by KJ Fallon
2013—Judge rules the Rogers Family Company did not infringe on Keurig’s patent.14
February 2014—Keurig is sued by Treehouse Foods over the Keurig 2.0 brewer.15, 16, 17 Treehouse Foods maintained that Keurig was trying to monopolize the single-serve coffee market.
March 12, 2014—The United States Court of Appeals confirmed a previous decision that found that the Rogers Family Company’s OneCup single-serve coffee pod did not infringe on Keurig’s patents.18
March 13, 2014—The Rogers Family Company sues Keurig for violations of federal antitrust as well as for unfair competition.19
April 2014—Continuing in the vein started by the Rogers Family Company and Treehouse Foods, twelve class action complaints from people in four states and a Maryland insurance company were launched against Keurig for violating antitrust laws because the Keurig 2.0 brewer, which would be launched later that year, would accept only Keurig K-Cups.20, 21
April 2014—As a result of a probe by the French Competition Authority for unfairly discouraging the use of competitors’ espresso capsules in Nespresso’s brewers,22, 23 Nespresso acquiesced to concerns and agreed to let rival coffeemakers produce capsules that can be used in Nespresso’s brewers. Nespresso had changed the design of its brewer or capsules too often and too close to when a competitor was introducing a brewer, according to the complaint. This commitment of Nespresso to the French authority to resolve the competition issue is considered groundbreaking because in that commitment Nespresso agreed, among other things, to give competitors technical details about its new brewers four months in advance to Nespresso’s marketing the machines. Nespresso also agreed to make available to rivals the fifteen latest prototypes of new brewers so that these other companies would be able to conduct compatibility tests with their capsules. Nespresso also agreed to let the French authority know the reasons for any technical adjustments far ahead of manufacturing the new designs. This was seen as something for other companies to watch since these kinds of commitments would seem to frustrate the whole idea behind innovation.24, 25
May 2014—Nespresso, USA, sues HiLine Coffee Company for trademark infringement, among other things, and for violating unfair competition laws.26, 27 HiLine Coffee, based in New York, said its goal was offering customers quality coffee at an affordable price. HiLine Coffee had launched in July of 2013 and urged consumers to declare “Independence from Nespresso.”28 This did not please Nespresso.
August 2014—Keurig introduces the 2.0 brewer that will accept only Keurig K-Cups.
November 2014—Rogers Family Company comes out with the Roger’s Freedom Clip, which can circumvent the technology of Keurig’s new 2.0 brewer that allows only K-Cups authorized by Keurig, which have a code that the 2.0 brewer recognizes.29, 30, 31
January 2015—Ethical Coffee Company (owned by a former Nestlé chief executive) lodges a complaint32 in a Paris court against Nespresso saying that a new part in Nespresso’s brewer prevented Ethical’s coffee capsules from being used in the Nespresso brewer. Nespresso’s patent for this part in its brewer was declared void.33, 34
January, 2016—Nespresso sues Israeli company Espresso Club for featuring a very George Clooney-esque actor in their ads.35, 36 While at the start of the ad there is a warning that the actor is not George Clooney, there are enough similarities to Nespresso’s ads37 that have featured Clooney in its advertising since 2006 that Nespresso took offense.
PART THREE
COFFEE FOR ONE EVOLVES
CHAPTER 9
The Single-Serve Environmental Quandary and Some Alternatives
In the coffee brewing industry, as in everything else, there is a reaction for every action and there have been countless reactions to each twist and turn in the single-serve industry. Some companies are fighting back with alternatives that pressed-for-time people can use with a clearer environmental conscious.
Rogers Family Company
John W. “JR” Rogers, vice president of Lincoln, California’s, Rogers Family Company, is one of the four adult children of company founders Jon B. Rogers and Barbara Rogers. All four children work full time at the company, so it really is a family operation. As JR tells it, the company, formed in 1986, initially had no intentions of going into the single-serve coffee business. He had seen single-serve coffee brewers at gas stations, car washes, and other places around town. But he didn’t think much of it at first: “We had no interest in getting into the single serve at all when it first came out. I didn’t even think it was that particularly a great way to make coffee . . .” He thought that the single-serve brewer would be like, as he said, the bread maker in the ’80s: “Bread makers were really hot, and there was one in every darn house. Everyone was baking bread for about eight months, and then it just died off.”1
But the single-serve brewer was not like the bread maker. As single-serve coffee got bigger and bigger, he realized they had to be a part of it, but they wanted to accomplish three things. “One,” JR said, “if we were going to do it, we wanted to make it taste better, [two], we wanted to reduce the environmental footprint, and [three], we wanted it to be cheaper because it was pretty expensive. We thought if we could accomplish those three goals that we could be successful. It wasn’t a ‘let’s make the biodegradable single-serve cup.’ It really was three phases of the whole thing.” Their first version of the single-serve coffee pod took about two years to develop and came out in 2011.
Rogers Family had the help of one of their equipment manufacturers in creating the coffee pods. They reduced the packing cost by 30 percent by using less plastic. Their company as a whole uses less plastic, he pointed out. “We started working on the idea of, okay, can we improve on this?” he said. “It led to the 100 percent compostable cup . . .” It took a lot of time and testing to be certified biodegradable, but they did it. All the components have been certified biodegradable and are made from plant-based renewable resources.
Rogers Family, whose brands include San Francisco Bay Coffee and the Organic Coffee Company, oversees the coffee production from start to finish. With their OneCup, Rogers went after Keurig one biodegradable single serve at a time. In 2014, they came out with an ingenious invention called the Freedom Clip, to help consumers bypass the proprietary barricade that Keurig had built into its 2.0 brewer that would permit only K-Cups to be used in the machine.
Rogers Family got the idea for the Freedom Clip when they started to hear rumblings that Keurig was coming out with the new machine that was going to be proprietary and work only with that company’s K-Cups.2, 3 Rogers wanted to find out about the new brewer’s limitations but they were not into industrial espionage.
“We were having a lot of trouble getting our product in the marketplace because of this new machine,” JR said of the Keurig 2.0. “Our stuff [wouldn’t] work with it, no one else’s [would], it [was] going to have to be Keurig-approved, so there was a whole big flurry and scurry in the marketplace.”4, 5
So the people at Rogers did what any forward-thinking, smart company would do. “Once the machine came out, we bought one,” JR said. “We’d figured how to make something else work in it. We certainly couldn’t come out and change our products right away because we had inventories of packaging material and things.” They needed to figure out how to make things work using what they already had. They did figure out a way to make it work and how to make any brand of K-Cup-like coffee pods compatible with the 2.0 brewer. They invented the Freedom Clip. And they gave it away for free.
The design of the Freedom Clip tricked the Keurig 2.0 into thinking the unauthorized pod, like ones from Rogers, were approved pods. The machine could then brew coffee using pods other than K-Cups. The clip attached to the inside of the machine, fooling the brewer into “thinking” that the coffee pod was an authorized product, so the machine would work. The Freedom Clip, as JR said, “Certainly helped other people’s products, too, but what it did was it opened up competition in the marketplace.”
The Next Wave for Single Serve
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JR said that the next wave for single-serve coffee is to be environmentally friendly. “People are looking at what they’re doing every morning,” he stressed, “and they open up their trash can, they see fifteen plastic cups there which are going to go into the landfill, and they’re never going to go away. Every piece of plastic that’s ever been made since the beginning of time is still here in some format. It just doesn’t go away, so I think people are seeing that, and wondering if they really want to continue doing that to the planet.”
The Rogers Family Company were not alone in this thinking and they are not alone in doing something about it.
For instance, there are musicians. Musicians and coffee go together like music and lyrics. Some famous musicians have had affiliations with certain coffee roasters and chose blends that they liked. That brew was promoted in tandem with the release of a new album. Intelligentsia Coffee, for instance, has worked with St. Vincent, The New Pornographers, and Wilco. They invite the musicians in, they sample the coffees, select a coffee, and then they have a collaboration for an album launch.
Other musicians love coffee so much they started their own coffee companies. Aerosmith’s Joey Kramer’s Rockin’ & Roastin’, for example, and Green Day’s Oakland Coffee Works.
Green Day and Oakland Coffee Works
Rogers Family Company partnered with Oakland Coffee Works, started and owned by Green Day members Mike Dirnt and Billie Joe Armstrong. Not only does Oakland Coffee Works sell its coffee in bags made from certified compostable materials (even the valve in the bag is biodegradable), but they also offer single-serve pods made from compostables. As Oakland Coffee Works announced in a statement, “First there was diner coffee, then there was second wave coffee, like Starbucks, and then came the third wave with artisanal coffee—but this is the next step: organic, truly high-quality coffee that fairly supports the farmers who grow it and that comes in packaging made from fully compostable materials.”
The Green Day musicians came up with an idea for a business that would not only offer great coffee, but that would make a difference with the environment. They are very committed to this next stage of single-serve coffee, as evidenced by an email exchange we had: “We are ushering in the Fourth Wave of premium coffee, which values environmental sustainability and a personal connection to the farmers, in addition to the passion for quality coffee and focus on origin that defined the Third Wave. We hope that other companies will follow our lead and transition to more sustainable and affordable options. It will not be easy, but we hope that the future will be free of single-use plastic pods and bags.”6
As Mike Dirnt of Green Day said of the single-serve option for coffee, “We know that a majority of people use single-serve cups and that the problem of single-use plastic will not go away unless a viable solution is presented. Compostable pods are a great solution. That being said, as a parent of three, I also understand the need for a cup of coffee immediately.”
There was never any doubt about what kind of business the musicians would get involved in. They’d been seriously into coffee for more than a decade. Oakland Coffee Works just seemed like the obvious venture. “We’re crazy about coffee,” the musicians stated. “We love it. We have been sourcing our own beans and making our own blends for more than ten years. A few years ago, we thought it was ready to share with the community. However, we didn’t want to add to the sea of trash. We looked around for 100 percent compostable packaging and we found that it didn’t exist . . . yet. That led us on the road to where we are now. In this quest we have met a lot of really cool, like-minded people who have helped us along the way. It’s been a great journey!”
Coffee it was, and had to be, but coffee done with global responsibility in mind. “Every day, millions of people drink (at least!) a cup of coffee. It’s one of the largest traded commodities in the world,” said the rockers. “We chose to follow our passion for coffee through by showing that you don’t have to compromise great taste and affordability for sustainability. This is organic coffee that is easy to drink, at an affordable price, and down-right delicious. All the while, it is supporting farmers through fair wages, investment in community infrastructure, and reduction of harmful chemicals in the environment. Throw compostable packaging into the mix and you have a product that is unapologetically sustainable. How could we not get into the coffee game when we knew we could accomplish that?”
And in some small way being in the music business prepared them for the coffee business. Said Dirnt: “I have served many cups of coffee as a teen working in restaurants. I consider myself a barista of sorts backstage at every show on tour. I’ve also enjoyed the pleasure of visiting some of the very best, artisanal coffee houses in the world.”
Armstrong and Dirnt partnered with Rogers Family because, as they said, “Until now, no one had found a way to make coffee packaging completely compostable. Everyone told us it couldn’t be done, but we wouldn’t take ‘no’ for an answer. On our journey to compostable solutions, we met ingenious engineers and forward-thinkers, including the like-minded revolutionaries over at SF Bay Coffee, who were seeking to make their OneCup pods fully compostable. We decided to work together to pool resources and maximize the opportunity for success in finding a viable compostable option. It hasn’t been an easy journey, but it’s been worth it.”
Finding the right coffee was done very carefully. They all sat around the cupping tables, to taste and test, and just cupped, and cupped, and cupped, and created some special blends from some smaller estates that Rogers buys coffee from. Rogers has a great many farms around the world where they buy the entire crop. “We created some custom blends for them, and then went out with all the environmentally friendly packaging, and we’re trying to sell it to the stores of America,” JR of Rogers Family said.
It wasn’t easy getting everything just right. According to the folks of Oakland Coffee Works: “You can’t let perfection get in the way of progress. We believe that you always need to be striving to produce the most sustainable, well-made products. That means putting our best products out there and continually working to perfect them. Any step in the right direction gets the ball rolling on combatting plastic waste. Our current packaging is just the first step in this revolution.”
Rogers Family and Oakland Coffee Works are a good fit. “We do a whole lot of things other than just this [coffee],” JR said. “They [Oakland Coffee] were thinking along the lines of doing the same sort of stuff, making a difference, and that sort of thing, so we just started talking . . .” At first, JR said Rogers Family wasn’t so interested. They tended to do their own thing and weren’t sure about having partners. Over the years they have been approached by chefs and the like to get involved with co-branding, but they always said, “no thanks.” But, the guys at Oakland Coffee Works were very convincing. As JR put it, it was, “‘Just come and sit down, and let’s talk.’ They were very passionate. They’re very smart. It was clear that they wanted to do the same sort of things that we were doing, and they [could] reach a group of people that we really [couldn’t] reach, like who they are. We knew that we could all do some really great things together, and that’s what we’ve started doing.”
And the thirst for the single cup will just keep growing. “It’s a fraction of what’s out there.” Still, there is a lot of competition around these days and it is not easy to compete in the marketplace with, as JR put it, “the eight-hundred-pound gorilla sitting on everybody’s chest.” The different types of brewers in the mix add to the confusion. “The Keurig machine is the one that’s used in America,” Rogers observed, “and I think the latest numbers are somewhere between about 25 percent to 30 percent of the households, but it’s over 50 percent of the coffee market dollars right now. We’re seeing from the numbers there’s a lot more competition out there.” There are also a lot more special deals and promotions at the retail level.
Added JR, “The consumer is winning because of the competition. The price has gone down. I believe so. We’re jus
t thinking that the next phase to keep it, if the category wants to grow, it is going to have to be through an environmentally friendly one.”
No doubt that even with sales and promotion, the cost of a cup of coffee made with the single-serve brewer is a lot higher that a cup of coffee using a coffee pot. “When you get right down to it,” JR said, “it’s cheaper for you to make a pot of coffee, pour one cup, and pour the rest down the drain. Our whole goal with the thing is to just make this so that it’ll go in your green bin with your leaves, and your lawn clippings, and all that sort of stuff . . .” After a period of time “. . . it turns into dirt, so it will actually help the planet.”
Other companies are following the path to more environmentally friendly single-serve coffee options. Hills Bros. Coffee launched the Massimo Zanetti Beverage brand that uses BPI certified 100 percent compostable coffee pods—the PURPOD100™—in 2016. Massimo is one of the largest coffee roasters with nationally known retail brands such as Chock full o’Nuts, Chase & Sanborn, and others, in addition to Hills Bros.
K-Cup and Recycling
Single-serve coffee and other portion-pack beverages save time, to be sure. But, depending upon several factors, the real cost of single serve may not translate into just time versus money. The pileup of plastic has been getting the attention it deserves. Can convenience exist in good conscience? How much plastic is too much? More than nine billion K-Cups were sold in 2015. Is recycling a viable option?
