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Issue Date: Vol. 53, No. 12, December 2013, Posted On: 11/26/2013

Keurig 2.0 Will Shut Out K-Cup Copycats

Emily Jed
TAGS: single-cup brewer, Keurig, K-Cup, Green Mountain Coffee Roasters, Keurig 2.0, copycat pods, Brian Kelley, licensed K-Cups, K-Cup copies, office coffee service

WATERBURY, VT -- Green Mountain Coffee Roasters is putting the final touches on Keurig 2.0, a next-generation single-cup brewer with "interactive readability" that won't work with copycat pods.

The move is in response to the slew of non-licensed K-Cups that have entered the market since Green Mountain’s patents for the portion pack technology expired in 2012. Some competitive products offer price points as much as 25% lower than official K-Cups.

During a conference call with financial analysts on Nov. 20, Green Mountain chief Brian Kelley said Keurig 2.0 will be equipped to interact digitally with licensed K-Cups, making it incompatible with unlicensed products. He also said Green Mountain is "in discussions with a large number of unlicensed players to welcome them into the system."

Kelley reported that the new brewers and cups would "fundamentally improve and transform the Keurig brewing system," giving the 16 million consumers who have bought the Keurig 1.0 system during the past two years reason to switch over.

Unlicensed Keurig-compatible packs had already grabbed 8% of the Keurig platform, Kelley told financial analysts, and he anticipated that number to hit 12% by the end of Green Mountain's just-completed fiscal fourth quarter.

“We expect unlicensed share of the system to continue to grow through the first half of fiscal year 2014, and then begin to decline in the second half and thereafter,” Kelley projected.

The Green Mountain chief said that Keurig 2.0 will replace the company’s current lineup of both K-Cup and Vue brewers within about a year of its 2014 launch.

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