New Kraft Foods-Costa agreement reflects company’s ambition to win in retail on-demand coffee across europe

Kraft Foods (NYSE: KFT) today announced a new agreement with Costa Coffee, the world’s second largest coffee chain, to offer UK coffee-lovers Costa’s most popular beverages at any time day or night with the Tassimo on-demand system. This agreement is another step forward towards Kraft’s ambition to make Tassimo Europe’s leading single-serve beverage system. Kraft Foods is already a market leader in coffee across Western Europe[1] and holds the No. 1 position in many markets around the world, including Germany, France, Austria, Poland, Sweden, Romania, Canada and South Korea.[2]

“We’re stepping up our efforts to win in the retail on-demand coffee segment, and this new agreement with Costa is an example of that,” said Hubert Weber, President, Coffee, Kraft Foods Europe. “Tassimo is the easiest, fastest and most affordable single-serve system in the value range, and it’s the perfect way to bring the UK’s favourite coffee shop coffee to homes and offices across Britain.”

Tassimo brewers and Costa Cappuccino, Latte and Americano T discs will be available in Costa retail outlets in the south west of England beginning next month before going on sale across the UK this fall. The Costa range joins a wide variety of other leading brands available for the Tassimo system, including Jacobs, Kenco and Gevalia coffee, Milka and Cadbury hot chocolate and Twinings teas.

“The Costa-Tassimo range is an exciting new chapter for Costa,” said Jim Slater, Managing Director, Costa Enterprises. “We have been overwhelmed with customers asking for their favourite coffee at home, and with the Costa-Kraft range, we can now deliver exactly that. Our aim is to give coffee lovers an unbeatable coffee experience wherever and whenever they want.”

Tassimo: Well-Positioned to Win in the Retail On-Demand Segment

As coffee drinkers around the world demand more sophisticated beverages where they live and work, single-serve coffee continues to grow in popularity. In fact, according to AC Nielsen, retail on-demand is the fastest-growing segment of the world’s $71 billion market for coffee.

“Because single-serve coffee is still in its infancy, the addition of Costa coffees to our portfolio has the potential to change the way millions drink coffee, while helping us meet our goal of making Tassimo Europe’s leading single-serve brewing system,” Weber said.

The Tassimo system is unique in that it reads each T disc to brew different drinks to perfection at the touch of a button. Tassimo brewers are manufactured by BSH Bosch and Siemens Home Appliances.

“We see a great potential in Tassimo, with further expansion opportunities in both existing and new markets,” said Dr. Ralf Fuchs, Senior Vice President, Consumer Products, BSH. “The strength of the BOSCH brand combined with the strength of the Tassimo brand is a recipe for continued success.”