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Redbox Operator Coinstar Tries Coffee Dispensers

Coinstar, after winning with Redbox DVD kiosks, tries coffee machines

Coinstar, which helped topple Blockbuster with its $1-a-day Redbox DVD kiosks, is now trying the same approach in the coffee market, installing dispensers to pump out cheap, fresh-brewed mochas and lattes at the corner store. The bright red Rubi box, standing 81 inches high and occupying 9 square feet, grinds arabica beans from Starbucks’s Seattle’s Best Coffee brand and brews a fresh 12- or 16-ounce cup of java through a one-minute process that mimics a French press. Coinstar managers view the $28.5 billion out-of-home coffee market as ripe for a player that can offer the same features that made Redbox the largest U.S. DVD rental service: low prices and convenient locations.

“The coffee market is enormous,” says Ken Redding, a Starbucks veteran who is general manager of Rubi. “The market is very much about convenience and desire. We’ve built a platform that can be in arm’s length of desire.”