The Rise of the K-Cup Culture: 4 Reasons Why It’s Time for Specialty Coffee Roasters To Embrace It
Part of the charm of running a local roastery or cafe is that you can put your unique spin on it. Maybe your brand is quirky and homegrown, full of vintage vibes and a cluttered community board. Or, maybe it’s more refined and subdued with jazz trios and happy hours. No matter the scene you’ve created, we love seeing our customers position themselves as a community gathering place — or the roastery that provides coffee to them.
Yet, for all this hyper-local charm, we’re still part of a massive global coffee industry. And, as a coffee business owner, you must constantly weigh how to balance what makes your local coffee brand stand apart and when it makes sense to hop on board with the bigger coffee trends.
In our current COVID world, we’re seeing some trends and new options in coffee sales converging, and we think it’s important to discuss how small speciality roasteries and cafes can potentially benefit — especially when you may be struggling to stay afloat or re-invent.
What are these trends pointing to? Thanks in part to our more home-based lifestyles, and the ever-present lure of convenience, these trends are pointing right to the continued rise of the K-Cup culture.
Here are four reasons to consider why adding a K-Cup line might be worth it:
1. ONLINE COFFEE SALES SHOW CONTINUED GROWTH
Coffee isn’t going anywhere. People are drinking it more than ever, and these days more are ordering their coffee online. According to Hinge Global Research, at Amazon.com alone online coffee sales in the US are expected to total $1.08 billion this year.
2. K-CUP COFFEE SALES ARE EXPLODING
Of that projected $1.08 billion in sales, would you like to guess how much of that is attributed to single-serve coffee (K-Cup, pod, capsule) sales? Would you believe 50%?
Well, it’s actually higher, with single-serve coffee options weighing in at a whopping projected annual revenue of 86%! That’s staggering, considering that single-serve coffee only made its way into the home consumer market just 16 years ago thanks to Keurig.
3. K-CUPS AREN’T WHAT THEY USED TO BE
What accounts for such high sales? Well, we know that they’re super-convenient, and consumers are willing to pay for that convenience. But two other reasons have aligned, putting you in the right place at the right time to give K-Cups serious thought:
MARKET AVAILABILITY & DEMAND
Since Keurig’s Green Mountain patent for K-Cups expired in 2012, corporate competitors have exploded onto the single-serve coffee market scene.
Now more than ever, local, independent specialty coffee roasting businesses are joining the K-Cup game — either packaging single-serve coffee options under their own brand or private-labeling for other brands.
- The demand for local, craft food and beverages is on a continued massive rise, most likely a sentiment shared by the 75 million US homes brewing single-serve coffee each day — further opening the door for viable K-Cup sales opportunities.
Interested in learning more about private labeling your specialty coffee roast? Check out this Perfect Daily Grind article.
MORE SUSTAINABLE OPTIONS
Rightfully so, environmental concerns have played a big role in why small specialty coffee roasteries and cafes have balked at considering K-Cups. With billions of them ending up in landfills, Keurig addressed the backlash by making K-Cups out of #5 polypropylene plastic so they can be recycled in most areas.
Keen to the money to be made, packaging companies also quickly invested in creating good eco-friendly K-Cup options, including our K-Cup supplies partner, North Atlantic Specialty Bag. They offer some great 100% recyclable, BPA-free solutions, including:
- Recyclable flow-thru cups with advanced filtration material designed to increase extraction
- Compostable flow-thru filter cups and solid cups with or without a filter in the cup
- Biodegradable solid cups
Yes, the best of both worlds would have your customers using your coffee in a reusable K-Cup, but it all goes back to convenience and human nature. So, just like we know coffee isn’t going anywhere, we don’t think K-Cups are either.
4. K-CUPS CAN BE PROFITABLE (LIKE, SERIOUSLY)
Here at CoffeeTec.com, we’re seeing a very marked upswing in K-Cup equipment sales, so it’s clear that more of our customers are hopping aboard the K-Cup train. So much so, that we’re working to expand our K-Cup-related equipment and supplies offerings to better meet demand.
Let’s do some quick, back-of-the-napkin math at what you might profit from a one-pound bag of coffee versus converting that same one-pound bag into K-Cups:
In comparison to the above infographic, a cup of coffee enjoys a 25-35% mark-up. Now, we know there are costs involved that impact the net sale — and we know that single cup and bagged coffee sales probably make up the bulk of your sales — but you can’t discount that adding a K-Cup line could reap a greater gross profit margin.
It’s also worth noting that there’s something to be said about K-Cups’ customer retention power, due to their convenience factor. And, like a bag of your branded coffee, K-Cups also offer your business prime brand placement right inside your customers’ homes.
Check out these local specialty coffee roasters who have successfully added K-Cup lines to their businesses:
Evans Brothers Coffee (tea bag-style vs plastic pod)
So, if you’re willing to consider how a K-Cup line might fit into your product offerings, take a look at our K-Cup equipment in our online store. Maybe the timing is right? If you’ve been considering this or have already taken the plunge, we’d love to hear from you in the comments section! Or, if you need some guidance on the subject, we offer consulting services to help you weigh the pros and cons. We’d love to chat with you!
Have Additional Questions?
We’re here for you and would love to help you make the best purchasing and design or layout decisions for your coffee roastery’s operations. No matter where you are in your coffee journey, we want to see you succeed. Check out our consulting and education services. Perhaps you’re interested in financing or are considering the option and benefits of buying used. We’ve got you covered for both. Finally, feel free to explore our FAQs, and if you still don’t have answers to your questions, contact us. Let’s help you build the coffee roastery of your dreams!