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Coinstar Tests Seattle's Best Coffee Vending Machines

Posted On: 2/22/2012

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BELLEVUE, WA -- Coinstar Inc. said it is testing Seattle's Best-branded coffee vending machines through a partnership with the Seattle-based roaster. It expects to have about 500 machines installed nationwide by year's end.

The 3x3-ft. bean-grinding, cup-at-a-time kiosks are slated for supermarkets, gas stations and office buildings, according to a recent article in The New York Times. The move harkens back to the company's "4th Wall" front-of-store strategy intended to create profit centers at the front of supermarkets and other retail outlets in "real estate" that typically lay dormant or underutilized.

Coinstar currently occupies that space with its $1.20-a-night Redbox movie-rental kiosks and namesake self-service coin-counting machines. The company sold its bulk vending and coin-op division, a former big part of that space, in 2009. With more than 35,000 Redbox machines nationwide, Coinstar is the biggest renter of home videos in the United States. About 85% of the Bellevue, WA, company's $1.85 billion in revenue last year was generated by Redbox.

Coinstar has 20,000 of its coin-counting machines installed inside grocery and other retail chains.

Coinstar's Redbox unit recently announced a partnership with Verizon Communications to launch a service that combines DVD and streaming movie options in a bid to secure its dominance in the movie-rental space as consumers continue to opt for online movies rather than renting DVDs. | SEE STORY

Redbox also moved to strengthen its position in physical rentals with its proposed $100 million acquisition of the entertainment business of NCR, which operates DVD rental kiosks that operate under the Blockbuster brand. | SEE STORY

Identifying the next big front-of-store self-serve applications -- like coffee venders -- to deliver customers new services also remains an increasingly important part of Coinstar's growth strategy. It's testing a kiosk in eight retail locations in Texas and California called Gizmo, through which it sells used video game consoles, iPads and other electronics. It's also testing ecoATM, a kiosk created by a startup in which Coinstar invested that allows consumers to trade in old cellphones and other electronics for cash. | SEE STORY

Coinstar chief executive Paul Davis said that the company has nearly a dozen kiosk concepts in various stages of development.

Seattle's Best Coffee LLC has been roasting premium coffee since 1970 and today turns out more than 20 million pounds annually. A featured brand within Starbucks Corp., Seattle's Best Coffee is now served at more than 50,000 locations.

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