response to belt-tightening consumers and the economic downturn.

says it has been working on the product for more than 20-years and claims that Starbucks Via is a soluble version of its fresh brewed coffee, which will be sold in slender packets in store.

Starbucks, in a statement, said: "Starbucks will host exclusive events next week in New York and other cities to introduce a breakthrough new product.

"We have been working on this project for more than 20 years, and have a patent pending on the technology that delivers Starbucks coffee in an instant form."

The instant coffee market is worth around $17bn globally -- Starbucks said its new product offers the struggling firm a significant opportunity.

In the UK the opportunity is particularly large. Instant coffee accounts for 81% of all coffee sales.

Selling instant coffee, it hopes, will allow Starbucks to generate substantially more revenue from its existing retail stores -- some of which it plans to close.

Last month after reporting a 69% fall in profits during the first quarter of the year.

The entrance of Starbucks into what is traditionally seen as the poor quality and taste end of the market could transform the market said Howard Schultz, chief executive of Starbucks, who described the introduction as a "transformational event" for the company.

Schultz said that people being served the coffee could not tell the difference between instant and fresh brewed.

Starbucks plans to offer its soluble coffee in packs of three priced at $2.95 or in packs of 12 for $9.95, which would work at around 83 cents a cup, significantly cheaper than its rivals.

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