STiR coffee and tea magazine

Volume 3, Number 3

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new untapped "early majority" segment of the market will adapt to the low cost unlicensed cups, which will drive our open platform brewer sales so long as our brewers are priced competitively with Keurig 2.0," he said. "The first 15% of the market met Keurig's value proposition because they are more affluent than the untapped "Early Majority" segment of the market. I can certainly see the existing base of customers converting to Keurig 2.0 once their old brewers break down, but I am not sure about the new "Early Majority". Keurig is making this big untested assumption… but what if Keurig's assumption is wrong? he asked. We will soon find out, as the new Keurig 2.0 brewers will start shipping in late August of this year. A dozen single-serve home brewer manufacturers seem to agree. Last month there were 24 new models on display at the 2014 NAMA OneShow (National Automatic Merchandising Association), the trade association that represents the vending and refreshment services industry. Joann DeNardis director of education/certification said NAMA revised its Quality Coffee Certificate Program this year to include single-serve evaluation process so participants can lever- age the growing the single-serve market segment. NAMA's guided tasting experience showed how much the slightest change in the brewing formula can alter the taste of the final cup. Oh's Touch Brewers make coffee from all K-type cups and a new 15-gram XBold Cup™ he invented. An adapter accommodates a Super Cup™ that holds 18 grams of coffee, sufficient to fill a travel mug. His Jumbo Cup™ holds 30 to 35 grams of coffee to brew up to a 30 oz. pot. And with the Supercharger Kit, even the Super Cup™ can be brewed with a Keurig brewer. The brewer heats the water in 20 seconds from a cold start and delivers an 8 oz. cup in less than a minute, a quick response compared to a Keurig which requires three to four minutes just to heat the water. Water pulsates through the cup in a Touch brewer and actually takes longer than a Keurig to brew which leads to a better extraction, he said. Touch will launch three brewer models in early Fall, which will retail from $149 to $179. In 2012 Hamilton Beach introduced its K-Cup compatible FlexBrew and has since ex- panded distribution to more than 15,000 retail outlets. These machines accept ground coffee, capsules, and pods as well as K-Cups. The latest version brews a carafe and single cup and sells for $99. The single brewer retails for $49. Use of drip brewers at home has fallen to 53%, down from 58% last year and from nearly universal adoption at the height of the Mr. Coffee era. In 2004 only 27% of those who drink coffee would consider buying a single-serve machine. NPD estimated sales of single serve would amount to "only about 5% of the total 24 million coffee machines sold in the US each year." "Keurig® compatible products have achieved the critical mass needed to cross the line from specialty to mainstream. What started in the late 90's as a niche specialty product has snowballed into one of the most exciting consumer products of the past ten years," according to Ottawa, Canada-based Single Cup Coffee, a firm that manufactures a 1 billion cups per year for brands like Guy Fieri, Hurricane Coffee, Cake Boss, Donut Shop and Brooklyn Bean Roastery. NPD Group reports U.S. sales of single-serve brewing systems grew 8% to $930 million last year. The Los Angeles market saw gains of 24% and Houston 20%. Innovation makes all the difference. The home beverage machine category is in its infancy and showing every sign that beverage dispensers and brewers will eventually find a place in 40 to 50 million kitchens. Which brewers and brands will dominate and at what price is still up for grabs.

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