STiR coffee and tea magazine

STiR coffee and tea 37 Very often/sometimes drink coffee for this reason Total Single-Cup Non-Single-Cup Owners Owners (2,233) (732) (1,501) When I need to wake up 78% 83% 75% When I need to warm up 74% 79% 72% When I need an energy boost 66% 71% 64% When I want a treat 60% 67% 57% When I need energy that lasts for some time 60% 66% 57% When I need a relaxing moment 59% 64% 56% When I need to focus 58% 64% 55% When I need a break during the day 56% 63% 52% Source: National Coffee Association 2016 Single Cup Brewing Changing Behaviors and Attitudes Reasons for Drinking Coffee Single-Cup Owners vs. Non-Owners burner, and Turbocharger pods all taste just fine. Under new management Keurig fo- cused on sourcing, roasting, and pack- aging coffee. Lawsuits, intimidating dis- tributors and patent battles are in the past. Efficiency is in. Prices of nationally branded capsules from Folgers, Maxwell House, McDonalds (Kraft), and specialty offerings from Peets, Caribou Coffee, and Starbucks all sell well below the $1.50 cost of shop coffee. Mid-priced Keurig label varieties and private-label ranges from Costco and Walmart can be mar- keted for a very reasonable 35-cents. Consumers queried by Mintel Inter- national say capsule prices are "expensive (34%) and 17% say capsules are "bad for the environment." Global gains Keurig remains a US brand while Nespres- so, its European counterpart, is distributed globally. Each company generated $5 bil- lion annually selling brewers at the peak of adoption and continue to generate gener- ate billions in capsule sales. "The global coffee pods market is highly competitive and diversified due to the presence of a large number of region- al and international vendors across the globe," observes Manjunath Reddy, a lead analyst from Technavio, specializing in research on food sector. "It has been ob- served that these vendors are increasingly competing against each other based on factors such as price, quality, innovation, reputation, and distribution to gain maxi- mum traction in the market," he writes. Technavio expects the global coffee pods market to grow at a combined an- nual rate of 7% for the next five years. While largely limited to the developed markets, "the premium price tag of the product has enabled the category to have a substantial impact on the value of the global coffee market," writes Reddy. Reddy cites three emerging trends: compostable coffee pods; demand for organic and fair trade pods and integrated marketing communications. Eco fears in perspective While it is true that billions of single-use capsules are piling up, media and mar- keters are no longer treating capsule use as earth-ending. It's all garbage after all and while 8.5 billion capsules end-to-end would circle the earth 10.5 times their to- tal weight is about 25,500 metric tons (approximately 0.01% of the 251 million metric tons of solid waste generated in the US each year). Forbes in July calculated that world- wide sales of plastic bottles tops a million a minute. Americans discard 60 million plas- tic bottles a day. Annual consumption is projected at more than half a trillion bottles by 2021, a 20% increase, mainly in bottles containing water. Placed end-to-end the 480 billion drinking bottles sold in 2016 would extend halfway to the sun. Coffee consumers' preference for convenience and their relative affluence make it unlikely quantities are going diminish. Dunkin' Donuts seriously considered ending its K-cup business in 2015 but, after examining its profitability, expanded production instead. Capsules sales were $220 million last year. The bigger concern is switching to recyclable polypropylene pods. Keurig expects to produce half its pods using this material by 2018 and 100% by 2020. "Our goal is 100% Keurig K-cup pods diverted from landfills by curbside recycling," Monique Oxender, Keurig's chief sustainability officer told the Chicago Tribune. "The con- sumer is going to brew it, peel and empty it, and pop the pod into the recycling bin in the same behavior they would do with a yogurt cup. We want to make it a habit." The problem is packaging, not single-serve, say politicians. In 2016, Loblaw Com- panies launched Biodegradable Products Institute (BPI) certified 100% compostable single-serve pods. Lavazza launched a patented compostable coffee pod in 2017 and Ethical Bean Coffee launched 100% certified compostable single serve pod "to entice consumers looking for environment-friendly products," reports Reddy. "It is expected that more players are likely to come up with new product launches of compostable coffee pods, which will help the global coffee pods market to grow during the forecast period," says Reddy.

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