Published July 1, 2021
For many of us, our morning cup of coffee is the first thing we think about when we wake up. But sometimes, you just don’t want to go through all the effort of making coffee, you want—and maybe even need—to have a cup in your hands as soon as possible. And, with the invention of K-Cups® making coffee takes minimal effort.
In fact, K-Cups® are one of the easiest ways to make a cup of coffee. All it takes is a couple of minutes and you’ve got yourself a fresh and delicious cup of coffee. Did you know that there are more than 25 million Keurig and K-Cup® brewers installed in homes and offices across the U.S? It’s true, people like their coffee quick and easy in the morning. There are many benefits to using K-Cups®, but the main appeal is the ease of making a single serving of coffee without all the mess or brewing a whole pot.
Because of this, the K-Cup® industry is only bound to grow. In this post, we’ll be discussing the growth of K-Cup® usage, why single-serve coffee grew in 2021, and what the K-Cup® industry looks like now. Keep reading to learn more about why you should consider adding custom K-Cups® to your product offering.
- The Growing Single-Serve Coffee Industry
- Why Did Single-Serve Coffee Pod and Brewer Usage Increase in 2020?
- What Does the Future of the K-Cup® Industry Look Like?
- Should You Start Selling Your Own K-Cups®?
- Take Advantage of K-Cup® Market Growth
The Growing Single-Serve Coffee Industry
The K-Cup® market is undeniably growing, but why? And specifically, why has K-Cup® usage increased so much in the last year?
People are making single-serve coffee for themselves at home now more than ever. Since the large shift to remote working, many people no longer had a reason to stop at their favorite coffee shop on the way to work and instead decided to make it themselves. And what’s the easiest way to make a cup of coffee at home? With a Keurig, of course.
Approximately 42% of American households own a Keurig, and 2021 consumption is expected to surpass 30 billion K-Cups® annually. The K-Cup® market is clearly on the rise, and it doesn’t look like it’s stopping anytime soon. With this in mind, it might be a good idea to get your foot in the door now and expand your product offerings to include K-Cups®.
K-Cup® Usage Before COVID-19
The coronavirus pandemic clearly had a big impact on the growth of K-Cup® usage, but let’s see how this usage compares to pre-pandemic.
Since the pandemic, at-home coffee has grown substantially as people across the country had to adjust their coffee drinking habits. According to a 2020 Sprudge survey, before the pandemic, people were drinking an average of 2.45 cups of coffee a day. Now, consumers have an average of 2.77 cups of coffee each day. That’s a 13% increase in just over a year. Coffee retail sales growth also skyrocketed during the peak of the pandemic to a whopping 29%, which is a huge increase compared to the 1% sales rate pre-pandemic at the end of 2019.
K-Cup® Usage During COVID-19
According to the Piper Sandler U.S. Coffee Industry Update from May 2020, usage has definitely increased during COVID-19. There has been a 7% increase in weekly average sales of single-serve coffee during COVID. Keurig saw a record number of sales during the pandemic. People needed their coffee quick and easy, and Keurig was there for them during those dark times by being the light at the end of the tunnel: a nice, warm cup of coffee that you can make at home in minutes.
In addition to Keurig, other brands saw this growth of K-Cup® usage and decided to create their own. For example, Starbucks and Dunkin’ had to create their own coffee pods in order to compete with Keurig’s rise.
Why Did Single-Serve Coffee Pod and Brewer Usage Increase in 2020?
The single-serve coffee market share increased in 2020 for a few reasons, including:
- More people working from home: People wanted a quick and easy way to make coffee from their own homes since it was inconvenient, or even impossible for some, to go to their favorite coffee shops. Remote working will continue to have a long-term effect on people’s daily habits, including how they make coffee.
- People are more cautious about discretionary spending: People are more aware of their spending habits and are making conscious choices to save money, such as not going out for breakfast, not buying Starbucks, etc. During the pandemic, consumers spent way more on coffee online or at stores than they did on away-from-home coffee. Consumers were less likely to drink away-from-home coffee during the pandemic, and it may continue to be a lower priority going forward, as only 35% of consumers would prioritize drinking coffee at a restaurant post-pandemic—according to the Piper Sandler U.S. Coffee Industry Update from May 2020.
- More consumers buying coffee directly: During the pandemic, there was a huge shift to buying coffee at grocery stores so it could be made conveniently at home. According to the Piper Sandler U.S. Coffee Industry Update from May 2020, almost all packaged coffee sub-categories experienced a 20% growth over this period. Single-cup coffee retail sales increased from 1% pre-COVID to 20% during COVID.
- People are becoming more sustainability minded: The pandemic made us more aware of sustainable measures we should take, including the way we drink coffee. If you’re interested in creating your own K-Cup® pods, Intelligent Blends offers a high-quality, sustainable option to get you started. Intelligent Blends K-Cups® are certified recyclable, with 100% recyclable packaging cartons as well.
What Does the Future of the K-Cup® Industry Look Like?
The future of the K-Cup® industry is bright. The United States coffee pods and capsules market is projected to grow at a compound annual growth rate of 3.1% between 2020 and 2025. The coffee pod industry was valued at $25.07 billion in 2020 and it’s projected to grow even more going forward.
Experts predict the K-Cup® industry to continue to grow because of the increase of at-home single-cup coffee usage. There’s a reason why it seems like every coffee shop now sells their coffee in bags or K-Cups®—they had to compete with K-Cup® market growth.
The quality, efficiency, and wide range of coffee choices are all responsible for single-serve coffee growth. Consumers who make coffee at home are more likely to buy coffee machines that are compatible with K-Cups®, thus contributing to the growth of K-Cup® usage. Coffee pods are desirable essentially because they are easy and quick to use, but you still get good coffee from it.
However, with the growth of K-Cup® usage also comes an increased demand for sustainable and organic practices. Even with the sudden growth, sustainability is still important for both buyers and retailers and organic is now a necessity. Consumers also want higher-quality coffee in their K-Cups®, with coffee selected from various origins.
In order to succeed in this competitive landscape, there are a few factors you should take into consideration. Focus on product innovations, high distribution networks, limited-edition K-Cups®, and better supply chain management to give you a competitive advantage.
Should You Start Selling Your Own K-Cups®?
So, should you start selling your own K-Cups®? The answer is clearly yes. Right now is a great time to get into the K-Cup® market, considering how much it’s growing and is projected to grow. There’s no time like the present to capitalize on this trend.
Ready to create your own K-Cups®? Intelligent Blends can help. With Intelligent Blends, you can customize the blend of the coffee, as well as the design to fit your brand. For K-Cups® that stand out, Intelligent Blends has invested in innovative K-Cup® design, including updates that maximize extraction and prolong freshness. As a leading private label coffee manufacturer, we also have a K-Cup® research and development team, who can work with you to create unique blends for your line.
Take Advantage of K-Cup® Market Growth
If you’re considering adding K-Cups® to your brand’s offer, now is the time to take advantage of this impressive market growth. The single-serve coffee industry grew substantially in the past year, and it’s only going to continue to go up from here—don’t miss your chance to find new customers and grow your business.
Intelligent Blends is a great resource to help you provide your customers with convenient single-serving coffee options, including branded K-Cups®. Contact Intelligent Blends today to get started. We make expanding your private label coffee line easy from start to finish. From designing the packaging and creating your own custom blends to distribution, partnering with Intelligent Blends is a smart way to take advantage of this new business opportunity.