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Single-cup coffee: less pressure, more profits

By | March 21, 2012, 9:22 AM PDT

Those new single-serve coffee machines aren’t just convenient, they’re wildly profitable.

Following a New York Times report in February that demonstrated just how much those one-cup coffee machines cost you each day (anywhere from two to five times as much), a new Bloomberg interview with Illycaffe CEO Andrea Illy notes that consumption may actually drop as a result of their more precise brew method, too.

“Depending on how fast portion systems penetrate households, we could see a drop in per-capita consumption of about 5 percent,” Illy told reporter Marvin G. Perez. “Overall, demand may only drop 1 percent because coffee drinkers who used to take two or three cups a day will drink more.”

More profits, less coffee, same cup of morning joe. (That’s a smart business model if I’ve ever seen one.)

Unsurprisingly, Illy is working to angle for a piece of the market long-occupied by Keurig and Nespresso. We’ll see how that affects market share, but in the meantime, it seems that the forces pushing consumer convenience are also indirectly helping coffee purveyors alleviate pressure in their supply chain over what is, at the end of the day, a commodity.

Not just saving money, but helping them make more of it, too.

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Andrew Nusca

About Andrew Nusca

Andrew Nusca is the editor of SmartPlanet.

Andrew Nusca

Andrew Nusca

Editor

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He based in New York but resides in Philadelphia.

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Andrew Nusca

Andrew Nusca
Andrew Nusca does not hold any investments in the companies he covers.
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I can't stand the single serve stuff
And I'm retired military, used to drinking coffee that's as bad as bunker fuel, or usable for stripping paint off cars.

Give me real beans, ground 5 minutes before being used for brewing.
Posted by Dr_Zinj
22nd Mar 2012
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Article omits eco. costs
Thew few times that I've had such coffee at friends, the single packets weren't recyclable. Plus it takes much more space per lb of coffee and thus larger shipping eco. costs. Finally, while I haven't seen Fair Trade packets, I think I at least saw an organic one.

Anyway a "Smart Planet" article should deal with the broader picture.
Posted by RodD94
22nd Mar 2012
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Single-cup coffee: less pressure, more profits
More waste.

Keurig fills up a whole trash can every day with discarded K-cups.
Posted by bb_apptix
22nd Mar 2012
0 Votes
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coffee
boy these business people are bright. I have read this piece a few times and can't seem to make any sense out of it. Besides what's it doing in this IBM dominated web site?
Posted by affordablecomputerguy@...
22nd Mar 2012
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IBM
...is all about increased profits.
Posted by wizoddg
23rd Mar 2012
0 Votes
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of course the profits will be shared
with the pickers....
Posted by wizoddg
23rd Mar 2012
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