Something’s Brewing With Single-Cup Pods

Single-serve pods heating up coffee bar competition
keurig

When it comes to single-serve beverage platforms, cold-dispensed varieties are heating up the segment, giving flagship coffee and tea varieties a run for their money.

Meanwhile, aggressive expansion on the part of pod leader Keurig, private-label variety growth and addition of new players into the space all help fuel healthy growth projections for 2016.

In a report analyzing industry and consumer trends shaping the U.S. market for single-cup beverages, Packaged Facts forecasts the market for single-cup coffee to reach $4.37 billion in 2015, up 18.4% from 2014. For 2015, the Rockville, Md.-based research firm expects the broader single-cup beverage market, including coffee, tea and other beverages, to generate sales of about $4.6 billion.

The projections were detailed in Packaged Facts’ report “Single-Cup Brew Beverage Products in the U.S.: Coffee Pods and Beyond, 2nd Edition.”

Indeed, the market is undergoing a major transition, a development that ties back to the following developments:

  • The migration of licensed-branded single-cup coffee onto the Keurig 2.0 platform;
  • A broader influx of brands into the single-cup space;
  • An increasing price gap between branded and private label portion packs, and Keurig’s push into the private label space; and
  • The emergence of new brewers—coffee and otherwise—competing against the Keurig platform.

Consumers will benefit from exploding single-cup coffee variety, ranging from super-premium to value-oriented; a wider array of less expensive portion packs from which to choose; and the ability to purchase single-cup brews priced less than $100, according to the Packaged Facts’ report.

“We believe tea and cold beverage innovations will add at least incremental sales to single-cup beverages. Down the road, we envision cold-beverage platforms broadening the market for single-cups beverages to teenagers and children, providing a plethora of new potential drinking occasions,” stated Packaged Facts.