Business Watch: The K-cup people "K-capitulate" (not my pun!), reopening their closed 2.0 system to strange un-pre-cupped coffee

The Breakfast Blend is a light roast, and so has practically no flavor (is breakfast time a "no flavor" zone?), but Green Mountain sells a quite drinkable medium-roast Vermont Country Blend -- and a dark-roast French Roast for people who've been trained by Starbucks to prefer their coffee beans roasted till they screech for mercy.

by Ken

Since my only contact with Keurig-style coffee-making is in the office, where we have a very nice machine, but one that's apparently first-generation (and in our office we don't do a whole lot of upgrading). I had never encountered such a beast until the company installed one a couple of years ago, complete with a dedicated hookup to a supply of filtered water.

"At will" caffeine delivery is one of the few perks the company provides us, and before the Keurig system, we did it via one of those commercial double-pot electric drip machines. But people were constantly not bothering to make a fresh pot, or else the bottom third of a pot would remain frying on the heat plate for hours and had to be dumped. And of course there was lots of cleanup.

In all these ways the Keurig system was a dramatic improvement. The ground-up coffee inside a K-cup isn't exactly fresh (who knows how long ago it was ground up and inserted?), but at least the thing is sealed, so it's never too stale. And it's certainly much cleaner, much more convenient. You want coffee, or tea, you just brew it to order! Voilà! Through trial and error, our office manager settled on an assortment of coffees and teas to keep on hand. The system works.

Since, again, all of my K-cuppery happens in the first-generation World of Keurig, it wasn't till a couple of months ago that I saw something online which clued me in that since 2014 there has been a brave new 2.0 World of Keurig, in which everything has changed -- or at least the allowability of using reusable K-cups has. That has been, in a word, eliminated.

Which made basket cases of customers who've been rendered captive by the alllure of the Keurig system for providing relatively quick and convenient hot beverages of all sorts, or maybe by the investment they've made in machines that use K-cups. Now, belatedly, the company is admitting, sort of, that it screwed up.

Maybe I should say that I enjoy our office machine, which is a higher-end model than I would ever buy for myself, in that it is designed for, or at least allows, installation of a direct water source, so that in theory there's hot water ready to brew the second you insert your K-cup. This also means, I assume, that the water is being heated 24/7, even on weekends when we hardly ever have anyone on the premises. But what the heck, it's not my electric bill. Also, it still always takes some time to start brewing, and often quite a lot of time. At those times I'm sympathetic. I have that feeling a lot, where it's just so hard to get started. But the upthrust is that the brewing process isn't always that quick. At home I use a little electric-drip coffee-maker, and it really doesn't take that much time to brew a four-cup pot. ("Four cups" in official parlance. In real-world cups, or at least my-world cups, I call it two.)

Of course at home I also use my own coffee. True, I usually use a Melitta filter, but then, I usually use each filter twice, and even if I used them only once, that wouldn't jack the per-cup cost up anywhere near the cost of a cup brewed Keurig-style. As I discovered when we started using our Keurig machine in the office, and I once I got over my fear of it I came to kind of enjoy the convenience, while the machines aren't prohibitively expensive, the K-cups are really, really expensive. How expensive?

As the Washington Post's "Morning Mix" editor, Fred Barbash, reported a couple of days ago in a piece called "Keurig’s K-Cup screw-up and how it K-pitulated Wednesday to angry consumers." (If you think that pun is awful to read, try typing it.)

Once a consumer buys the coffee machine, the coffee drinker may spend as much as $50 to $60 per pound on the coffee contained in the K-Cups, considerably more than the cost of even Starbucks’s breakfast blend, which goes for about $11.95 per pound.

Ouch! I had figured out all on my own that those little suckers were pricey, but, well, ouch!

But coffee-drinkers aren't total saps and patsies.

Some years back, thousands of Keurig single-serve machine fans found a cheaper alternative, however — refillable, non-disposable K-cups, little plastic coffee grounds holders, which the company graciously sold under the brand of “My K-Cup.”

Not only was it cheaper, but the coffee drinker had more choice, as “My K-Cup” could be filled with any brand of coffee off the shelf.

AND THEN CAME 2.0

In August 2014, when Keurig introduced its “2.0” line of coffeemakers, it stopped making “My K-Cup” for it and made the machine incompatible with any K-cups already in existence, as well as with any unlicensed disposable K-cups made by other companies.

It was $50 a pound and a trail of waste — or nothing.

Here's where it gets really gnarly. I mean Keurig's official response.

“The My K-Cup accessory and other reusable filters are not compatible with Keurig 2.0 Brewing Technology,” the company explained on Facebook, “because the brewer has no way of determining what beverage is being used or how much coffee is being added, and therefore cannot adjust to factors such as brew strength and amount of water, which could represent a safety concern…”

Oh, fercripessakes! A safety concern? They're protecting us? Is anyone buying this? Anyone at all?

Clever competitors moved quickly to fill the void, with ways to, in effect, hack into the Keurig technology. The Rogers Family Company’s “Freedom Clip” was sold patriotically as “Our Gift To You and Everyone …. Freedom Of Choice!”

“We at Rogers Family Company® believe that your right to choose any option is imperative. That’s why we have developed this easily installed ‘Freedom Clip’ for Keurig 2.0® brewers. Just place the clip in your new brewer and it will see all k-cup type pods as ‘Authorized K-Cups®.’ This clip is our gift to you. Now go forth and brew with freedom.”

"Freedom Clip"! I like that! And somehow I don't think I would like being the company on the opposite side of the battle line. It turns out that Keurig eventually had the same response.

Worse for Keurig, as executives acknowledged Wednesday during its quarterly earnings briefing, sales of Keurig machines tanked and they began to accumulate on the shelves across the country. Sales of brewers and accessories declined by 23 percent, the company reported. Its stock price fell 10 percent in after hours trading.

And "with that," says Fred, "Keurig’s CEO did what he had to do. He capitulated Wednesday in a call with market analysts.

“We heard loud and clear from consumers,” said Brian Kelley, “who really wanted the My K-Cup back. We want consumers to be able to bring any brand and bringing the My Cup back allows that.

“My K-Cup was a terrific addition for the consumer. It wasn’t used a lot, but for the consumer it was a nice element to have if they were given coffee as a gift. . . . We took it away because My K-Cup wasn’t going to work with our new system.

“Quite honestly, we were wrong. We underestimated the passion the consumer had for this. We missed it. We shouldn’t have taken it away. We’re bringing it back.”

So you see, it was just an unfortunate cooincidence that the 2.0 machines wouldn't take those outlaw cups. And the company's concern for customer safety was just so intense, what could they do?

I guess we found out Wednesday.

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