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Single-Cup Brew Beverage Products in the U.S.: Coffee Pods and Beyond

July 2013 | 160 pages | ID: S5E6E3889BEEN
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The Keurig K-Cup brewer from Green Mountain Coffee Roasters (GMCR) revolutionized the single-serve coffee market, which posted a compound annual growth rate of over 75% between 2007 and 2012 in tracked mass-market channels. Total U.S. retail coffee market dollar sales grew 10% in 2012 thanks to a dramatic 82% jump in the single-cup brew segment, which reached $1.8 billion in 2012.

Proven market performance and the expiration of an important K-Cup patent in September 2012 has led to a new round of marketplace competition and opportunity, motivating long-standing category participants to step up their competitive strategies. An important feature of this competition has been an influx of private label and unlicensed beverage pods that work in Keurig K-Cup brewers.

New, more sophisticated and specialized machine technology for single-cup brewers keeps elevating the quality of coffee made at home, while single-serve beverage manufacturers and marketers continue to broaden the array of beverages specifically designed for these machines, increasing the range of successful products, brand entrants, and satisfied consumers. Although coffee beverages still predominate for single-serve brewers, other beverages including tea, cocoa and chocolate, hot and cold fruit drinks, and specialty wellness beverages are increasingly available.

Overall, several factors will continue to spur the growth of the single-cup brew beverage market, including a nation of dedicated and increasingly discerning coffee drinkers; consumer desire to recreate coffee shop quality at home; continued adoption of single-serve brewers in offices and hotels; innovations in brewer technology supporting enhanced beverage quality; a large selection of brewers, many of which are aggressively marketed and attractively priced; the popularity of single-serve brewers as a hot kitchen gadget, well suited for holiday gift giving; a wide selection of single-serve beverage options that continues to expand; and the recent increase in published reports of the health benefits associated with coffee consumption.

Single-Cup Brew Beverage Products in the U.S. spotlights the dynamic single-serve retail beverage market, featuring proprietary Packaged Facts consumer survey data to identify the types of single-cup brew beverages used, when and where they are consumed, and where they were purchased.
CHAPTER 1: EXECUTIVE SUMMARY

Introduction
  Scope
  Methodology
Market Drivers
  A Nation of Dedicated Coffee Drinkers
  Bringing the Coffee Shop Home
  Single-Serve Brewers as Trendy Kitchen Gadget
  Brewers, Brewers Everywhere!
  Innovations in Brewer Technology
  More Single-Cup Brew Choices
  Drink to Your Health!
Changing Dynamics of Single Serve
  Single-Cup Brew Coffee Market Size
  Coffee Market Share for Single-Cup Brew
  Alternate Channels
Single-Serve Brewers
Coffee Share of Single-Cup Brew Beverage Market
  Navigating the Flood of Unlicensed Brands & Private Label
  Single Serve
Making Single-Serve Beverages More Ecofriendly

CHAPTER 2: CHANGING DYNAMICS OF SINGLE SERVE

Single-Cup Brew Market Overview
  Single-Cup Systems Successful Business Model
  Flexibility – Key to Future Success?
  Consumers and Single Serve
    Overall Coffee Consumption
    Gourmet Coffee Consumption
    Espresso Consumption
    What’s Brewing? Single-Serve Beverage Use
    Figure 2-1: Single-Serve Pod Use by Beverage Type, 2013
    Figure 2-2: Use of Select Single-Cup Brew Brands (in last 30 days) vs. IRI FDMx Sales, 2012-2013
    Figure 2-3: Single-Cup Brew Beverage Use by Location and Daypart, 2013
    Figure 2-4: Purchasing Rates for Single-Cup Brew Packs by
    Retail Channel, 2013 (U.S. adults)
  Single-Cup Brew Coffee Retail Market Size & Growth
    Table 2-1: IRI FDMx-Tracked U.S. Coffee Sales by Type, 2007-2012 (in $ millions)
    Figure 2-5: IRI FDMx-Tracked U.S. Dollar Sales of Single-Cup Brew
    Coffee vs. Ground, Instant, and Whole Bean Coffee, 2007-2012 (in $ millions)
    Figure 2-6: IRI FDMx-Tracked U.S. Volume Sales of Single-Cup Brew vs. Ground Coffee and Total Coffee, 2007-2012 (volume in pounds)
    Table 2-2: IRI FDMx-Tracked U.S. Unit and Volume Sales of
    Single-Cup Brew Coffee vs. Ground Coffee and Total Coffee, 2007-2012 (volume in pounds)
    Single-Cup Brew Price per Pound Nearly 5X Ground
    Figure 2-7: IRI FDMx-Tracked U.S. Price per Pound for Single-Cup
    Brew Coffee vs. Ground Coffee and Total Coffee, 2007 - 52 Weeks Ending Apr. 21, 2013
    Table 2-3: IRI FDMx-Tracked U.S. Price Per Pound for Single-Cup Brew Coffee vs. Ground Coffee and Total Coffee, 2007 - 52 wks end April 21, 2013 (price points)
  Impact of Green Coffee Prices on Single-Cup Brew
    Green Coffee Prices Still Falling
  Single-Cup Brew Coffee Market to Top $5 billion
    Table 2-4: U.S. Sales of Single-Cup Brew Coffee at Retail, 2007-2016 ($ millions)
Single-Cup Brew Market Share & Composition
  Single-Cup Brew Coffee Market Share by Company
    Figure 2-8: IRI FDMx-Tracked Single-Cup Brew Coffee Market Share by Company, 52 weeks ended April 21, 2013
    Green Mountain Coffee Roasters, Inc. (GMCR)
    J.M. Smucker
    Table 2-5: IRI FDMx-Tracked Single-Cup Brew Coffee Sales by Company, 52 weeks ended April 21, 2013 ($ and %)
  Market Share by Brand
    Figure 2-9: IRI FDMx-Tracked Share of Sales of Single-Cup Brew Coffee by Brand, 52 weeks ended April 21, 2013
    Table 2-6: IRI FDMx-Tracked Sales and Share of Single-Cup Brew Coffee by Brand, 52 weeks ended April 21, 2013
    Tassimo’s Bad Luck Streak
Alternate Channels Important to Single-Serve Sales
  Table 2-7: Share of Single-Cup Brew Coffee Dollar Sales by Channel, 2013 (percent)
  Single-Cup Brew Beverage Products Table of Contents
  July 2013 © Packaged Facts iii
  Advantages of the Internet for Single-Serve Beverages
  Internet Loyalty Programs, Rewards and Benefits
  Club Keurig Rewards
  Nespresso – The Club
  Tassimo
  Coffee Bean & Tea Leaf
  Starbucks
  Other Online Coffee Retailers
Single-Cup Brew Product Assortment & Pricing by Channel
  Table 2-8: Number of Single-Cup Brew SKUs by Retailer and
  Beverage Type
Single-Cup Brew Coffee at the Office
Office Coffee Service (OCS) Rebounds
Table 2-9: Office Coffee Service Single Cup Brewer Placements:
Marketer Share, 2007-2012 (percent)

CHAPTER 3: SINGLE-SERVE BREWERS

  A Plethora of Brewers to Choose From
  Dedicated Pod Design or Open Source?
  Keurig Single-Cup System the Clear Standard
  Good Housekeeping Rates Single-Serve Coffeemakers
  Innovation in Single-Cup Brewing Evident in Edison Awards
  Consumer Picks for Top Coffee Maker Brands
Keurig Vue
  Maize of Models
    Table 3-1: Features of Various Keurig Vue Coffee Maker Models
  Pricing: Strategic or Reacting to Competitive Pressure?
Keurig Rivo
  GMCR Receives NSF Certification for Foodservice Use
Starbucks Verismo
  Pricing
    Table 3-2:Starbucks Verismo Model Availability and Price by Online Retailer
  580 Base Model
    Use and Operation
  V-585 Model
    Use and Operation
  Bosch Tassimo T55 and Other Models
    Barcode Technology – Tassimo’s Point of Difference
    Table 3-3: Feature Comparison of Bosch Tassimo Single-Serve Brewer Models
  Nestlé Nespresso
    Table 3-4: Features of Various Nespresso Brewer Models
  Bunn My Cafe MCU
    Pricing
    Table 3-5: Bunn My Café MCU Price at Various Online and Bricks and Mortar Retailers
    Use and Operation
  Esio Bankruptcy Hinders Potential Competition
  CBTL Brewers
    Table 3-6: Features of Various CBTL Brewers
  Hamilton Beach – The Scoop

CHAPTER 4: SINGLE-CUP BREW BRANDS

  Consumer Picks for Top Coffee
Products Carrying the Keurig Brewed Seal
  Table 4-1: Beverage Types Available for Keurig K-Cups, Vue & Rivo Brewing Systems Keurig-Licensed K-Cups®
  Table 4-2: K-Cup Beverage Brands Carrying 'Keurig Brewed' Emblem and Deduced Relationship Status with GMCR
  K-Cup Offerings by Beverage Type
  Table 4-3: Keurig K-Cup Offerings by Beverage Type (percent)
  Tea & Decaf - The Long Tail of Single Serve?
  Brew Over Ice Iced Tea K-Cup Offerings
  Functional & Nutritional K-Cup Beverages
  Expanded Starbucks Partnership
  Dunkin’ Donuts
  The Coffee Bean & Tea Leaf
  Table 4-4: CBTL Beverage Capsule Offerings: Espresso, Coffee, Flavored Coffee and Tea
  Lipton Tea Launch Brewing
Keurig Patent Status
Keurig Vue Packs
  Table 4-5: Keurig Vue Packs by Beverage Type (percent)
  Attention-Getting Awards
  A Nod to Sustainability
Keurig Rivo Packs
Starbucks Verismo Pods
  Table 4-6: Starbucks Verismo Coffee Pods Sold Online (in dollars)
  Milk Pods
  Beverage Kits
Tassimo T-Discs
  Table 4-7: Tassimo T-Discs by Beverage Type (percent)
Esio E-Paks
Nespresso Capsules
  Nespresso Boutiques
    Table 4-8: Nespresso Boutique and Boutique Bar Locations in the
    United States
  Single-Serve Brewed Beverages: Beyond Coffee
  Reading the Tea Leaves

CHAPTER 5: UNLICENSED & PRIVATE LABEL SINGLE-CUP BREW ..

Private Label Single-Cup Opportunity
  GMCR and Analyst Assessment of Private Label Impact
  Nespresso and Private Label
  Retailer Branded Pods for K-Cup Brewers
  TreeHouse Foods Single-Cup Brew Volume Up
    Keurig-Brewed Private Label K-Cup Launch
    Table 5-1: Select K-Cup Packs at Costco Online - Count, Price and
    Cost per Cup
  Retailer Private Label Going Gangbusters
    Unlicensed Private Label Single-Cup Launches for Keurig Brewers
    Price of Supermarket Private Label Brands vs. Market Leaders
    Table 5-2: Price and Selection of Supermarket Private Label Single-Cup Coffee Packs (Compatible with Keurig K-Cup Brewers)
    Table 5-3: Regular Price of Leading Coffee Brands at Select Supermarkets
Unlicensed, Branded Single-Cup Players
  Kraft’s Free Ride on Keurig’s Coattails
  Rogers Family Company
  Peet’s Single-Serve Launch Is Company’s Biggest Ever
  Community Coffee Contemporizes Family Tradition
  Don Francisco’s Coffee Adds Single-Cup
  New England Coffee
RealCup Single-Serve Cups
  Marley Coffee RealCup™ Capsules
  Martinson Coffee RealCup Capsules

CHAPTER 6: MAKING SINGLE-CUP BREW MORE SUSTAINABLE

Many Single-Serve Producers Compost and Recycle with TerraCycle
  GMCR Pilots Recycling its Own Way
Life Cycle Assessment for K-Cups
Freshpacks Reduce Carbon Footprint 40% for Flavia
More Recycling & Ecofriendly Aluminum Production for Nespresso
The UpShot …
  Woodshed Roasting
  Mystic Monk Coffee
  Red Diamond
  Saxbys Coffee
  Hawaii Roasters
  Melitta
OneCup – Just Over the Border
Reusable K-Cups and Similar Products
  My K-Cup Alternatives

APPENDIX I: RETAILERS OF KEURIG BREWERS AND PODS

Keurig Brand Brewing Systems K-Cup, Vue and Rivo – not all systems at all retailers
Appendix II: Keurig K-Cup System Beverage Packs
Appendix III: Keurig Vue System Beverage Packs
Appendix IV: Retailer Single-Serve Offering & Pricing (Giant)
Appendix V: Retailer Single-Serve Offering & Pricing (Harris Teeter)
Appendix VI: Retailer Single-Serve Offering & Pricing(Hy-Vee)
Appendix VII: Retailer Single-Serve Offering & Pricing(Safeway)
Appendix VIII: Retailer Single-Serve Offering & Pricing(Wegmans)
Appendix IX: Retailer Single-Serve Offering & Pricing(Wal-Mart)
Appendix X: Retailer Single-Serve Offering & Pricing(SuperTarget)
Appendix XI: Retailer Single-Serve Offering & Pricing(Office Depot)
Appendix XII: Retailer Single-Serve Offering & Pricing(Bed Bath & Beyond)
Appendix XIII: Retailer Single-Serve Offering & Pricing(Kohl’s)


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