The Death ofthe K Cup

Bywww.BuyOrganicCoffee.org

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Are we going to see the death of the k cup?

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Keurig, the maker of single serve coffee saw its stock drop 30% after reporting diminishing sales.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Fortune reports as Keurig sales plunge.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/In releasing its third quarter earnings after the market closed on Wednesday, Keurig Green Mountain GMCR -29.95% announced some bad news: it’s planning to cut 5% of its workforce. The company has 6,600 full-time, part-time, and seasonal employees, according to its 2014 annual report.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Following the news, shares of the K-cup maker plunged in after-hours trading Wednesday and were off some 3o% in Thursday morning trading.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/The company said that the reduction in headcount is part of a “productivity plan” to reduce costs by $300 million over the next three years. Approximately $100 million of that savings is expected in fiscal year 2016.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/The cut in costs comes as the company reported dismal sales of its signature products. Sales of its packaged coffee pods, or K-Cups, fell 1%. Sales of brewers and accessories plummeted 26%. The company’s revenue declined 5% to $969 million and net income dropped 27% to $113.6 million.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/We wrote recently about k cups in our article, Does Organic Coffee in a K Cup Make Sense?

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/There is a basic contradiction in the equation of selling organic coffee in plastic containers that will fill up landfills and not decompose for thousands of years!

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/However, the more likely case is that single serving coffee is a fad and fads run their course. So, is this the death of the k cup or simply a retrenchment into a smaller market?

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Where Do K Cups Make Sense?

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/This writer loves it when he travels and there is a coffee maker in his hotel room.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Here is a case where k cups make sense although we would like to see biodegradable cups.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Single adults do not make large or need large quantities of coffee so biodegradable k cups make sense there also.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/For the family that makes coffee for several people at once give me a pot of boiling water, a cloth filter and freshly ground healthy organic coffee in the right quantity.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Fads Come and Go

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/CNN Money addresses the k cup coffee fad.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Keurig Green Mountain (GMCR), which sells single cup makers and the K-Cups to go with them, reported disastrously bad results on Wednesday. Sales of both the brewers and pods fell in the second quarter. The company is laying off 5% of its employees.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/The stock plunged nearly 30% on the news. It's now down 60% this year. It's worth asking if making one cup at a time instead of a full pot is a fad that's close to peaking.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/It seems that Keurig alienated its core customers with its newest machine, the Keurig 2.0. Some consumers balked at the $199.99 price tag. But what really irked caffeine addicts was the fact that the new Keurig could only make coffee with officially licensed K-Cups.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/But there is a big cottage industry of cheaper, private label coffee pods that were compatible with older Keurig machines.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Two makers of those cups, TreeHouse Foods and Rogers Family Co., have both sued Keurig Green Mountain and accused the company of anti-competitive practices.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/Rogers went as far as creating a "Freedom Clip" that lets Keurig 2.0 customers brew non-licensed pods.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/It would seem that the k cup fad is wearing thin and Keurig has hurt itself by trying to corner the market with a machine upgrade that excludes other brands.

http://buyorganiccoffee.org/1445/the-death-of-the-k-cup/That, in the end, is probably the reason for the death of the k cup.