Keurig Green Mountain earned $4.7 billion in FY 2014, selling 9.8 billion portion packs and 10.9 million brewers. Sales of portion packs grew 13% to $3.6 billion.
Keurig and its licensed partners currently sell about 9 of every 10 single-serve capsules in the U.S. where household penetration of single cup brewers is above 15% and almost 40% in Canada. Keurig brewers are in 20 million households.
Americans consume about five times more cold beverages than hot. Keurig expected to introduce a cold brewing system with Coca-Cola products next year.
But market dominance has a price. Competitors in the past year have filed several lawsuits in both the U.S. and Canada and are now going public alleging KGM is unfairly muscling retailers that promote non-licensed brands.
Coffee Club LLp c.e.o. John Pigott has voiced his concerns in speeches and the televised Business News Network. Coffee Club is one of the largest roasters of grocery store coffee in North America. The company, which is owned by food conglomerate Morrison Lamothe Inc., makes millions of non-licensed single-serve capsules that fit and operate in even the newest of Keurig’s “lock-out” brewers.
In September the company filed a lawsuit in Ontario claiming $600 million in damages. In November it filed a formal complaint with the Competition Bureau.
The complaint was signed by five rival roasters. Under Canadian law the bureau must now conduct an investigation.
The lawsuit claims Keurig is engaging in anti-competitive practices, language that mirrors lawsuits filed in U.S. courts by TreeHouse Foods and Rogers Family Coffee. Keurig maintains its business practices comply with regulations in both countries. A spokesman said the complaints “are without merit.”
In November a U.S. court refused a Rogers Family legal maneuver to halt sales of Keurig 2.0 brewers.