In the News

Achart1“K-Cups® have driven all of the growth in the coffee category since mid-2012”

Between 2009 and 2013, traditional roast and ground volume declined by 1 percent compound annual growth rate (CAGR), while K-Cups grew at an 80 percent CAGR. The trend continues in 2014 and beyond, with reports indicating that single-serve is now accounting for nearly 41% of ground coffee sales. It’s estimated that 15 billion k-cups® will be consumed in 2014. From the smallest roasters to biggest brands the single-serve beverage market is exploding with growth.

SINGLE-SERVE MARKET UPDATE – August 13, 2014

  • Single serve is the fastest growing grocery SKU in North America for 2 years running.
  • It’s estimated that 15 billion k-cups® will be consumed in 2014.
  • Coffee Volumes Have already Outpaced US Food Volumes for 2014.
  • Intelligent Blends LP introduced Recyclable Single-Cups and has since packed tens of millions of eco-friendly cups for brands and roasters all over the US and abroad.
  • Intelligent Blends LP wins SCAA People’s Choice Award for Best New Product in Packaging for the #5 Recyclable Eco-Friendly Capsule.

Increased Convenience & Availability: Single-Serve Driving Overall Coffee Consumption

Achart2

  • Single-serve (K-Cup) coffee sales accounted for 30 percent of dollar volume in coffee sales according to a Morgan Stanley Research report.
  • Coffee category growth is being driven by increased coffee consumption particularly in new consumption formats. In 2013, coffee consumption stood at 23.4 lbs/capita, 4% above the 15-year average, but up more than 10% since 2008, aided by improving economic dynamics and the rise of the single-serve category, which has dramatically increased the convenience and availability of coffee drinks.
  • Overall coffee consumption has increased more than 10 percent since 2008, driven by the rise of the single-serve category.
  • Between 2009 and 2013, traditional roast and ground volume declined at a 1 percent compound annual growth rate (CAGR), while K-Cups grew at an 80 percent CAGR.

NEW SINGLE-CUP BREWERS: Machines to Drive Rapid Growth of Single-Serve in 2o15

  • The “open platform” k-cup® has become the accepted standard for single-cup brewing and is most certainly here to stay. Dozens of companies are introducing new “open platform” k-cup® brewers with innovative technology. These beautifully designed machines built from the ground up to produce truly superior beverages are expected to be released from Q4 2o14 to Q1-Q2 of 2015.
  • There are more than 25 million Keurig® and K-Cup® Brewers installed in homes and offices across America with millions more being sold each year.
  • Single-serve brewer household penetration rates in the largest cities in the US range from approximately 23% to 7.5% with highest average penetration rates in the Northeast and lowest on the West coast. The national average household penetration rate was approximately 12% as of 2013. NCA (National Coffee Association) data suggests that the most valuable markets are located on the west coast as a result of high population and lower percentages of household penetration for single-serve brewers.
  • BUNN® is introducing the MCO model, which is their biggest and best k-cup® commercial brewer yet. Intelligent Blends was one of the first companies to receive the new MCO model and we feel that it is the premier commercial single-cup machine on the market. Great for your medium to large office coffee customers or other commercial applications, these machines are  good looking reliable work horses capable of brewing hundreds of cups per day while offering all of the benefits and convenience of single-serve. Contact us for information and pricing.
  • The number of commercial customers converting to k-cups® also continues to climb as more high quality options become available at attractive prices.

KEURIG® 2.0: The Facts About Keurig Green Mountain’s New Brewers Using DRM (Digital Rights Management) Technlogy

Achart4American coffee-drinkers living in the Age of the K-Cup® will soon discover everything that means. Over the past 5-7 years, single-serve, instant-brew coffee and beverage capsules — commonly called K-Cups® — have taken over more than a quarter of the U.S. ground coffee business. It seems as though the rise of the K-Cup® is unstoppable with reports of the growing product category worth billions.

Seeing market share go away, GMCR’s answer is to introduce a new generation of brewers that “lock out” any competition. Your freedom of choice and day-to-day brands of single-serve coffee/beverages that are not produced by Green Mountain Coffee would become a thing of the past if it were up to them, because this fall Keurig plans to launch a new system — Keurig® 2.0 — that will use DRM (Digital Rights Management) technology, which means unlicensed single-serve cups won’t work with these new machines. That being said, industry insiders are already discussing the fact that at least one of Keurig Green Mountain’s largest unlicensed competitors has already “cracked the new cup technology” and many more either have access to or are currently developing solutions to deal with potential issues in compatibility with these new machines.

The Keurig® launched and became wildly successful on its ease of use and convenience and now it’s spouting new stipulations to hold onto its market share. Unfortunately, the stipulations come at great costs to consumers as there is no benefit to being forced into buying only from one company. Think about taking your Ford car to the dealership for new tires only to learn that regardless of price or quality the car’s original brand of Ford tires are your only option and that all other brands like Michelin Tires, Goodyear Tires, or Yokohama Tires will not work on your car for no good reason. I don’t think that’s fair or a good business practice and you would probably agree. The current market trend (Third Wave of Coffee) doesn’t in any way suggest easy acceptance or adoption of the “big business” mass produced and digitally protected coffee capsules that the new Keurig® 2.0 brewers will need to function.

We scouted out the latest and greatest k-cup® compatible brewers at the 2014 International Home + Housewares Show in Chicago and are happy to report that there are well over a dozen new open platform brewers coming to stores very soon. Companies including Remington, Touch Beverages, Hamilton Beach and many more are introducing advanced and beautifully designed machines beginning in late 2014 and Q1 of 2015. These innovative brewers offering “open platform” use accept ALL types of k-cup® beverages, some even capable of brewing larger size carafes. With these new k-cup® brewers on display at the International Home + Housewares Show, Keurig® 2.0 is sure to be facing some serious and immediate competition.

  • Keurig’s new line of Brewers using DRM (digital rights management) technology are potentially the biggest change in coffee-brewing technology since Mr. Coffee. Unfortunately, the change comes at great cost to consumers as owners of these new brewers will no longer enjoy the freedom to choose from the hundreds of current varieties of single-serve cups not manufactured by Keurig Green Mountain to mention those emerging in the future.
  • GMCR won’t elaborate on how exactly how it works, except to say that the ink is proprietary and inspired by counterfeiting technology used by the US Mint. Ian Tinkler, Keurig’s vice president of brewer engineering, has gone into a bit more detail, explaining that an infrared light shines on the ink marking (present on the rim of new k-cup® capsule lids) and registers the wavelength of the light reflected back.
  • TreeHouse’s complaint (pdf) alleges that Keurig’s new brewing machine and efforts to phase out the older models will force consumers to pay 15% to 25% more for K-cups.

Looking to 2015 and beyond, the dramatic increase in number of available k-cup® compatible brewers along with a reduced baseline brewer cost means higher household penetration rates. With no lack of consumer awareness for single-serve coffee brewers, we’re expecting new machine sales to spike once they hit the retail shelves. Supporting ongoing predictions for growth of the single-serve beverage market in the US and abroad, we see tremendous opportunity in supplying this thirsty market with a growing variety and elevated quality of beverages made to work in these advanced machines.

Sources: IRI C + MULO, Morgan Stanley Research; Euromonitor, Morgan Stanley Research

Keurig® and K-Cup® are registered trademarks of Keurig Inc., a wholly owned subsidiary of Green Mountain Coffee Roasters, Inc. Intelligent Blends and our brands are not affiliated with Green Mountain Coffee Roasters Inc., or Keurig Inc.


SIDEBAR-IBSo if you’re feeling like you have a great product and you want to try your hand in the single-serve market, contact us now to learn more about our turnkey k-cup® production facility. Roasters from all over the US and abroad are already experiencing tremendous success with their single-serve cups, so much so that we’re adding a full second production line boosting capacity to over 200 million cups per year.

Contact Us to Request Pricing and Minimums

Here’s exactly what you do to start the process:

  1. Talk to us. We’d love to learn more about your needs and ideas and will happily share pricing and minimums with you.
  2. Send us 1lb of coffee or a sample of your tea or other product and we’ll grind it to perfect specifications and quickly seal the fresh product in single-cups to send you back for sampling.
  3. Download our design template for lids and boxes and feel free to ask us for help along the way! Our in house graphic arts lab is a fantastic resource.

Single-Serve Solutions

Sample Your Product in Single-Serve Cups!