Issue link: https://read.dmtmag.com/i/491371
36 STiR tea & coffee industry international T By Dan Bolton he outcry continued through the peak holiday sales months but Keurig Green Mountain weathered the criticism of customers, content in the knowledge its "lock out" strategy had successfully convinced hold-out coffee roasters to buy licenses to produce the new 2.0 capsules. Retailers bought in big, ordering millions of the new machines for the fall launch. This forced the hand of competitive coffee brands hoping to maintain retail distribu- tion. There are now so many competing single-cup brewers vying for kitchen space that it is too early to know whether retailer's investment in the latest carafe brewers will be profitable. Keurig is doing just fine, reporting $4.7 billion in sales. Keurig continues to dominate the segment, selling 9.8 billion portion packs and 10.4 million of its own brewers. Licensed partners like Cuisinart sold another 500,000 through Sept. 27. Portion pack sales grew 22% to $949 million in the latest quarter. Eight months ago private-label capsule sales were approaching 20% market share. It is now clear the potential for runaway growth of non-licensed coffee portion packs has been curtailed at 10% market share. Convincing coffee giant Kraft Foods Group to license leading brands Maxwell House, Gevalia, and Yuban added 6% market share to the licensed segment. Add to this former private-label retailers Target and BJ's Wholesale Club, Peet's Coffee & Tea, grocers Meijer, and the 3,336-store SuperValu retail and distribution chain. Keurig and its partners now supply 89% of capsule value in a market expected to reach 12 billion capsules in 2015. Capsule sales currently exceed 28% of the entire $11.2 billion retail coffee market by value, according to Packaged Facts. While all of the major national roasters are now licensed, non-licensed private-label remains strong in grocery chains including Kroger and Safeway. Private label is also doing well in the foodservice segment at national chains such as Panera Bread whose capsules are supplied by Distant Lands coffee. Non-licensed capsules typically sell for 25-40% less than licensed K-Cups. Restau- rants, resorts, and convenience stores are offering single-cup options along with small coffee chains and custom roasters. The latter, led by TreeHouse Foods, Rogers Family Coffee, and Canada's Club Coffee as well as Ontario-based Mother Parker's quickly Big Retailer Buy-in Shields Keurig 2.0 Keurig brewers stacked to the ceiling at Bed Bath & Beyond SuperValu licensed its private label