Keurig

Keurig is a beverage brewing system for home and commercial use. The machines are manufactured by the American company Keurig Dr Pepper. The main Keurig products are: K-Cup pods, which are single-serve coffee containers; other beverage pods; and the proprietary machines that use these pods to make beverages.

Keurig beverage varieties include hot and cold coffees, teas, cocoas, dairy-based beverages, lemonades, cider, and fruit-based drinks. Through its own brands and its partnership licensed brands, Keurig has over 400 different varieties and over 60 brands of coffee and other beverages. In addition to K-Cup pods it includes Vue, K-Carafe, and K-Mug pods as well.

The original single-serve brewer and coffee-pod manufacturing company, Keurig, Inc., was founded in Massachusetts in 1992. It launched its first brewers and K-Cup pods in 1998, targeting the office market. As the single-cup brewing system gained popularity, brewers for home use were added in 2004. In 2006, the publicly traded Vermont-based specialty-coffee company Green Mountain Coffee Roasters acquired Keurig, sparking rapid growth for both companies. In 2012 Keurig's main patent on its K-Cup pods expired, leading to new product launches, including brewer models that only accept pods from Keurig brands.

From 2006 to 2014, Keurig, Inc. was a wholly owned subsidiary of Green Mountain Coffee Roasters. When Green Mountain Coffee Roasters changed its name to Keurig Green Mountain in March 2014, Keurig ceased to be a separate business unit and subsidiary, and instead became Keurig Green Mountain's main brand.FISCAL 2014 ANNUAL REPORT
. Keurig Green Mountain. November 2014."Green Mountain Coffee Roasters changes name to Keurig Green Mountain Inc"
'' Vermont Business Magazine''. March 10, 2014. In 2016, Keurig Green Mountain was acquired by an investor group led by private-equity firm JAB Holding Company for nearly $14 billion."JAB Holding Company-Led Investor Group Completes Acquisition of Keurig Green Mountain, Inc."
''Business Wire''. March 3, 2016.Masunaga, Samantha
"Owner of Peet's to buy coffee pod pioneer Keurig for almost $14 billion"
''Los Angeles Times''. December 7, 2015."JAB completes acquisition of Keurig Green Mountain"
'' Vermont Business Magazine''. March 3, 2016. In July 2018, Keurig Green Mountain merged with Dr Pepper Snapple Group in a deal worth $18.7 billion, creating Keurig Dr Pepper, a publicly traded conglomerate which is the third largest beverage company in North America.

History

Inception and development

Keurig founders John Sylvan and Peter Dragone had been college roommates at Colby College in Maine in the late 1970s. In the early 1990s, Sylvan, a tinkerer, had quit his tech job in Massachusetts, and wanted to solve the commonplace problem of office coffee – a full pot of brewed coffee which sits and grows bitter, dense, and stale – by creating a single-serving pod of coffee grounds and a machine that would brew it. Living in Greater Boston, he went through extensive trial and error trying to create a pod and a brewing machine. By 1992, to help create a business plan, he brought in Dragone, then working as director of finance for Chiquita, as a partner. They founded the company in 1992,Keurig, Incorporated
– Company Overview at ''Bloomberg''. calling it Keurig; Sylvan later said that the name came from his having "looked up the word ''excellence'' in Dutch".

The prototype brewing machines were also a work in progress and unreliable, and the company needed funds for development. That year, they approached what was then Green Mountain Coffee Roasters, and the specialty coffee company first invested in Keurig at that time.Green Mountain Coffee – History
''BrewaBetterDay.com''. Archived February 22, 2015.Luna, Taryn

''The Boston Globe''. February 7, 2014. Keurig needed sizeable venture capital; and after pitching to numerous potential investors the three partners finally obtained $50,000 from Minneapolis-based investor Food Fund in 1994, and later the Cambridge-based fund MDT Advisers contributed $1,000,000. In 1995, Larry Kernan, a principal at MDT Advisers, became Chairman of Keurig, a position he retained through 2002.Larry Kernan
at LinkedIn. Sylvan did not work well with the new investors, and in 1997 he was forced out, selling his stake in the company for $50,000. Dragone left a few months later but decided to retain his stake.

Launch

In 1997, Green Mountain Coffee Roasters became the first roaster to offer its coffee in the Keurig "K-Cup" pod for the newly market-ready Keurig Single-Cup Brewing System, and in 1998 Keurig delivered its first brewing system, the B2000, designed for offices.Keurig Canada – Our History
''Corp.Keurig.ca''. Retrieved March 16, 2015.A brief history of Keurig
''TimeToast.com''. Retrieved May 1, 2015. Distribution began in New York and New England. The target market at that time was still office use, and Keurig hoped to capture some of Starbucks' market. To satisfy brand loyalty and individual tastes, Keurig found and enlisted a variety of regionally known coffee brands that catered to various flavor preferences.Ackerman, Alliston
"GMCR's Path to Disruptive Innovation"
''Consumer Goods Technology''. November 16, 2012. The first of these was Green Mountain Coffee Roasters, and additional licensees for the K-Cup line included Tully's Coffee, Timothy's World Coffee, Diedrich Coffee, and Van Houtte, although Green Mountain was the dominant brand. Keurig also partnered with a variety of established national U.S. coffee brands for K-Cup varieties, and in 2000, the company also branched out the beverage offerings in its K-Cup pods to include hot chocolate and a variety of teas. The brewing machines were large, and hooked up to an office's water supply; Keurig sold them to local coffee distributors, who installed them in offices for little or no money, relying on the K-Cups for profits.

Keurig is credited with creating a new category with their cup-at-a-time pod-style brewing that was both a breakthrough product and a breakthrough business model.

In 2002, Keurig sold 10,000 commercial brewers. Consumer demand for a home-use brewer version increased, but manufacturing a model small enough to fit on a kitchen counter, and making them inexpensively enough to be affordable to consumers, took time. Office models were profitable because the profits came from the high-margin K-Cups, and one office might go through up to hundreds of those a day.Leder, Michelle
"Taking a Niche Player Big-Time"
'' Inc.'' January 1, 2004.

By 2004, Keurig had a prototype ready for home use, but so did large corporate competitors like Salton, Sara Lee, and Procter & Gamble, which introduced their own single-serve brewers and pods. Keurig capitalized on the increased awareness of the concept, and sent representatives into stores to do live demonstrations of its B100 home brewer and give out free samples. Keurig and K-Cups quickly became the dominant brand of home brewers and single-serve pods.

Acquisition by Green Mountain Coffee Roasters

In 2006, the publicly traded Vermont-based specialty-coffee company Green Mountain Coffee Roasters (GMCR) – which had successively invested in and acquired increasing percentage ownership of Keurig in 1993, 1996, and 2003, by which time it had a 43% ownership – completed its full acquisition of Keurig."Green Mountain Coffee's purchase of Keurig Inc. completed"
''Boston Business Journal''. June 16, 2006. Green Mountain also acquired the four additional Keurig licensees, Tully's Coffee, Timothy's World Coffee, Diedrich Coffee, and Van Houtte, in 2009 and 2010.Rogers, Jim
"The story of the Keurig K-Cup and the 2.0 Brewer"
''The Inside Scoop''. ''RogersFamilyCo.com''. December 16, 2014."Premier Employers of Food Processing: Green Mountain Coffee Roasters"
. The Hitachi Foundation, and Northwest Food Processors Education & Research Institute. Retrieved March 16, 2015.

The joining of Keurig and Green Mountain combined a highly technological brewing-machine manufacturer and a nationwide high-end coffee provider into one company, and created an effective " razor/razorblade" model that allowed for explosive growth and high profits. By 2008, K-Cup pods became available for sale in supermarkets across the U.S. Coffee pod machine sales overall multiplied more than six-fold over the six years from 2008 to 2014. In 2010, Keurig and K-Cup sales topped $1.2billion. The high-margin profits from K-Cup pods are the bulk of the company's income; for fiscal year 2014, Keurig generated $822.3 million in sales from brewers and accessories, while the pods had $3.6 billion in sales.Kell, John
"Keurig's too-hot coffee machines stung by recall"
''Fortune''. December 23, 2014.

In February 2011, Green Mountain announced an agreement with Dunkin' Donuts to make Dunkin’ Donuts coffee available in single-serve K-Cup pods for use with Keurig Single-Cup Brewers. In addition, participating Dunkin’ Donuts restaurants on occasion offer Keurig Single-Cup Brewers for sale."Green Mountain Coffee Roasters, Inc. and Dunkin' Donuts to Make America's Favorite Coffee Available in K-Cup Portion Packs for Keurig Single-Cup Brewers"
''Business Wire''. February 22, 2011. In March 2011, Green Mountain Coffee and Starbucks announced a similar deal whereby Starbucks would sell its coffee and tea in Keurig single-serve pods, and would in return sell Keurig machines in their stores as part of the deal.

Additional products and developments

The company introduced the Keurig Vue brewer, paired with new Vue pods, in February 2012,"Green Mountain Coffee Roasters Unveils New Keurig Brewing Platform"
''Investor.KeurigGreenMountain.com'' (press release). February 15, 2012. seven months before the key patent on the K-Cup expired in September 2012. The Vue system was announced as having customizable features so consumers had control over the strength, size, and temperature of their beverages, and the Vue pod is made of recyclable #5 plastic. The Vue brewer was discontinued in 2014, although Keurig still sells the Vue pods.

In November 2012, GMCR released its espresso, cappuccino, and latte brewer, the Rivo, co-developed with the Italian coffee company Lavazza; it was discontinued in December 2016. In the fall of 2013, the company released a full-pot brewer, the Keurig Bolt, for use mainly in offices; it was discontinued in December 2016.

In November 2013, Keurig opened a retail store inside the Burlington Mall in Burlington, Massachusetts. The store features the full line of Keurig machines and accessories, and nearly 200 varieties of K-Cups for creating individualized 3-, 6-, or 12-pod boxes.

In February 2014, The Coca-Cola Company purchased a 10% stake in Green Mountain Coffee Roasters, valued at $1.25 billion, with an option to increase their stake to 16%, which was exercised in May 2014.Stafford, Leon
"Coca-Cola ups stake in Keurig"
''The Atlanta Journal-Constitution''. May 13, 2014. The partnership was part of Coca-Cola's support of a cold beverage system developed by Keurig to allow customers to make Coca-Cola and other brand beverages at home. In January 2015, the company made a similar deal with Dr Pepper Snapple Group, but without a stockholder stake.Gasparro, Annie; Esterl, Mike
"Keurig Reels In Dr Pepper for Its Coming Soda Machine"
''The Wall Street Journal''. January 7, 2015. The cold beverage system, Keurig Kold, launched in September 2015."Keurig Green Mountain Announces the Launch of Keurig KOLD"
(press release). ''Investor.KeurigGreenMountain.com''. September 29, 2015.

Keurig Green Mountain

In early March 2014, shareholders of Keurig's parent company, Green Mountain Coffee Roasters, voted to change its name to Keurig Green Mountain to reflect its business of selling Keurig coffee makers. Keurig Green Mountain's stock-market symbol remained "GMCR".

In the fall of 2014, Keurig Green Mountain introduced the Keurig 2.0 brewer, with technology to prevent old or unlicensed pods being used in the brewer. The digital lock-out sparked hacking attempts and anti-trust lawsuits.D'Ambrosio, Dan
"Lawsuits claim Keurig Green Mountain violating antitrust laws"
''Burlington Free Press''. April 12, 2014. The Keurig 2.0 K-Cup pods come in 400 varieties from 60 brands, and as of 2015 the 2.0 K-Cup, K-Carafe, and K-Mug pods encompass 500 varieties from 75 brands.Keurig Plus
''Keurig.com''. Retrieved March 21, 2018. The 2.0 brewer also has the capacity to brew full carafes in three settings from 2 to 5 cups, via the use of the new K-Carafe pod.

In March 2015, Keurig launched the K-Mug pod, a recyclable pod which brews large travel mug–sized portions. The K-Mug pods, for use in the Keurig 2.0 brewing system, brew 12-, 14-, and 16-ounce cups, and the plastic is recyclable #5 polypropylene plastic.

In mid 2015, Keurig debuted the K200, a smaller Keurig 2.0 model that can brew single cups or four-cup carafes and comes in a variety of colors. General Electric announced that its new Café French Door refrigerator, due out in late 2015, will have a Keurig coffee machine built into the door.

In September 2015, Keurig launched a line of Campbell's Soup available in K-Cups.Bowerman, Mary
"Keurig unveils Campbell's Soup K-Cups"
''USA Today''. September 10, 2015."Campbell's Fresh-Brewed Soup, The First-Ever Hot Soup Made Exclusively for the Keurig Hot Brewing System, Now Available on Keurig.com"
(press release). ''Investor.KeurigGreenMountain.com''. September 9, 2015. The Campbell's Fresh-Brewed Soup Kits come with a packet of noodles and a K-Cup pod of soup. The product is available in two varieties: Homestyle Chicken Broth & Noodle, and Southwest Style Chicken Broth & Noodle.

Also in September 2015, Keurig launched Keurig Kold, a brewer which creates a variety of cold beverages including soft drinks, functional beverages, and sparkling waters. The machine brews beverages from The Coca-Cola Company (e.g. Coca-Cola, Diet Coke, Coke Zero, Sprite, Fanta) and the Dr Pepper Snapple Group (e.g. Dr Pepper, Canada Dry) and Keurig's own line of flavored sparkling and non-sparkling waters and teas, sports drinks, and soda-fountain drinks.

In December 2015, it was announced that Keurig Green Mountain would be sold to an investor group led by private-equity firm JAB Holding Company for nearly $14 billion. The acquisition was completed in March 2016.

Keurig Dr Pepper

In July 2018, Keurig Green Mountain merged with Dr Pepper Snapple Group in a deal worth $18.7 billion, creating a publicly traded conglomerate which is the third largest beverage company in North America.

Keurig launched Drinkworks Home Bar in late 2018, developed by Keurig Dr Pepper and AB InBev. The machine creates cocktails, beers and ciders through 24 different pods. The device launched to the general public in 2019. In December 2021 Keurig announced it was discontinuing the platform and offered refunds for the machines to purchasers.

Products

Keurig K-Cup brewing systems

The company's flagship products, Keurig K-Cup brewing systems, are designed to brew a single cup of coffee, tea, hot chocolate, or other hot beverage. The grounds are in a single-serve coffee container, called a "K-Cup" pod, consisting of a plastic cup, aluminum lid, and filter. Each K-Cup pod is filled with coffee grounds, tea leaves, cocoa powder, fruit powder, or other contents, and is nitrogen flushed, sealed for freshness, and impermeable to oxygen, light, and moisture.

The machines brew the K-Cup beverage by piercing the foil seal with a spray nozzle, while piercing the bottom of the plastic pod with a discharge nozzle. Grounds contained inside the K-Cup pod are in a paper filter. Hot water is forced under pressure through the K-Cup pod, passing through the grounds and through the filter. A brewing temperature of is the default setting, with some models permitting users to adjust the temperature downward by five degrees.

The key original patent on the K-Cup expired in 2012.Johnston, Kati
"Another challenge for K-Cup maker"
''The Boston Globe''. 12 June 2012. Keurig has later patents, including on the filtration cartridge used in K-Cups, and has also launched a number of new pods since the beginning of 2012.

Brewing system models

Keurig sells many brewing system models, for household and commercial use. Licensed models from Breville

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