Starbucks (SBUX) and Kraft (KFT) play to the home crowd

Starbucks (NASDAQ: SBUX) seems to be having trouble getting large increases in traffic to its U.S. stores. At least Wall Street thinks that. The company's shares have the bruises to show it; after trading above $40 last November, the stock now moves above $27 on a good day.

Starbucks would at least like to show that it can sell its coffee in someplace other than its stores so it is teaming up [subscription required] with Kraft (NYSE: KFT). The food company makes high-end home coffee brewing machines. The king of these is the Tassimo. The device takes inserts of various kinds of coffee and makes individual cups. According to the FT, the "pod" systems – machines that use small pods of ground coffee and also take tea and hot chocolate – are in great demand.

According to the National Coffee Association, "77 per cent of coffee consumers drink at home today compared with 74 per cent a year ago."

Will selling coffee in "pod" machines and stores cure what ails Starbucks? Maybe not, but its current plan for building more stores does not appear to be popular with investors.

Douglas A. McIntyre is a partner at 24/7 Wall St.