Time, effort, and convenience often direct consumer choices, and the way consumers make their coffee in the morning is no exception. Over the last few years, single-serving coffeemakers have stepped in to serve consumers while taking into account those three essentials, and the technology has expanded rapidly ever since.
Keurig Green Mountain, arguably the most prominent face of single-serving beverages and food, pulled in $4.7 billion in revenue for fiscal year 2014—much of which the company attributed to its single-serving K-Cup technology. Keurig has signed deals with everyone from Coca Cola Co. to Dunkin’ Donuts, and with a new device in the wings, the company and single-serving commodities show no sign of slowing.
Not to be outdone, the leader in single-serving coffee machine and capsule sales, however, is Nestle SA, the world's largest coffee (and food) company, and its Nespresso devices. However, coffee's fastest-growing market, single-serving coffee, accounts for less than one-fifth of the company's revenues, while roast and ground coffee account for more than 40%. Even massive retailers like Starbucks have hopped onboard with its proprietary Verismo single-serving coffee machine.
The question is, what type of effect will single-servings have on the food industry in the future? As single-serving pod technology continues to post remarkable sales, it seems that this new food craze is here to stay.
But does the prominence of single-serving coffee come at a cost, particularly to the environment? And does it say anything that Keurig’s co-founder John Sylvan doesn’t own a Keurig machine himself?
Welcome: Keurig Kold
Keurig Green Mountain has announced its newest countertop single-serving drinks device: the Keurig Kold, which is set to launch in fall 2015. Instead of its traditional hot drinks and foods, the Keurig Kold makes—you guessed it—cold drinks in both the carbonated and noncarbonated variety using the same K-Cup technology.
Keurig has already signed on several companies to supply the device’s initial selection, including Coca Cola Co., who increased its stake in the company last year, and Dr Pepper Snapple Group. Keurig is also offering its own proprietary brands to round out the first wave of cold drink pods.
The explosion of single-serving coffee pods
Keurig K-Cup sales have been massive over the past year, with Keurig reporting a 22% increase in K-Cup sales. This has been due in part to its successful original Keurig machine, which has attracted more than just coffee and other assorted beverage partners, most recently including DS Services of America and the K-Cup version of its coffee, Javarama.
But K-Cups have also lured in food partnerships as well, including General Mills’ Nature Valley Bistro Cups Oatmeal, though Keurig was not involved in the deal. Now with Keurig Kold and the chilled K-Cup technology, it’s likely that those sales will be driven up further.
Single-serving pods' effects on the environment
The rise of single-serving coffee pods have been all well and good for the single-serving beverage and food industry, but how has the environment fared as a result? K-Cups, for example, are not recyclable or biodegradable, and with pod-based coffee machines in nearly one-third of American homes, that’s a lot of single-serving pods ending up in a landfill.
Because many single-serving coffee pods are made of several different plastics, many feel it is unlikely that they will ever be truly recyclable in their current state. Keurig cofounder Sylvan laments that the expensive technology produces too much waste and bears a heavy cost for both the environment and consumers.
Proponents of single-serving pod technology and machinery do have merit. Pod machine users can save electricity by making single-serving hot drinks instead of using constant electricity to keep a pot warm for extended periods of time. Also, using single-serving pods means coffee grounds are being used more efficiently to extract more coffee from each bean. Proponents say this is crucial because coffee beans need a lot of water to be harvested, and every time a cup of coffee does not extract as much coffee from the bean as possible, the water needed for that harvest has been wasted.
How single-serving companies are addressing environmental issues
Maybe there’s hope? Keurig came out with a statement on its website that it is “committed to making 100% of K-Cup packs recyclable by 2020.” Still more recently, Keurig debuted a partially recyclable travel mug-sized coffee pod, called the K-Mug.
Other companies are taking the initiative as well. In April of last year, Mother Parkers Tea and Coffee became the most recent business at that time to make single-serving pod technology less harmful to the environment with its EcoCup, a clear, recyclable pod. Trader Joe's makes a recyclable pod and encourages consumers to dump out the unused grounds on acid-loving plants, like roses and tomatoes. OneCup from Rogers Coffee & Tea Market is 97% biodegradable and comes in several varieties.
Single-serving pods have had a massive impact on the food and beverage industries already and have attracted many big-name companies that aim to capitalize on this surging movement. The next question for these companies, particularly single-serving pod creators, will be how they can cut costs to consumers and the environment in the future to keep the single-serving trend alive.