Today’s post is by Gayl Southard, Administrative Consultant for SafeSourcing.
We asked for a Keurig for Christmas. Although we love the convenience of the coffee brewing machine, we have found out a lot along the way.
Green Mountain Coffee Roaster bought Keurig in 2006 for $160million. The National Coffee Association reported that Keurig Green Mountain is the biggest change in coffee-brewing since Mr. Coffee in the 1970’s. The method of brewing coffee by injecting hot water into a plastic pod has quickly rivaled drip coffee. It is a faster and more convenient way to brew coffee. People in the workplace got used to a Keurig in the office and began buying them for their home.
Keurig’s patent on K-Cups expired in 2012. This has opened doors for many companies to make pods at cheaper prices. Private-label cups went from 7 percent of the market to 14 percent in the second half of 2015. Credit Suisse reported the sales of private- label cups increased by 203 percent over last year, while Keurig’s Green Mountain cups grew by only 12 percent (keep in mind, they had the monopoly previously).
Keurig’s business model was built on selling the coffee units cheap, but with the intention of recouping their money on the K-Cups. “Keurig is trying to establish a technological one: its new brewer, which goes on sale this fall, has a mechanism that scans each pod for Keurig’s markings and locks out any unapproved capsules. It’s essentially digital rights management (DRM) –a mainstay in music and video – adapted for coffee.” Currently, the Keurig literature tells the consumer to buy only Keurig-approved pods. Many food companies have tried to get a piece of Keurig’s single-cup coffee market. Starbucks, Nestle, Kraft Foods are a few examples. Currently these companies are packaging K-Cups for Keurig.
A big reason why K-Cups are preferred is because you know you are drinking fresh coffee. Keurig grinds the beans in a factory, flushes them with nitrogen, and seals them in air-tight capsules. Oxidation is what makes coffee go stale. The second appeal to K-Cups is the convenience. You can’t mess up! Unlike brewing a whole pot of coffee in a traditional coffee maker, you can brew single cups of coffee, decaf coffee, as well as flavored coffees—pleasing everyone’s taste. Although pods are convenient, they are much more expensive in the long run than brewing coffee. The environmental concerns of disposing these plastic cups are significant.
For more information on how the team at SafeSourcing can help your company, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.