| NEW YORK
NEW YORK Feb 8 Stephen Shapiro says he
"couldn't survive" without his Keurig single-serve coffee
"I wake up, before I even go to the bathroom I turn my
Keurig on," said the 75-year-old retired health food store
owner, who splits his time between New York and Boca Raton,
Before he bought the machine more than six years ago, he
used a traditional drip brewer, and would pour between a third
and a half of the coffee he brewed each morning into the sink.
With the Keurig machine, that's no longer the case.
"There's no waste at all," Shapiro said. "You brew what you
drink and that's it."
Sales of coffee pods for the slick single-serve machines
like Keurig Green Mountain's Keurig, Nestle's
Nespresso, and Starbucks' Verismo soared to $3.8
billion in 2014 from $234 million in 2009, Mintel market
research data shows. Keurig, the maker of the most popular
machine, has seen its shares rise to about $118.90 on Friday
from about $9 in February 2009.
Stealing market share from traditional roasted coffee, the
phenomenon is transforming the coffee industry in less obvious
ways too: the single-cup pods are increasing efficiency, denting
demand for beans as Americans, like Shapiro, throw less leftover
java down the drain.
Traders often quip that before single serve coffee pods
gained prominence, the sink was the world's largest coffee
Now, Nielsen data seen by Reuters but not publicly available
shows Americans bought 967 million pounds of coffee from retail
outlets in the 52 weeks ended Dec. 20, 2014, a 1.2 percent
decline from the prior year. Nielsen spokeswoman Meg Chari
confirmed the figures but declined to provide the original
report or the figures from prior years, which are available only
Still, Americans are drinking more coffee, and spending
hundreds of millions more dollars on it, every year. Americans
spent a total of $11.9 billion on coffee in 2014, up 6 percent
from $11.2 billion in 2013 and up almost 60 percent from $7.6
billion in 2009, Mintel data show. The rise comes as
single-serve sales have exploded, as roasters often charge a
hefty premium for single-serve over the same type of coffee in a
traditional ground or whole bean format.
Americans drank 2.01 cups a day in 2014, up from 1.97 cups
in 2013 and the highest level since 1980, National Coffee
Association data show. The group changed its methodology in 2012
to better represent African-Americans and Hispanic-Americans.
The data suggest that even as Americans drink more coffee,
the switch to single-serve and the reduction in coffee waste has
increased the efficiency of consumption, limiting the overall
amount of beans roasters will need to buy per consumer.
It's not just what coffee drinkers aren't throwing away that
is eroding demand.
Each single-serving cup contains just over 6 beans per
liquid ounce, compared to 10 beans in traditional coffee brewed
to Specialty Coffee Association of America standards, estimated
Nate Hrobak, a buyer at Caribou Coffee in Minneapolis, one of
the nation's largest specialty chains.
The transformation of how Americans buy and consume coffee
comes as farmers grapple with severe droughts in Brazil, the
world's biggest coffee grower, and a devastating leaf rust
disease in Central America. The growing popularity of the more
efficient new machines has blunted the effect of supply crises
on prices, traders and roasters said.
"At the rate that Keurig is growing and selling, that has
some material impact on the overall coffee world," Hrobak of
Caribou said, noting that the reduction in coffee waste has
significantly increased consumption efficiency, even as
single-serve has expanded coffee's reach.
Using Nespresso's "portioned coffee system" can reduce the
amount of leftover coffee depending on consumer behavior,
spokeswoman Diane Duperret said. Nestle has been making
single-serve espresso capsules and machines since 1986.
However, Nespresso doesn't see bean demand declining, noting
that the growth in the single-serve coffee segment has boosted
overall coffee purchases, Duperret said.
Indeed, the Nielsen data is just one measure of coffee
demand. U.S. imports reached 24 million 60-kg bags in the first
11 months of last year, 3 percent more than the same period of
2013, International Trade Commission data show. Full-year data
has not been released yet.
The data also refer only to sales at retail outlets, for
consumption at home, excluding the swathe of coffee consumed at
work or coffee shops.
Data from market research firm Mintel including out-of-home
coffee shows that purchases by weight rose steadily between 2010
and 2013, and is forecast to rise further.
Still, the NCA says that home remained the dominant place
for consumption in 2014, with 81 percent of coffee drinkers
consuming at home and 35 percent consuming elsewhere, both up
from the prior year. The percentages show that many people drink
coffee both at home and on the go.
And while single-serve coffee is more efficient and
convenient, some consumers said it's simply not as tasty as a
"There definitely are things you miss - the really fresh
smell, the sound, and the taste," said Cindy Glickert, an
antiques dealer living in Kirkland, Washington. "But you give
that up for the convenience."
(Reporting by Luc Cohen, editing by Josephine Mason and John