Northfield, IL/September 4/Canada Newswire -- Kraft Foods Inc. launched several new initiatives to further fuel the growth trajectory of its proprietary Tassimo hot beverage system. The first is a new alliance with Starbucks Coffee Company to add select varieties of its popular Starbucks coffee to the Tassimo beverage lineup in the U.S. and Canada. Kraft also announced a new global brewer alliance with Bosch Household Appliances and more rapid geographic expansion of popular beverages.

Tassimo is Kraft's on-demand beverage system that freshly brews a wide variety of hot beverages, including coffees, cappuccinos/lattes, teas and hot chocolate, at the touch of a button. Since its launch in France in 2004, more than two million Tassimo brewers have been sold in seven countries. With the global on-demand coffee category currently experiencing double-digit growth, Tassimo is on track to become a $200 million brand by year's end.

"Kraft recently revamped its business plan for Tassimo to spur stronger, more profitable growth, and we're already seeing results," said Hubert Weber, vice president and general manager, Tassimo. "We're appealing to consumers seeking true coffeehouse quality in the comfort of their own home. Our alliance with Starbucks -- the brand that's synonymous with coffeehouse quality -- gives coffee lovers even more reasons to turn to Tassimo."

Starbucks joins Tassimo lineup
Starting in December, select Starbucks varieties will be available in a single-cup Tassimo DISC (T DISC) capsule format. Tassimo brewer owners in the U.S. and Canada will be able to enjoy these four Starbucks coffees at home: House Blend, Breakfast Blend, Caffé Verona and Africa Kitamu. They can be purchased at and at select retailers in time for the holidays. Other products already available in the U.S. in T DISC form include Seattle's Best Coffee and Tazo tea.

"We are always looking for ways to provide an authentic Starbucks coffee experience to our customers, and to do so anywhere and anytime they prefer," said Gerry López, president of Starbucks Global Consumer Products Group. "Starbucks Research and Development department worked closely with the Kraft Tassimo team to develop a T DISC that delivers a high-quality brewed cup of Starbucks coffee. The result will delight our customers, as they will be able to continue to enjoy their Starbucks coffee while using the highly convenient Tassimo brewing system. It's another step as we extend the Starbucks experience beyond our stores."

Kraft's relationship with Starbucks dates back to 1998, when the two companies entered into a supply and distribution agreement. Today, Kraft manages sales, marketing and distribution for Starbucks coffees in the retail grocery, club and mass channels in the U.S., the U.K. and Canada. Starbucks is the best selling super-premium coffee in U.S. supermarkets. All Starbucks coffee distributed by Kraft is sourced, roasted, blended and packaged by Starbucks Coffee Company.

The pairing of the Tassimo and Starbucks brands is a significant milestone. "By pushing just one button, coffee lovers now can enjoy several Starbucks coffees, all perfectly brewed thanks to the patented Tassimo technology," said Kraft's Weber. "This brings our total Tassimo beverage offerings to more than 60 worldwide, with the selections customized for each country."

New brewer alliance with Bosch in mid-2008
Furthermore, Kraft is announcing a new global brewer alliance. In mid-2008, Bosch Household Appliances will launch a new Tassimo brewer carrying the well-known Bosch name. The Bosch consumer-centric approach to innovation, quality and sophisticated product development ensures the Tassimo system will continue to be made to exacting performance standards.

"We're excited about this new alliance. Both the company and the Bosch brand are an excellent fit and perfectly complement our plans to continue expanding the Tassimo system's benefits for consumers," said Kraft's Weber.

Though mutually successful, Kraft and Braun, the current distributor of the Tassimo brewer, together decided to end their partnership effective June 30, 2008. "The Tassimo contract was signed before Procter & Gamble (P&G) acquired Gillette/Braun," said Bracken Darrell, Braun president. "Since Kraft and P&G are coffee competitors, both our companies have agreed that continued partnership on Tassimo could interfere with the future growth potential of our respective coffee businesses."

Both companies are fully committed to continued strong support and results for the holiday 2007 sales period and through mid-2008, when Braun will stop distributing Tassimo brewers. "With their expertise in manufacturing, distribution and retail sales, Braun has been a valued key partner in establishing the quality Tassimo brand globally. As such, we know they'll work closely with us and with Bosch to ensure a seamless transition to the Bosch brewer next year," said Kraft's Weber.

The patented T DISC will not change and will be compatible with both the current Braun and future Bosch brewers. Braun will continue to provide full after-sales service to Tassimo consumers who own a Braun brewer.

Contemporary new beverages
Tassimo is the only system to use liquid milk technology to make coffeehouse beverages, such as cappuccino and latte, from the comfort of home. Tapping into consumer trends on both sides of the Atlantic, Kraft is expanding its milk-based offerings to include specialty drinks like Latte Macchiato and Twinings Chai Tea Latte.

"When we see a beverage skyrocket in one geography, we're moving quickly to expand its availability to other countries," said Weber. "In Germany, Austria, Switzerland and the U.K., we've seen our Latte Macchiato take off in less than six months and become one of our best selling Tassimo products. We're bringing this indulgent, layered espresso and milk beverage now into France and in the U.S. via the Tassimo website."

"Overall, we're excited about the momentum and continued sales growth of Tassimo," said Weber. "Our consumers are happy; more than 90% of them state they would recommend Tassimo to friends and family. We'll continue to work closely with our business partners to bring further innovation and profitable growth to the on-demand hot beverage category Tassimo helped establish."

From the September 10, 2007, Prepared Foods e-Flash