P&G Brews $50 Million Launch for Home Caf

In a bid to take on Starbucks Corp., Procter & Gamble and four appliance marketers have joined forces to launch Home Café single-cup brewing system in May with a $50 million-plus campaign.

Other packaged goods companies are not far behind, with Kraft Foods, Inc. and Sara Lee Corp. reportedly planning their own version of the single-serve machines. Kraft was expected to make an announcement this week.

P&G and appliance marketers debut single-cup brewing system

Meanwhile, this spring, P&G will roll out Home Café versions of Folgers and Millstone single-serve "pod" packages designed specifically for the pressure-brewing system that forces hot water through ground beans at high pressure. The process, common in coffeehouses, makes a single cup of coffee in one minute. Packages of 18 Folgers or 14 Millstone pods will sell for $4.

P&G worked with Black & Decker and Krups to create the Home Café appliance, which bows in May (via Black & Decker) with a $60 price tag. Krups and marketing partners Sunbeam (Mr. Coffee) and Hamilton Beach will follow with their own Home Café appliances later this summer, in mass-merchandise, supermarkets and specialty stores. The four account for 75% of U.S. coffee appliance sales.

Cincinnati-based P&G's market share is almost 35% of the U.S. coffee bean category. The partnership is a first between coffee and appliance marketers.

All parties collaborate on the $50 million campaign with TV and print ads, a sweepstakes, in-store merchandising and other consumer promos. Consumers can join Club Café at www.home-café.com for e-mail and direct-mail offers. Saatchi, New York City, is lead agency on the launch.