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Single-cup coffee: less pressure, more profits

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The single-serve coffee machine is helping specialty purveyors boost profits and alleviate supply-chain pressure by reducing per-capita consumption.

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

Editor Emeritus

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 is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure