Issue link: https://read.dmtmag.com/i/716988
46 STiR coffee and tea / Issue 4, 2016 (August/September) By Dan Bolton ingle-cup turns 30 this year and it is in the prime of its life. In the US single-cup brewers vaulted from office coffee obscurity to become the second most common method of coffee preparation by 2012. Household penetration is at a new high of 29%, according to the Na- tional Coffee Association's just released single-cup report. Twenty-eight per- cent of past-day drinkers rely on a single-cup brewer to make their brew and 18% of coffee drinkers say it's the only way they know how to make coffee. More telling is that single-cup globally is the method of choice for both espresso and drip coffee drinkers. In Europe legislation and judicial rulings have combined to unclench the tight grip that Nestlé once enjoyed following its 1986 introduction of the first Nespresso capsule and brewer system. Nespresso continues to sell $5 billion worth of the brewers and coffee capsules annually but tellingly, growth has slowed in favor of the Dolce Gusto capsule, also made by Nespresso but marketed at a lower price. In July the Portuguese Intellectual Property Court ruled that a Bicafé de- signed capsule compatible with the Dolce Gusto system does not infringe on the exclusive rights claimed by Nestlé. The decision frees Bicafé and others to continue producing and marketing compatible capsules for Nestlé's private- label rivals. In the US the typical profile of single-cup a owner shows them to be 18-39 years of age with higher than average incomes and kids at home. The majority live in the Northeastern US. They are more likely to drink gourmet coffee, tea, sports drinks and energy drinks and they are less likely to drink juice, accord- ing to the NCA's National Coffee Drinking Trends (NCDT) report. Use of drip coffee makers continues to decline. Today only 50% of past- day coffee drinkers say their past-day coffee was prepared using a drip brewer. Last year 12% reported using an expresso machine to prepare their previous- day coffee, up from 9% in 2015, according to NCA. Ten percent of those who do not use a single-cup brewer say they will "definitely" buy one. Last year 59% of those who bought a single-cup brewer did so for themselves with 12% saying they intend to present one as a gift. Currently 22% of single- cup brewer owners report having owned more than one system. In the US the sale of publicly-chided Keurig Green Mountain for $92 per share to JAB Hold- ings closed in March leading to a quiet period now that the company is no longer traded. Keurig in- troduced K-Cups in 1998 earning $5 billion by 2015, according to its last public earnings report. Following the sale JAB quietly dumped the Keurig KOLD carbonated soda machine and the controversial 2.0 system that was designed to ac- cept only Keurig-licensed capsules. Major players representing 80 brands, in- cluding Starbucks, continue to rely on Keurig to manufacture and market their K-Cup lines. That will change in time. Starbucks threatened to fill its own capsules after the sale but has since made peace with JAB which also owns rival coffee chains Peet's Coffee & Tea, Caribou Coffee and boutique roasters Stumptown and Intelligentsia. Now that single-cup accounts for more than a third of total coffee value, even the smallest roast- ers must consider capsules and either contract with co-packers or buy their own filling equipment. Several manufacturers are marketing inexpen- sive capsule-filling machines that cannot make shelf-stable, nitrogen-filled capsules. These are popular with small-batch roasters who encourage quick consumption of their fresh roast. Another advantage is the fact that open-sided capsules can be made of recyclable #5 plastics and eco-friendly bioresins. Neither provides as sound a freshness barrier as the K-Cup but roasters ben- efit from a positive consumer response. Mintel International reports that while a third of the public has no interest in buying a single-cup brewer, among those who do the third most cited concern is the amount of waste generated. Currently even compostable-certified capsules are not permitted in green waste disposal bins. Single-cup is Here to Stay Nespresso compatible capsules by Lofberg Bicafé capsules for Dolce Gusto brewers S